| Disclaimer: The law and legal
rules are subject to continual revision and
change. This article is dated April 30, 2003.
No attempt has been made to update this article
to reflect pertinent changes or developments
in the law, if any, since that date.
Recently, the New Mexico
legislature amended the Human Rights Act,
making it unlawful
to discriminate in New Mexico based on sexual
orientation or gender identity. Under the
amended Human Rights Act effective July 1,
2003, employers may not discriminate in compensation
or terms of employment against a person otherwise
qualified because of sexual orientation or
gender identity. On April 9, Governor Bill
Richardson also signed Executive Order 2003-010
extending employee benefits to domestic partners
of gay and lesbian State employees. New Mexico
law also prohibits discrimination on the
basis of “spousal affiliation” for
employers with 50 or more employees. The “spousal
affiliation” prohibition appears to
be an anti-nepotism rule, and not a rule
against discrimination in terms of marital
status. Among the important terms and conditions
of employment are benefits. This will raise
a number of issues for employers.
A federal law (the
Employee Retirement Income Security Act
of 1974, or “ERISA”)
applies in spite of state laws that conflict
with the federal law. This means that for
employers subject to the federal law – employers
that are not church employers or governments – state
laws such as the Human Rights Act cannot
require that employee benefits cover “domestic
partners.” Employers generally may
nonetheless provide for such coverage voluntarily,
except to the extent that there are rules
in the federal law regarding who receives
survivor’s benefits under retirement
plans. In addition, the IRS says that medical
expenses incurred by domestic partners are
deductible only if the state in which the
taxpayer is residing recognizes the taxpayer
as legally married. The IRS has ruled, under
the 1996 Defense of Marriage Act, that an
employee’s same sex domestic partner
does not qualify as the employee’s
spouse for purposes of deductions for medical
expenses.
For ERISA benefits (medical and dental plans
and cafeteria plans, as well as retirement
plans), the New Mexico Human Rights Act is
ineffective because of the federal law. Employers
may nonetheless allow domestic partner coverage
in medical plans, but employers must follow
their wording of the plan, so will need to
amend the plans to direct such coverage.
For benefits that are not regulated by the
federal law, either because the employer
is not subject to that law, or because of
the nature of the benefits, such as family
leave benefits, there is a difficult set
of choices
In other states which
have prohibited discrimination on the basis
of sexual orientation for several
years, Courts have ruled on what discrimination
is prohibited. Courts have generally permitted
employers to provide benefits not covered
by the federal benefits law to legal spouses
but not to domestic partners. Courts have
seen an important difference between being
a domestic partner and a spouse. Spouses
have a legal duty to provide for each others’ medical
care and support, whereas domestic partners
do not have such a legal obligation. Because
benefits help to provide for medical care
and support, courts have found providing
insurance coverage to help employees satisfy
those duties, without providing that coverage
to individuals who have no such legal obligations,
a reasonable distinction. For benefits not
covered by the federal law such as Family
Leave, courts generally have found it nonetheless
reasonable to allow the distinction, based
either on administrative simplicity, or perceptions
of legislative intention.
The Executive Order applies to the domestic
partners of employees of the State of New
Mexico. To be a domestic partner covered
by the Order, the individual must be in a
committed or more long term relationship
and share a primary residence for more than
twelve months, be jointly responsible for
the common welfare of the State employee,
and share financial obligations with the
State employee: they must sign an affidavit
to that effect. The Order does not limit
domestic partners to same-sex partners. By
July 1, 2003, such domestic partners are
to be afforded the same benefits as spouses.
New Mexico courts will, of course, reach
their own decision on these issues. The little
official history of the new law as it worked
its way through the Legislature is not going
to give courts much help in determining what
the New Mexico legislature intended with
the new changes. Until the courts reach these
issues, employers have a number of decisions:
1. All employee manuals
and policy statements dealing with discrimination
should be reevaluated
in terms of the new law, and those portions
particularly dealing with benefits should
reflect the employers’ decisions as
to how to provide benefits to domestic partners.
2. Employers wishing to extend domestic
partner benefits will need to determine how
to define a domestic partners (for example,
an exclusive and committed relationship with
an individual occupying the same residence
for a specified period of time, perhaps with
affidavits as to mutual support, etc.).
3. If domestic partner benefits for ERISA
benefits will be extended, will all domestic
partners be able to secure benefits, or only
same sex domestic partners?
4. For benefits not subject to the federal
law, such as benefits to care for sick family
members, will domestic partners and their
children be covered?
5. If ERISA benefits will be offered, what
limitations will any insurance companies
impose?
6. Lastly, all summary plan descriptions
and other communications regarding benefits
(such as information on websites) will need
to be updated.
State employees with
domestic partners interested in benefits
will need to submit an affidavit
and begin planning for benefits as soon as
possible: enrollments for a July 1, 2003
effective date will be done shortly. The
State of New Mexico will need to evaluate
various benefits: for example, there will
be legal issues as to whether changes in
the PERA and ERB status should be made to
grant domestic partners survivors’ benefits.
Tax reporting issues also are complex and
some reprogramming of computers will be needed
for accurate tax reporting.
Because the new law goes into effect on
July 1, 2003, employers should address these
issues promptly.
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