Oregon Marriage Decision Has Impact on Employers

On April 14, 2005, the Oregon Supreme Court held in Li and Kennedy v. Oregon that the roughly 3000 marriage licenses issued to same-sex couples by Multnomah County are not valid. The Supreme Court's decision may change the obligations and opportunities for employers, de-pending on the nature of the employer and the decisions the employer has previously made regarding whether or not to treat certain partners of employees as if they were spouses.

Oregon Public-Sector Employers

In December 1998, the Oregon Court of Appeals decided Tanner v. Oregon Health Sciences University, holding that Oregon public employers must treat certain same-sex domestic partners like spouses for many employment purposes. In accordance with that decision, which is not affected by the Li and Kennedy decision, Oregon public employers have permitted their eligible employees to enroll qualifying same-sex domestic partners in employee benefit plans as if they were spouses. Some such employers have even extended benefits to opposite-sex domestic partners, though that probably is not required by law.

In our experience, most Oregon public-sector employers require same-sex domestic partners to satisfy certain criteria to be treated like spouses, such as the following:

• The partners are not related by blood closer than would bar marriage in Oregon;
• Neither of the partners is legally married;
• The partners have continuously lived together for an extended time, share a close, exclusive personal relationship, and intend to maintain that relationship indefinitely;
• The partners have joint financial accounts and have agreed to be jointly responsible for each other's common welfare, including basic living expenses; and
• The partners are of legal age and would be married to each other if Oregon law so permitted.

Many Oregon public employers probably have not needed to decide how to treat an employee's same-sex “spouse,” because the situation has not arisen. Even for such employers who have employees with same-sex spouses, the issue might have been moot, if the same-sex spouse could qualify as a same-sex domestic partner pursuant to the employer's criteria for eligible domestic partners. In some cases, the relationship might have been too short-lived, for example, for the same-sex spouse to qualify as an eligible same-sex domestic partner. In such cases, employers have had to decide, at least provisionally, whether to treat same-sex spouses like opposite-sex spouses.

Now, for some of those employers, Li and Kennedy might change the equation. Employers that have treated same-sex spouses like opposite-sex spouses may no longer quite do that, because the same-sex partners are no longer spouses, in light of Li and Kennedy. So such employers will need to determine, in consultation with their insurers, whether partners previously accepted as same-sex spouses qualify as eligible same-sex domestic partners.

Employers that have declined to treat same-sex spouses the same as opposite-sex spouses for employment and benefits purposes need not change their practices. Of course, such employers still must treat eligible same-sex domestic partners like spouses for employment and benefits purposes.

Human resource professionals for Oregon public employers may want to take this opportunity to confirm their ability to comply with Tanner, which might include taking the following steps:

• Check employment policies and dis-closures, such as those relating to Oregon and federal family leave, and benefit plan documents and summaries to make sure they properly state employees' rights and obligations with respect to their eligible domestic partners;
• Check with payroll departments and vendors to ensure any employer subsidy for benefit coverage for domestic partners who don't qualify as dependents pursuant to the new definition in the Working Families Tax Relief Act of 2004 (WFTRA) will be reported as taxable wages to the affected employee;
• Check with insurers to confirm their willingness and ability to provide coverage to eligible domestic partners as if they were spouses; and
• Consider whether or not to treat op-posite-sex domestic partners like spouses, given the probable absence of a legal obligation (other than any contractual obligation assumed by the employer) to do so.

Private-Sector and Public-Sector Employers Outside Oregon

As noted above, private-sector and public-sector employers outside Oregon have not been required by law to treat domestic partners like spouses for benefits purposes. (Private-sector employers in Oregon are required to treat same-sex domestic partners like spouses for certain employment purposes, such as the Oregon Family Leave Act, or “OFLA.”) The impact, if any, of the Li and Kennedy decision on such employers may depend on whether they choose to treat same-sex domestic partners like spouses for benefits purposes in the future:

• Such employers that have declined to treat same-sex spouses the same as opposite-sex spouses for employment and benefits purposes need not change their practices. Of course, such employers still need to decide whether to treat same-sex domestic partners like spouses for employment and benefits purposes.
• Such employers that have treated same-sex spouses like opposite-sex spouses may no longer quite do that, because the same-sex partners are no longer spouses, in light of Li and Kennedy.

