Last month when Netflix announced that it would begin offering paternity leave, many characterized the decision as “generous.” It should be more accurately described as fair. In our 2013 blog, “In Its Infancy: American Paternity Leave Has Some Growing Up To Do,” we noted that American workers believed parental leave for women and men was a vitally important issue. Following Obergefell v. Hodges, the June 2015 landmark Supreme Court decision holding that the fundamental right to marry is constitutionally guaranteed to same-sex couples, companies may soon be compelled to offer expanded parental leave policies. The same-sex marriage ruling will have a wide ranging effect on Human Resource policies and could affect parental leave benefits.
Congress first addressed gender identity in the Employment Non-Discrimination Act in 2007. This summer, the Act was replaced with the Equality Act, a more comprehensive measure that seeks to expand protections to include discrimination based on sexual orientation and gender identity. With certain religious exemptions, the Act ensures that persons of all sexual orientations are protected equally with other protected groups. In a New York Times op-ed piece, Chai Feldblum, the EEOC commissioner, draws parallels between racial discrimination and sex discrimination, suggesting that sexual orientation and identification, like race and ethnicity, are no longer a sufficient basis for differential legal treatment.
Similarly, in a reversal of policy, the Justice Department announced in December that Title VII now prohibits discrimination against transgender people. Perhaps the most famous transgender person in the world since she came out in 2015, Caitlyn Jenner has drawn attention to the social issues of the transgender community and has influenced the way Americans and American businesses see and understand transgender people. And years before Obergefell was decided, United States v. Windsor had extended end-of-life benefits to same-sex couples. In that ground-breaking case, the courts ruled it unconstitutional to treat relationships that had equal status under state law differently under federal law.
Under the new regulations, U.S. companies will now have to include not only cis men when offering parental leaves, but also transgender people. In addition, an employee seeking leave is not required to be a biological parent, although this differs by state. Many companies already offer primary caregivers parental leave, regardless of biological relation, and the trend of both federal policy and court rulings appears to decouple biology from benefits. Otherwise, adoptive and surrogate caregivers who are in same-sex relationships could be ineligible for leaves according to a company’s policy. Indeed, some states – Mississippi, for example – don’t (yet) permit same-sex couples to adopt children at all, much less encourage insuring them through company-subsidized health plans.
For HR departments, these changes in federal policy will lead to much-welcomed clarifications of messy, and sometimes litigious, benefits claims. Some seem more the result of tradition and stereotype than rational or prudent policy. For example, in a well-publicized 2013 case, a CNN reporter filed an EEOC charge when his employer, Time-Warner, refused his request for equitable paid paternity leave (maternity leave was available for both biological and surrogate caregivers). He won: the company now offers six weeks paid leave for any parent, male or female, adoptive or biological.
Although HR departments are currently staring at a mountain of paperwork, from policy rewrites to benefits administration and payroll deductions, in the end the patchwork of benefits will be resolved into more simple, streamlined policies. Now, among other things, tax reporting for benefits will change. Katrina Kibben, Director of Marketing for Recruiting Daily reports “previously, same sex couples were taxed on benefits for their partners, while heterosexual couples were able to pay for these benefits pre-tax.” According to Tracy Morley, an employment law expert, adding same-sex spouses to a health plan “could result in an increase in the number of participants on the plan and translate into increased health care costs.” However, “in practice, the opposite may be true, and introducing a new class of beneficiaries could instead drive costs down for other plan participants, according to….research on the intersection of gay marriage and employee benefits.”
Same-sex couples are also entitled to all benefits under the Family and Medical Leave Act, and paternity leave is just one example. Under FLMA employees are entitled to take up to 12 weeks of unpaid leave during a 12-month period for their own, or an immediate family member’s, serious health condition; for an extended parental leave for the birth or adoption of a child; and for bonding with a new foster child. According to the original law, “immediate family members” are parents, spouses and children. In February 2015, the Labor Department revised the definition of spouse under FMLA, enabling eligible employees in legal same-sex marriages to qualify. This will ensure that spouses in same-sex marriages have the same opportunities as all spouses to enjoy these benefits. "This is a huge deal,” Recruiting Daily’s Kibben notes, “and one that if you overlook, will put your company at serious risk of litigation and create the kind of significant compliance violation HR is pretty much paid to preempt.”
Fertility Treatment Benefits
The recognition of same-sex marriage is part of a broader shift in employee benefits and the role companies and insurers will play in subsidizing family planning healthcare. Although some companies – Deloitte, for example – contribute toward reproductive procedures, only 27% of businesses with more than 500 employees cover in vitro fertilization. This is expected to change only slowly. The Affordable Care Act leaves much of the regulation up to the states. Currently, only 15 states have laws requiring insurance coverage for infertility treatment, according to Resolve, a consumer advocacy group. Single women, unmarried partners, men with male fertility issues and married lesbians with fertility conditions are often excluded.
Because health insurance, for better or worse, is usually attached to employment, family planning has become an HR issue. As every recruiter knows, an attractive medical benefits package can cinch a candidate’s employment decision. Companies have been known to screen for employees with health issues that could raise their employer-paid premiums, just as a candidate might decline an offer from a great employer with a less competitive benefits package. An ostensibly minor difference between health plans or leave policies can have significant financial implications. However, some savvy employers recognize the role of competitive health benefits in attracting and retaining a driven workforce, and raise the bar by choosing to provide even more comprehensive benefits than those required by law.
According to the United Nation’s International Labor Organization, the United States is still one of only four nations that do not guarantee a right to paid maternity leave. Yet American companies are broadening their support for diverse family planning programs, from paternity leave to fertility treatments to transgender health to surrogacy. In the aftermath of the historic Supreme Court decision this summer, Human Resources departments and recruiters must endeavor to stay current on the big employee benefits policy changes under way. The landscape is changing and attitudes are changing with it. That’s good for employees and good for business.