The U.S. Supreme Court ruling on same-sex marriage not only marks an important milestone in history, but also represents a major shift in today’s human resources departments. According to HR experts, this decision will remove a substantial administrative burden from HR departments whose companies operate in states that did not recognize such same-sex unions, leading to substantial savings for many businesses and more consistent employee benefit policies.
“The impact is significant because there were a patchwork of laws throughout the states,” said William C. Martucci, a partner with the law firm of Shook, Hardy & Bacon and an instructor for the Human Resources Management (HRM) program at Georgetown University’s School of Continuing Studies.
Big Savings for Businesses
In purely financial terms, the 5–4 decision in the marriage case, Obergefell v. Hodges, is a huge benefit for businesses. By essentially lifting marriage restrictions in the 12 states that did not recognized same-sex unions, the June 26 ruling eliminated the administrative costs companies faced in having to classify non-recognition state employees as married for some purposes and single for others.
“Companies operating nationwide, many of whom have centralized HR functions, find themselves in a complicated labyrinth of differing rules, regulations, and internal policies,” said an amicus brief filed in March by 379 companies, including such prominent firms as Amazon, Marriott International, and Northrup Grumman. “These variations must often be incorporated manually into otherwise automated processes, a requirement that is both burdensome and prone to human error.”
Companies operating in non-recognition states also incurred considerable expense when—in an effort to treat all employees equally—they decided to compensate same-sex couples for the cost of healthcare benefits normally available to spouses. According to the amicus brief, the extra hours and paperwork associated with those efforts, as well as simply meeting the demands of inconsistent state laws, cost businesses more than $1 billion a year.
As important as the financial benefits are for business, the societal ones might be even greater. By characterizing the right to marriage as a fundamental liberty guaranteed by the 14th Amendment, Justice Anthony Kennedy’s majority opinion clears a path for more legal protections for LGBT people in areas such as employment and housing, Martucci said.
The Obergefell decision will have a beneficial impact for same-sex couples regarding taxation, employee benefits, the Family Medical Leave Act (FMLA), and COBRA benefits, said Savaria Harris, a partner with the global law firm of DLA Piper and an instructor in Georgetown’s HRM program. Some companies that provide domestic partner benefits to non-married spouses may rethink those offerings now that same-sex couples can marry anywhere in the United States, though Harris said a recent poll shows about three-quarters of companies plan to keep those benefits
A New Role for HR, Communications Departments
While support for same-sex marriage has increased in the United States over the past decade, nearly 40 percent of Americans still oppose the practice. Given these numbers, human resources departments may need to work with their company’s communications department to explain the advantages of offering expanded benefits to LGBT employees, said Keith Earley, an instructor in Georgetown’s HRM program and an organization development consultant with an extensive background in corporate law, change management, and diversity and inclusion strategies.
“I sometimes think that companies, and especially, human resources departments, are more leading-edge on these issues than the legal system is,” Earley said. “The legal system is a kind of blunt instrument affecting social change, whereas a human resources department can be more nuanced on these issues and more forward-thinking.”