Friday, December 10, 2010

Industry leaders take on “same-sex couples tax”

Posted by Bradford Menoche, Pride in My Workplace Coordinator

Many companies offer domestic partner benefits for their LGBT employees as a way to extend benefits more fairly to all their employees. However, the federal government imposes a tax on the value of the benefits the domestic partner receives, unlike married heterosexual couples, who receive an exemption from this tax. The tax is added to the employee’s paycheck by adding the cost of the benefits package to the employee’s paycheck as imputed income. Imputed tax is the amount that is due on the additional imputed income. The tax averages over $1000 a year, but can quickly rise depending on the cost of the benefits package. The cost is typically the combined amount that the employee contributes, plus what the employer contributes for the coverage.

This is an example of how the federal government’s rejection of same-sex marriage directly impacts our everyday lives. However, some companies have stepped forward to put an end this inequality for their gay and lesbian employees. Google made a big splash in June when they announced that they would start reimbursing their gay and lesbian employees for the so called “gay tax”. While they may not have been the first company to do this, their high profile definitely brought a lot of attention to the issue.

Now, just 6 months later, the list of companies offering the “true up” or “gross up” benefit is growing. Although the list is still relatively small, it contains several industry leaders and the list is growing each day. The Pride Agenda and HRC recently sent out a press release in support of Barclays, a major financial industry leader, who recently announced their policy change because when an industry leader makes a big change like this, there is often a domino effect. Barclays, like others, knows that being a leader on LGBT Workplace issues can create a competitive advantage for top talent, which is a goal for every company.

The current list of companies offering this benefit includes: Cisco, Kimpton Hotels, Morrison and Foerster, Bain and Co., Boston Consulting, Gates Foundation, Facebook, as well as Barclays.

Breaking News: McDermott, Will & Emery announced yesterday that they will also be reimbursing their Gay and Lesbian employees for imputed taxes. The Pride in My Workplace Program recently gave an Equality@Work award to Lisa Linsky, who is, among other things, the Partner-In-Charge of Firm-wide Diversity at McDermott.

We will be covering this topic at a Business Leaders Series event next year. This is the kind of “best practice” that the Pride in My Workplace Program promotes through its Best Practices Guide, Lunch and Learn events and educational panels. Please email me (bmenoche AT prideagenda DOT org) if you would like to get on the Pride in My Workplace distribution list or if there is a way that the Pride Agenda can partner with your organization to support you with the changes you want to make at your workplace.

Tara Siegel Bernard, who contributes to the New York Times Bucks blog also featured this exciting new trend. Check out her post: Facebook to Reimburse Gay Workers for Benefit Tax.


Anonymous said...

I am very fortunate to have a loving partner, and we are very fortunate to both have jobs in a tough economy. That his employer (Cisco) is providing both domestic partnership benefits and covering the tax burden they impose is incredible - especially in an economy where it would be very easy to forgo that. Every one of these companies you have listed deserves recognition and applause for their actions towards equality.

Wilmaryad said...

Congrats on being voted one of the best LGBT blogs by Guide to Online Schools! :-)

Here's the link: