*Special HR Alert* - Governor Withdraws Appeal on Same-Sex Marriage: FMLA, COBRA, Payroll taxes, other rules change

Governor Christie announced today that he was dropping the litigation over same-sex marriage in New Jersey by withdrawing an appeal pending before the N.J. Supreme Court.  In United States v. Windsor, the U.S. Supreme Court invalidated the federal defense of Marriage Act (DOMA) and essentially left to the states to determine whether same-sex couples would receive the same benefits as opposite-sex couples under federal employment laws, including the federal Family Medical Leave Act (FMLA), the Employee Retirement Income Security Act (ERISA) and the Consolidated Omnibus Budget Reconciliation Act (COBRA).

Under the N.J. Civil Union Act, which did not legally recognize same-sex “marriage,” New Jersey employers were left to apply two sets of benefits’ rules that depended on the marital status of employees. This dual set of rules uniquely burdened employers in state (and other states that that do not recognize same-sex marriage).  Now that a lower court ruling is left to take effect, as a practical matter, same-sex marriage will be legal in New Jersey as of today – October 21, 2013. (Earlier the N.J. Supreme Court refused to delay the effect of the lower court ruling).

Under IRS guidance same-sex marriages will be recognized for federal tax purposes in any jurisdiction that recognizes same-sex marriages as legal, which now includes New Jersey.

Guidance issued by the USDOL Employee Benefits Security Administration states partners are recognized as married under ERISA if they are lawfully married in that state, which now includes New Jersey.

Similarly, under COBRA, most employers must continue to offer existing group healthcare coverage to employees, their spouses, and their dependent children upon certain qualifying events, such as death, job termination, and divorce.  Same-sex partners can now receive COBRA coverage.

Further, the USDOL has updated its guidance regarding compliance with the FMLA, which indicates that the FMLA now applies when an employee seeks leave to care for a qualifying same-sex spouse.  But, in contrast to the IRS, the USDOL guidance indicates that for the purposes of the FMLA, an individual will only qualify as a “spouse” of an employee unless the employee resides in a state that recognizes his or her marriage.   The new guidance clarifies that  employers must now provide FMLA leave for their employees to care for a same-sex spouse if the employee resides in a state where his or her same-sex marriage is recognized, even if the employer is located in a state that does not recognize the marriage.