If such employers do not treat same-sex domestic partners like spouses, except as required by laws such as OFLA, the employer would, in effect, be changing its records to characterize the employee as single rather than married. Thus, if an employee had enrolled a same-sex “spouse” for coverage under the employer's health plan, presumably the “spouse's” enrollment would end, subject to any continuation coverage, now that the person is no longer a legal spouse.

If such employers do treat same-sex domestic partners like spouses, they will need to determine, in consultation with their insurers, whether partners previously accepted as same-sex spouses qualify as eligible same-sex domestic partners. Of course, such employers have wide latitude to determine under what circumstances, if any, to treat same-sex domestic partners like spouses, and are not bound by criteria such as those listed above, except for certain legally required purposes such as OFLA.

Human resource professionals for private-sector employers and non-Oregon public employers may want to take this opportunity to review their policies and procedures regarding employees' domestic partners, which might include taking the following steps:

• Check employment policies and dis-closures, such as those relating to OFLA and FMLA, to make sure they properly state employees' rights and obligations with respect to their eligible domestic partners;
• Determine, in consultation with any insurers, to what extent, if any, to treat domestic partners like spouses for purposes of employment and benefits, and document any decision to treat domestic partners like spouses in the relevant plan documents and summaries; and
• To the extent the employer will tre-at domestic partners like spouses for benefit purposes, check with payroll departments and vendors to ensure any employer subsidy for benefit coverage for domestic partners that don't qualify as dependents pursuant to the new definition in WFTRA will be reported as taxable wages to the affected employee.

Conclusion

In short, the Li and Kennedy decision should not have major implications for employers, but it presents a useful opportunity to review policies and procedures relating to the employer's treatment of employees' partners who are not opposite-sex spouses.

On April 14, 2005, the Oregon Supreme Court held in Li and Kennedy v. Oregon that the roughly 3000 marriage licenses issued to same-sex couples by Multnomah County are not valid. The Supreme Court's decision may change the obligations and opportunities for employers, de-pending on the nature of the employer and the decisions the employer has previously made regarding whether or not to treat certain partners of employees as if they were spouses.

Oregon Public-Sector Employers

In December 1998, the Oregon Court of Appeals decided Tanner v. Oregon Health Sciences University, holding that Oregon public employers must treat certain same-sex domestic partners like spouses for many employment purposes. In accordance with that decision, which is not affected by the Li and Kennedy decision, Oregon public employers have permitted their eligible employees to enroll qualifying same-sex domestic partners in employee benefit plans as if they were spouses. Some such employers have even extended benefits to opposite-sex domestic partners, though that probably is not required by law.

In our experience, most Oregon public-sector employers require same-sex domestic partners to satisfy certain criteria to be treated like spouses, such as the following:

• The partners are not related by blood closer than would bar marriage in Oregon;
• Neither of the partners is legally married;
• The partners have continuously lived together for an extended time, share a close, exclusive personal relationship, and intend to maintain that relationship indefinitely;
• The partners have joint financial accounts and have agreed to be jointly responsible for each other's common welfare, including basic living expenses; and
• The partners are of legal age and would be married to each other if Oregon law so permitted.

Many Oregon public employers probably have not needed to decide how to treat an employee's same-sex “spouse,” because the situation has not arisen. Even for such employers who have employees with same-sex spouses, the issue might have been moot, if the same-sex spouse could qualify as a same-sex domestic partner pursuant to the employer's criteria for eligible domestic partners. In some cases, the relationship might have been too short-lived, for example, for the same-sex spouse to qualify as an eligible same-sex domestic partner. In such cases, employers have had to decide, at least provisionally, whether to treat same-sex spouses like opposite-sex spouses.

