By RORY BARBAROSSA
NEW YORK, NY – The growing support for LGBT rights among American corporate leaders is turning into tangible results for the nation’s LGBT workers, with a growing number of blue chips and other companies offering non-fiduciary benefits and other forms of compensation to their LGBT workforces, and their partners: married, domestic, or what have you.
For example, Ernst & Young, one of the nation’s largest accounting firms, is one of about three-dozen companies that now compensate their LGBT employees because of a provision in the tax code that requires them to pay income taxes on their partners’ health benefits—an amount that straight married couples are not required to pay. Approximately three-dozen companies now offer the so-called “gross-up benefit,” which, the Human Rights Campaign (HRC) reports, is close to three times as many that offered the benefit just twelve months ago.
HRC reports that other companies that began offering the benefit as of Jan. 1 include American Express, Bank of America, Microsoft, and Yahoo. Both HRC and legal experts say that the tax requirement is a federal issue, and therefore trumps even laws in states that recognize gay marriage. “Four letters,” says Chris J. Mancini, a Broward County attorney who has represented many LGBT clients on domestic partnership issues. “D-OM- A.” Mancini, a former federal prosecutor, notes that the federal Defense of Marriage Act does not recognize same-sex couples as being married, even in the eight states that have legalized marriage equality.
“Under DOMA and its federal spousal definitions, a man on his wife’s health plan doesn’t pay federal taxes on his share of benefits, but a man on his husband’s plan does,” Mancini explains.
“Big Five” accounting firm Ernst & Young has offered benefits to same-sex domestic partners since 2002. The matter of the tax inequity came up during a town hall meeting held in November by the company’s diversity department. According to HRC estimates, the gross-up benefit provides an extra $1,200 on average to an employee’s family. Competitors KPMG and Pricewaterhouse Coopers have likewise added the gross-up benefit gay employees and their partners.
Bank of America offered domestic partner health benefits beginning in 1998: the company added the tax benefit this year for both domestic partners of employees and eligible children.