Biglaw, Gay, Gay Marriage, Google / Search Engines, Perks / Fringe Benefits, Tax Law

Biglaw Perk Watch: A Follow-Up on Google's Gay Gross-Up

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If you’re a gay employee and have a domestic partner who receives health benefits through your employer, you have to pay more in federal income tax — about $1,000 a year, on average. This is because federal law, thanks to the Defense of Marriage Act (DOMA), doesn’t recognize same-sex marriages. As a result, the feds treat employer-provided health benefits for domestic partners as a form of taxable income (if the partner is not considered a dependent).

(Note, however, that this could change. A federal judge in Boston recently struck down part of DOMA. Stay tuned to find out what happens on appeal.)

Earlier this month, we wrote about a perk that Google extends to its gay employees who find themselves in this situation. As reported by the New York Times, Google “essentially [covers] those costs, putting same-sex couples on an even footing with heterosexual employees whose spouses and families receive health benefits.” Google makes an extra payment to gay employees to make up for the increased tax burden — a perk that we dubbed “Google’s gay gross-up.”

We asked you, our readers, if any legal employers also offer this benefit. As it turns out, several do.

Find out which employers provide this perk — and vote in a poll on its fairness, which was hotly debated in the comments to our prior post — after the jump.

A reader directed our attention to this survey of employment benefits that various employers offer to their LGBT employees. The employers filled out the questionnaire in order to participate in last year’s Lavender Law Career Fair and Conference, sponsored by the National LGBT Bar Association. (Speaking of Lav Law, I will be there again this year, moderating a panel.)

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Check our the fourth column of the survey, which lists the employers who “adjust[] gross salary for domestic partners to offset tax burden.” It lists about a dozen employers, including several Biglaw firms. But one tipster suggests that you double-check before relying on the list:

Many firms say they do in reports to the National LGBT Bar Association for Lav Law, but when you follow up, it turns out they don’t.

[In terms of employers who do provide the gross-up,] I can confirm the ACLU, the Washington Lawyers’ Committee for Civil Rights and Urban Affairs, and Reed Smith.

In addition, we hear that Cleary Gottlieb — aka “Queery Gottlieb,” due to its sizable contingent of LGBT lawyers and staff — provides the gay gross-up.

CORRECTION (8/10/2010): We’re now hearing that Cleary does not offer this benefit. But another notable firm that begins with a “C,” Cadwalader, does furnish the gay gross-up.

But should employers be doing this? One commenter pointed out:

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My Biglaw firm won’t let me get health insurance for my (heterosexual) domestic partner/fiancee, but lets gay couples do that. Their reasoning is “you can get married.”

Well, that is kinda true. But it doesn’t appease another commenter, who’s outright incensed:

How is this policy not discriminatory against heterosexuals? If Google announced that it was paying white employees more than blacks across the board as a matter of corporate policy it would have a lawsuit on its hands within minutes.

The extra taxation doesn’t seem relevant to whether this is a discriminatory practice. The tax issue is between the gays and the federal government, having really nothing to do with Google.

Would it be appropriate for Google to offer its cigarrette smoking employees extra pay to make up for increased taxes on tobacco? Obviously not, and a disparity between smokers/non-smokers pay is exactly the same as paying the homos more.

Readers, what do you think? Argue in the comments, and vote in the poll:

2009 Career Fair Recruiters: Comparison of Employment Benefits [LGBT Bar Association]

Earlier: Biglaw Perk Watch: Google’s Gay Gross-Up

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