Federal Regulatory Agencies Issue Post-DOMA Guidance on Employers' Treatment of Same-Sex Spouses
When the Supreme Court struck down the federal definition of marriage as a legal union between one man and one woman earlier this year, there was substantial confusion over how federal employment laws would be enforced in states that did not recognize same-sex marriages. The Employee Benefits Security Administration (EBSA) of the Department of Labor (DOL) and the Internal Revenue Service (IRS) have issued guidance on how the Supreme Court's decision will impact the administration and taxability of pension/retirement and group health benefits, while a revision last month to a Fact Sheet by the Wage and Hour Division (WHD) of the DOL, which enforces the Family and Medical Leave Act (“FMLA”), indicates how the WHD will enforce the FMLA at least in the near term.
In Revenue Ruling 2013-17, the IRS clarified that same-sex marriages will be recognized for federal tax purposes if they were entered into in any jurisdiction that recognizes same-sex marriages as legal (the so-called “state of celebration” rule). This means that even if a couple lives in a state that does not recognize their same-sex marriage, they will be viewed as married for federal tax purposes. Following the IRS ruling, the EBSA issued Technical Release 2013-04, in which it takes the position that – at least with respect to employee benefit plans – the terms “spouse” and “marriage” “should be read to include same-sex couples legally married in any state or foreign jurisdiction that recognizes such marriage, regardless of where they currently live.”
Interestingly, these pronouncements contrast with a recently-updated DOL “Fact Sheet,” in which the DOL indicated that for the purposes of the FMLA, an individual will only qualify as a same-sex spouse of an employee if the employee actually resides in a state that recognizes his or her marriage. Importantly, because the WHD Fact Sheets are not considered authoritative pronouncements of the law and because a prior Non-Administrator Opinion Letter defining spouse as a member of the opposite sex, which Letter is considered more authoritative, has not yet been withdrawn, it is unclear whether the WHD will continue to apply the “state of residence” rule or follow the EBSA and the IRS and apply the “state of celebration” rule under the FMLA.
In light of the new guidelines, employers providing group medical plan coverage and retirement plans should review their plans and make adjustments so that they properly account for employees with same-sex spouses that are legally married in a state that recognizes same-sex marriages. In addition, employers subject to the FMLA should review and, if necessary, revise their FMLA policies and procedures to ensure compliance with the DOL's revised Fact Sheet. However, many post-DOMA issues remain unresolved or unclear in light of the changing and conflicting guidelines. Therefore, please contact your Elarbee Thompson attorney in order to ensure your company's compliance in light of the new regulatory guidelines.