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Court's DOMA Ruling May Affect Small Businesses

By Aditi Mukherji, JD on June 27, 2013 | Last updated on March 21, 2019

The Supreme Court has struck down the Defense of Marriage Act (DOMA). It's a major victory for the gay rights movement, as legally married same-sex couples are now entitled to certain federal benefits. But what does this mean for small business owners?

If your company hasn't done so already, your employee benefits package may need to be updated to include married gay or lesbian employees who are eligible for federal benefits.

In the wake of the DOMA ruling, gay couples stand to receive thousands of benefits, reports NBC News.

These federal benefits include:

  • FMLA leave. If your company is subject to the Family and Medical Leave Act, those guarantees will soon extend to your legally married gay and lesbian employees.
  • Tax-free employee health insurance. Health coverage will become more available to spouses of gay and lesbian employees without taxable strings attached.
  • Greed cards and visas. A legally married gay and lesbian American citizen may now lobby the federal government for a green card or visa for his or her non-American same-sex spouse.
  • Social Security survivors' benefits. Eligible same-sex spouses can now receive Social Security survivors' benefits upon the death of a spouse.
  • IRS perks. From tax exemptions to head-of-household deductions, legally married same-sex couples can now claim a host of tax benefits. Also, same-sex spouses can file tax returns jointly.

Despite the DOMA ruling, same-sex couples living in the 38 states that don't recognize same-sex marriage may only get a fraction of federal spousal benefits.

The IRS, for example, would award estate tax exemptions to gay spouses based solely on laws in the state where they live. So that leaves out gay couples living in states with bans on same-sex marriages.

"Different federal programs have different standards," a spokesman for the Human Rights Campaign, a gay rights advocacy group, told NBC News. "It's murky."

So if your employee got married in Massachusetts and lives in Alabama, he or she will receive some benefits, but not others. It's a bit up in the air.

One way to avoid the confusion is to move with the times and implement a progressive benefits policy. You may want to consider doing what the vast majority of Fortune 500 companies have done by introducing a benefits policy with greater workplace equality.

With the Defense of Marriage Act struck down, employers now have a decision to make. You can do the bare minimum to comply with the law, or you can go the extra mile to show your employees that they are valued and respected for who they are.

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