Now, for some of those employers, Li and Kennedy might change the equation. Employers that have treated same-sex spouses like opposite-sex spouses may no longer quite do that, because the same-sex partners are no longer spouses, in light of Li and Kennedy. So such employers will need to determine, in consultation with their insurers, whether partners previously accepted as same-sex spouses qualify as eligible same-sex domestic partners.

Employers that have declined to treat same-sex spouses the same as opposite-sex spouses for employment and benefits purposes need not change their practices. Of course, such employers still must treat eligible same-sex domestic partners like spouses for employment and benefits purposes.

Human resource professionals for Oregon public employers may want to take this opportunity to confirm their ability to comply with Tanner, which might include taking the following steps:

• Check employment policies and dis-closures, such as those relating to Oregon and federal family leave, and benefit plan documents and summaries to make sure they properly state employees' rights and obligations with respect to their eligible domestic partners;
• Check with payroll departments and vendors to ensure any employer subsidy for benefit coverage for domestic partners who don't qualify as dependents pursuant to the new definition in the Working Families Tax Relief Act of 2004 (WFTRA) will be reported as taxable wages to the affected employee;
• Check with insurers to confirm their willingness and ability to provide coverage to eligible domestic partners as if they were spouses; and
• Consider whether or not to treat op-posite-sex domestic partners like spouses, given the probable absence of a legal obligation (other than any contractual obligation assumed by the employer) to do so.

Private-Sector and Public-Sector Employers Outside Oregon

As noted above, private-sector and public-sector employers outside Oregon have not been required by law to treat domestic partners like spouses for benefits purposes. (Private-sector employers in Oregon are required to treat same-sex domestic partners like spouses for certain employment purposes, such as the Oregon Family Leave Act, or “OFLA.”) The impact, if any, of the Li and Kennedy decision on such employers may depend on whether they choose to treat same-sex domestic partners like spouses for benefits purposes in the future:

• Such employers that have declined to treat same-sex spouses the same as opposite-sex spouses for employment and benefits purposes need not change their practices. Of course, such employers still need to decide whether to treat same-sex domestic partners like spouses for employment and benefits purposes.
• Such employers that have treated same-sex spouses like opposite-sex spouses may no longer quite do that, because the same-sex partners are no longer spouses, in light of Li and Kennedy.

If such employers do not treat same-sex domestic partners like spouses, except as required by laws such as OFLA, the employer would, in effect, be changing its records to characterize the employee as single rather than married. Thus, if an employee had enrolled a same-sex “spouse” for coverage under the employer's health plan, presumably the “spouse's” enrollment would end, subject to any continuation coverage, now that the person is no longer a legal spouse.

If such employers do treat same-sex domestic partners like spouses, they will need to determine, in consultation with their insurers, whether partners previously accepted as same-sex spouses qualify as eligible same-sex domestic partners. Of course, such employers have wide latitude to determine under what circumstances, if any, to treat same-sex domestic partners like spouses, and are not bound by criteria such as those listed above, except for certain legally required purposes such as OFLA.

Human resource professionals for private-sector employers and non-Oregon public employers may want to take this opportunity to review their policies and procedures regarding employees' domestic partners, which might include taking the following steps:

• Check employment policies and dis-closures, such as those relating to OFLA and FMLA, to make sure they properly state employees' rights and obligations with respect to their eligible domestic partners;
• Determine, in consultation with any insurers, to what extent, if any, to treat domestic partners like spouses for purposes of employment and benefits, and document any decision to treat domestic partners like spouses in the relevant plan documents and summaries; and
• To the extent the employer will tre-at domestic partners like spouses for benefit purposes, check with payroll departments and vendors to ensure any employer subsidy for benefit coverage for domestic partners that don't qualify as dependents pursuant to the new definition in WFTRA will be reported as taxable wages to the affected employee.

Conclusion

In short, the Li and Kennedy decision should not have major implications for employers, but it presents a useful opportunity to review policies and procedures relating to the employer's treatment of employees' partners who are not opposite-sex spouses.