Business Impact of Marriage Equality
Marriage equality affects businesses in terms of recruitment and retention of talented employees, and also decreased taxation of health insurance and other benefits provided to same-sex partners of employees.
Recruitment and Retention
Available census and related data suggest that marriage equality has a positive impact on the number of LGBT couples who are attracted to a state, in particular among the creative class of young, highly educated and skilled individuals.
- Marriage Equality and the Creative Class (pdf) [law.ucla.edu]
Benefits Impact
Most leading U.S. businesses already provide domestic partner health benefits and without great expense. These employers will likely see the least impact from recognition of same-sex marriages, and will see a reduction in their payroll taxes related to domestic partner benefits.
If marriage becomes available to same-sex partners, making qualifying same-sex partners eligible for spousal benefits, the best data available indicates that most small businesses will not even confront this issue, and the average business will see no noticeable increase in employee benefit costs.
- Over 96 percent of firms will have no additional costs for health care benefits as a result of extending marriage to same-sex couples.
- The vast majority of small businesses with less than 20 employees will see no change in costs at all. Large businesses with more than 500 employees will see an average increase of just under $25,000 per year for providing additional health benefits.
- Employer costs for defined contribution plans, the most common kind of retirement plan, would not be affected since employer contributions are not based on family status. Employer costs for defined benefit plans will also not rise significantly.
In short, extending marriage to same-sex couples will have a negligible impact on the cost of providing employee benefits. In fact, because same-sex couples make up a small percentage of the U.S. population, the cost of allowing same-sex couples to marry will be no greater for employers than the costs caused by fluctuations in the U.S. heterosexual marriage rates.
- Business cost impact of marriage for same-sex couples
- Cost of domestic partner benefits
- Businesses support same-sex relationship recognition
- Williams Institute
Employers that already recognize same-sex relationships are better-equipped to handle situations in which an employee with a same-sex spouse moves to a jurisdiction that does not recognize marriage between same-sex couples.
Massachusetts
After marriage became available to same-sex couples in Massachusetts in May 2004, most Massachusetts employers extended opposite-sex spousal benefits to same-sex couples that obtained marriage licenses. In accordance with Massachusetts law, the same tax advantages that opposite-sex spouses have were also extended to same-sex spouses, decreasing costs for employers’ state payroll taxes and employees’ state income taxes for health benefits.
