Google Adds Pay to Cover Tax for Same-Sex Benefits
The New York Times reported that on Thursday, Google is going to begin covering a cost that gay and lesbian employees must pay when their partners receive domestic partner health benefits, largely to compensate them for an extra tax that heterosexual married couples do not pay. The increase will be retroactive to the beginning of the year. “It’s a fairly cutting edge thing to do,” said Todd A. Solomon, a partner in the employee benefits department of McDermott Will & Emery, a law firm in Chicago, and author of “Domestic Partner Benefits: An Employer’s Guide.”
Google is not the first company to offer this, many others have according to the Human Rights Campaign, a handful of other organizations including Cisco, Kimpton Hotels and the Gates Foundation, do so as well. Experts said a few other companies provided the extra compensation, though it still amounted to a relatively small number.
Although with a company as largely successfully and as well-know as Google, it may inspire other companies to follow suit.
Under federal law, 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.
On average, employees with domestic partners will pay about $1,069 more a year in taxes than a married employee with the same coverage, according to a 2007 report by M. V. Lee Badgett, director of the Williams Institute, a research group that studies sexual orientation policy issues.
So Google is essentially going to cover those costs, putting same-sex couples on an even footing with heterosexual employees whose spouses and families receive health benefits.
The company began to look at the disparity after a gay employee pointed it out, said Laszlo Bock, Google’s vice president for people operations (also known as human resources). Google, by the way, says its benefits team seriously considers any suggestions on how to expand its coverage.
“We said, ‘You’re right, that doesn’t seem fair,’ so we looked into it,” Mr. Bock said. “From that initial suggestion, we said, let’s take a look at all the benefits we offer and see if we are being truly fair across the board.” As a result, the company also decided to make a few other changes that would help gay employees, including eliminating a one-year waiting period before qualifying for infertility benefits and including domestic partners in its family leave policy — going beyond the federal Family and Medical Leave Act, which requires employers to provide up to 12 weeks’ leave in a one-year period to recover from a medical condition or to care for a relative.
The additional pay will also cover the dependents of the employee’s domestic partner. The changes will be retroactive to Jan. 1, and will apply only to workers in the United States.
It is hard to say how many of Google’s 20,600 employees will be affected by the changes, but the company’s internal gay and lesbian group — they call themselves Gayglers — has about 700 members (though some members may simply support their gay and lesbian co-workers).
So what’s the cost of Google’s largess? Mr. Bock declined to provide details but said the decision was less about money and more about equalizing benefits. “If you were to add it all up, it’s not like we are talking hundreds of thousands per employee,” he said. “It will cost some money, but it was more about doing the right thing.”
In California, even more companies may provide coverage because the state requires insurance products issued there to be extended to registered domestic partners.
The company’s announcement came on the heels of a decision by the Labor Department to permit employees who are acting as parents to take leave under the Family and Medical Leave Act to care for a child, even if there are no legal or biological ties. But Google’s move would allow employees to care for a partner, too.
Congress has tried to address the fact that same-sex couples pay more for domestic partner health coverage. The health care overhaul legislation passed by the House last November included language that would have eliminated the tax on employer-provided coverage. But the provision did not make it into the final legislation signed by President Obama in March.
Google “has decided it’s in their best interest to treat employees with same-sex partners fairly,” said Daryl Herrschaft, who oversees the Workplace Project of the Human Rights Campaign Foundation, “and that includes picking up the slack when federal law doesn’t recognize the diversity of today’s work force.”
