Biglaw, Gay, Gay Marriage, Health Care / Medicine, Money, Perks / Fringe Benefits, Tax Law

Biglaw Perk Watch: The Gay Gross-Up Gains Traction

As many of you know, here at Above the Law we have been tracking which major law firms offer a non-salary benefit that we’ve dubbed the gay gross-up. As we’ve previously explained, quoting a memo issued by Simpson Thacher, the gay gross-up is “[a] ‘gross-up’ for employees who enroll same-sex partners in the Firm’s health benefits plans to offset any federal, state and local income taxes paid on the value of the partners’ benefits which heterosexual spouses are not subject to.”

Today we are pleased to report that two top firms have joined the club. Kudos to Debevoise & Plimpton and Shearman & Sterling for standing on the side of equality. You can read their announcement memos, issued earlier this month, after the jump.

We have added these firms to our list. By the way, for those firms that would rather appear on a list maintained by the New York Times than one maintained by Above the Law, you should note that the NYT is also monitoring which workplaces provide this perk. The NYT list includes employers of many different types, not just law firms, and features some of the nation’s most innovative companies, such as Google and Facebook and Apple.

With the addition of Debevoise and Shearman, which leading law firms provide this benefit? Let’s take a look….

This list seems to grow each month. Here are the major law firms (think Am Law or Vault 100) that we believe provide the gay gross-up:

Please email us, subject line “Gay Gross-Up,” with corrections or additions. Thanks!

For Gay Employees, an Equalizer [New York Times]
A Progress Report on Gay Employee Health Benefits [Bucks / New York Times]

Earlier: Prior ATL coverage of the gay gross-up


Date: June 2, 2011

To: New York and Washington, D.C. Offices

Cc: All Partners

Re: Benefits Program Change for Same-Sex Couples

I am pleased to announce that effective June 2011, Debevoise will change its benefits program to offset taxes paid by employees currently taxed on the value of medical benefits for their same-sex spouses or same-sex domestic partners. This change will equalize benefits received by employees with same-sex spouses and same-sex domestic partners with those received by employees with opposite-sex spouses.

Under U.S. federal and state tax regulations, gay and lesbian employees who elect to cover their spouses and domestic partners under the firm’s medical, dental and vision plans are disadvantaged relative to married heterosexual employees in two ways: 1) the value of the firm’s subsidy of the spouse or domestic partner’s medical coverage is considered income to the employee and is taxed as such; and 2) the employee must pay the spouse’s or domestic partner’s portion of the medical premiums out of post-tax dollars rather than pre-tax dollars.

The new benefit will consist of a payment to eligible employees sufficient to cover the additional taxes on both the firm subsidy and the premium cost. Employees who elected coverage of their same-sex spouses or same-sex domestic partners for 2011 will be covered beginning in June. Those wishing to elect coverage for next year will have the opportunity to do so during open enrollment in Fall 2011.

We are pleased that we are able to implement this change in our benefits program, which we believe is consistent with our commitment to inclusion and respect for everyone who works at our firm.

If you have any questions about this change in coverage, please contact [Redacted].

Rick Evans


June 6, 2011

We are pleased to announce that Shearman & Sterling will join other leading law firms and organizations in providing tax gross-up payments for employees who are taxed on the value of health benefits provided by the firm to their same-sex domestic partners and their domestic partners’ children. As background, the value of health insurance benefits for same-sex couples (regardless of marital status under state law) is today considered additional imputed taxable income for the employee.

This firm action reinforces our strong commitment to ensuring that Shearman & Sterling remains an inclusive workplace for all employees.

The gross-up will be done quarterly at the appropriate supplemental tax rates. For the individuals who already have elected domestic partner coverage, an adjustment to the already imputed income will be made on the July 1 paycheck. Please contact [Redacted] with any questions.

(hidden for your protection)

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