The patchwork of same-sex marriage laws across the country are making it expensive to do business. That’s why 379 companies have asked the Supreme Court to make it a constitutional right.
Same-sex marriage is legal in most places. But 13 states don’t allow LGBT couples to tie the knot and won’t recognize them as married even if they said “I do” in one of the 37 states where it’s legal. The Supreme Court could change that when it issues its ruling later this month.
For now, the different laws make it hard to do business, especially for companies with employees in different states. Some of the biggest American employers — including Target, Hewlett-Packard, General Electric, Pepsico, Goldman Sachs and Wells Fargo — signed a brief urging the court to decide in favor of same-sex marriage.
They argue that the inconsistent laws cost the private sector more than $1 billion last year. Here’s why:
1. Complex paperwork builds up.
In order to recruit the best employees, 66% of Fortune 500 companies offer health and retirement benefits to same-sex partners in states that don’t recognize their marriage.
That’s not a simple process for a company that does business in many states. It’s time consuming for human resources, as well as “burdensome and prone to human error,” according to the brief.
2. Same-sex partner benefits costs mount.
Besides the additional paperwork, providing spousal benefits for employees’ same-sex partners can be expensive. Same-sex employees will be taxed on the benefits provided to their partners, unlike heterosexual married couples. Often companies will offer same-sex emplyoees a bigger salary to cover the tax cost. That additional income bumps up the employer’s payroll taxes, too.
3. Recruiting top workers becomes difficult.
Workers with same-sex partners aren’t usually up for relocating to a state where their marriage isn’t recognized. It also makes it difficult for a company to hire new employees who may have to move to one of those 13 states.
This concern is even more significant when work includes travel and employees have to file taxes in several different states.
4. Can hurt morale and reduce productivity.
The varying laws force companies to treat those in same-sex marriages differently in some states. Either the employer doesn’t provide same-sex couples spousal benefits, or they create some kind of workaround in order to do so.
That can create a “rift” between the company and worker which “breeds unnecessary confusion, tension, and diminished employee morale,” according to the brief.
There are currently 13 states that do not recognize same-sex marriage: Arkansas, Kentucky, Georgia, Louisiana, Michigan, Mississippi, Missouri, North Dakota, South Dakota, Nebraska, Ohio, Texas and Tennessee. The Supreme Court heard arguments for the case in April and is expected to issues its ruling either Thursday or Monday.
Will you be impacted by the Supreme Court’s decision? Share your story by emailing Katie.Lobosco@turner.com.