According to The New York Times, Google is going to begin covering a cost that gay and lesbian employees must pay when their partners receive domestic partner health benefits. This is intended to compensate these employees for an extra tax that heterosexual married couples do not pay. Employer-provided health benefits for domestic partners are counted as taxable income if the partner is not considered a dependent. The tax owed is based on the value of the partner’s coverage paid by the employer. The Tax Prof Blog explains the tax aspects here, and notes that other companies such as Cisco, Kimpton Hotels, and the Gates Foundation provide similar benefits.
While it is easy to understand why a company might adopt such a policy, is it legal? I am not aware of any cases testing the issue, but it is not too hard to mount an argument that this benefit violates the law.
Twenty-one (21) states and the District of Columbia prohibit discrimination based on sexual orientation. By way of example, California’s law prohibits discrimination “on account of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation.” The “gross up” benefit is extra compensation and is provided based exclusively on sexual orientation. Conversely, it is denied to heterosexual employees on the same basis, their sexual orientation. This appears to be a direct violation of several states’ anti-discrimination laws.
In the Times article, Google’s vice president for “people operations” also justifies the benefit by noting that ”heterosexual couples can avoid the added tax by marrying.” The implication is that the employees who are heterosexual and single have no one but themselves to blame for any income disparity they suffer. However, this is also problematic in that California and several other states prohibit discrimination based on marital status. Moreover, the denial of extra compensation to married employees could run afoul of these provisions as well.
The “gross up” benefit provides homosexual employees a benefit in the form of extra compensation that is not provided to similarly situated heterosexual employees based on their orientation and/or marital status. I’m no plaintiff’s attorney but it seems to me that Google and other companies offering these benefits would be wise to remember my first rule of employment law — no good deed goes unpunished.
- Partner
Mark Chumley has experience representing clients in all aspects of labor and employment law. He has handled numerous cases before state and federal courts and state and federal civil rights agencies, including claims involving ...
Topics/Tags
Select- Labor & Employment Law
- Labor Law
- Coronavirus
- Employment Law
- Wage & Hour
- Privacy
- National Labor Relations Board
- Department of Labor
- Reasonable Accommodation
- Workplace Accommodations
- NLRB
- FMLA
- Medical Marijuana
- Employment Litigation
- Employee Benefits and Executive Compensation
- Religion Discrimination
- Arbitration
- Workplace Violence
- Discrimination
- Pregnancy Discrimination
- Medical Cannabis Dispensaries
- IRS
- Whistleblower
- Litigation
- Disability Discrimination
- Employer Policies
- Social Media
- Americans with Disabilities Act
- United States Supreme Court
- Federal Trade Commission
- Retirement
- Race Discrimination
- OSHA
- Sexual Orientation Discrimination
- National Labor Relations Act
- Accommodation
- ERISA
- Employer Handbook
- EEOC
- ADAAA
- ACA
- Affordable Car Act
- Unions
- Title VII
- Employer Rules
- Sexual Harassment
- Technology
- Federal Arbitration Act
- NLRA
- Transgender Issues
- 401(k)
- Disability
- Employment Settlement Agreements
- Sixth Circuit
- Equal Employment Opportunity Commission
- Fair Labor Standards Act
- Paycheck Protection Program
- Securities Law
- Benefits
- Gender Identity Discrimination
- Posting Requirements
- Class Action Litigation
- Disability Law
- Preventive Care Benefits
- Health Savings Account
- E-Discovery
- Evidence
- SECURE Act
- US Department of Labor Employee Benefits Security Administration
- Environmental Law
- Family and Medical Leave Act
- Privacy Laws
- Overtime Pay
- Representative Election Regulations
- Department of Justice
- Healthcare Reform
- Older Workers' Benefit Protection Act (OWBPA)
- Telecommuting
- Affirmative Action
- Electronically Stored Information
- Equal Opportunity Clause
- Compensable Time
- Occupational Safety and Health Administration
- Security Screening
- Supreme Court
- E-Discovery Case Law
- Electronic Data Discovery
- ESI
- Attendance Policy
- Return to Work
- Seniority Rights
- Unemployment Insurance Integrity Act
- American Medical Association
- Classification
- Confidentiality
- Disability Leave
- Equal Pay
- Fair Minimum Wage
- Federal Minimum Wage
- Genetic Information Discrimination
- Media Policy
- Misclassification
- National Origin Discrimination
- Retaliation
- Social Media Content
- State Minimum Wage
- Wage Increase
- Employment Incentives
- HIRE Act
- Social Security Tax
- Taxation
- Antitrust
Recent Posts
- The Practical Employment Law Podcast: Immediate Termination
- The Practical Employment Law Podcast: Labor & Employment Law Update February 2024
- The Practical Employment Law Podcast: Telephone Game
- The Practical Employment Law Podcast: Labor & Employment Law Update January 2024
- The Practical Employment Law Podcast: Employment Law Issues to Watch in 2024
- Department of Labor Announces New Independent Contractor Rule to Go into Effect March 11, 2024
- The Practical Employment Law Podcast: The Employment Law Naughty & Nice List
- The Practical Employment Law Podcast: Reefer Madness
- The Practical Employment Law Podcast: The Office Romance Episode
- The Practical Employment Law Podcast: New Laws Protecting Pregnant and Nursing Workers