Supreme Court ruling forces employers to reconsider benefits for same-sex couples

The federal government cannot limit the legal definition of marriage to one man and one woman. That was the conclusion the United States Supreme Court reached in June of this year when it decided United States vs. Windsor.

Although this decision sounds straightforward, it is likely to result in more confusion for employers in states which do not recognize same-sex marriages, and for employers with multi-state operations.

The decision invalidated Section 1 of the Defense of Marriage Act. Section 1 essentially stated that any time a federal law or regulation used the terms “marriage” or “spouse,” those terms referred to the marriage of one man to one woman. Consequently, legally married same-sex spouses could not file a joint federal tax return. They could not benefit from the federal marital estate tax exemption available to heterosexual spouses.

DOMA, however, did not prevent states from recognizing same-sex marriages or from providing other benefits to same-sex couples. Even before Windsor, a handful of states formally recognized same-sex marriages. In the wake of Windsor, same-sex spouses who reside in one of the 13 states in which same-sex marriage is legal will have all of the same spousal rights and benefits as opposite-sex spouses.

However, this will not be true in states like Wisconsin.

Wisconsin’s Constitution prohibits same-sex marriages. It also prohibits the recognition of legal same-sex marriages from other states. Section 2 of DOMA, which the Supreme Court did not address in Windsor, provides that a same-sex couple legally married in one state need not be treated as “married” in a state which does not recognize same-sex marriages. Consequently, under Section 2 of DOMA, a state like Wisconsin has no obligation to recognize a same-sex marriage from another state. Until the U.S. Supreme Court decides otherwise, Wisconsin’s refusal to recognize same-sex marriages from other states will remain valid.

By refusing to address Section 2 of DOMA, the Supreme Court has created a situation in which the laws of each individual state may affect the federal rights of legally married same-sex spouses. The availability of the federal Family Medical Leave Act illustrates the problem. The federal FMLA gives eligible employees the right to take up to 12 weeks of leave to care for a spouse who is suffering from a serious health condition. The FMLA defines a spouse as a husband or wife. However, the regulations implementing the FMLA define spouse “as defined or recognized in the state where the employee resides.” Since Windsor, the Department of Labor has clarified this regulation by reaffirming that a “spouse,” for FMLA purposes, will be defined by the law of the state in which the individual resides.

Based on this regulation, same-sex spouses who were legally married in Minnesota and live in Minnesota will now be eligible for federal FMLA leave to care for each other. If the same couple lived and worked in Wisconsin, they would not be eligible for this federal leave. A same-sex spouse who lives in Minnesota but works in Wisconsin may be entitled to federal FMLA leave.

For multi-state employers, the possible scenarios become exponentially more complicated. Multi-state employers have always developed policies which comply with all applicable laws without posing an undue administrative burden. Typically, the applicable laws have been federal law and the laws in those states in which they have a facility. Now, however, that list might include additional states where employees reside.

Many employers are beginning the process of making annual benefit decisions. Looming deadlines under the Affordable Care Act and the Supreme Court’s Windsor decision are likely to make these decisions more complicated than they have been for some time.

John E. Murray is a shareholder and Samantha J. Wood is an attorney at Lindner & Marsack S.C. in Milwaukee.

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