Employers Must Comply with New Jersey Civil Union Law

The New Jersey Civil Union Law went into effect on February 19, 2007.  New Jersey employers should immediately review their existing personnel and benefit policies and revise them where applicable, as discussed below. 

The new Civil Union law allows same-sex couples to enter into civil unions in the same manner that opposite-sex couples may enter into marriage.  Once couples enter into civil unions, they have all the rights and responsibilities of opposite-sex married couples.  These rights and responsibilities are not confined to the realm of family law and will have a number of effects on New Jersey employers.  Listed below are several issues to which employers should pay attention as the Civil Union law goes into effect.  Employers should, however, be mindful that their obligations under the following laws may change as courts wrestle with the implications of the Civil Union law.  It is particularly difficult to predict what will happen where the federal and state laws conflict.  Such conflicts will likely be resolved in the courts over the course of many years.

Background

In October of 2006, the New Jersey Supreme Court ruled that under the New Jersey Constitution, the state could not withhold the benefits of marriage from same-sex couples.  The Court ruled that the state could either grant same-sex couples access to marriage or establish an alternate form of union that would convey all the benefits of marriage.  In response to the Court’s ruling, the New Jersey Legislature passed the Civil Union law granting the same legal protections to same-sex couples as married opposite-sex couples.  The law went into effect on February 19, 2007.

Family Leave

Under the New Jersey Family Leave Act (NJFLA), eligible employees may take up to 12 weeks of leave within a 24-month period to care for a “family member” who is suffering from a “serious health condition.”  The term “family member” includes child, parent or spouse, and now will include a civil union partner under the new law.  Note, however, that under the federal Family and Medical Leave Act (FMLA), employees are not eligible to take unpaid time off to care for their civil union partner. 

Group Health Plan Coverage and Other Employee Benefits

Employers that offer group health plan coverage for the spouses of employees who are in opposite-sex marriages may be required by the Civil Union law to offer the same benefits to the partners of employees who are in same-sex civil unions. 

• Employers that offer group health coverage under state-regulated insurance contracts generally are required to offer coverage in accordance with the terms of the policy.  State regulators may prohibit insurers from offering group health policies that permit coverage of a spouse of an employee in an opposite-sex marriage unless the policy offers coverage on the same terms to partners of employees in a same-sex civil union.  Thus, employers should consult with their insurance carriers to determine whether their current group policies are deemed to be amended so that coverage is available to same-sex partners in civil unions if coverage is available to partners in an opposite-sex marriage.  According to a bulletin issued by the commissioner of the New Jersey Department of Banking and Insurance, inclusion of civil union partners in insurance plans should not be deferred until the policy renewal period.  The bulletin stated that insurance carriers should allow employees to make an election to cover a dependent acquired through a civil union in the same manner as the opportunity would be provided to cover a dependent acquired through a traditional marriage.
• Most private-sector employers that offer group health benefits through self-insured plans, however, may not be affected by state laws purporting to dictate the eligibility terms of such plans.  As a general rule, state laws that “relate to” employee benefit plans that are covered by the federal Employment Retirement Income Security Act (ERISA) are preempted by federal law.  Thus, in these cases, employers arguably are not required by New Jersey law to adopt ERISA-governed plans that grant the same benefits to civil union partners as they do to the spouses of married employees  (although New Jersey employers may choose to do so). 
• The Civil Union law also requires that public-sector employers treat civil union partners the same as married partners.  Since employee benefit plans sponsored by public-sector employers are not covered under ERISA, these employers will be required to provide the same benefits to civil union partners on a par with spouses of opposite-sex married employees.

Employers that choose to offer group health plan coverage for civil union partners of employees should be aware that there is a difference in the federal income tax treatment of employer contributions for such coverage between coverage for an opposite-sex married spouse and a same-sex civil union partner.  Employer-provided coverage of a non-employee as a result of that person’s relationship with the employee is includible as wages in the gross income of the employee unless the person receiving the coverage is the spouse in an opposite-sex marriage or a dependent of the employee under the Internal Revenue Code.  However, the benefits are not taxable under New Jersey state law.

As is the case with self-insured group health plans, retirement plans that are subject to ERISA arguably will not be affected by the Civil Union law, because ERISA generally preempts state law in this area.

Employers should be aware that many of the organizations that supported the litigation that led to the adoption of the Civil Union law have expressed an interest to explore arguments supporting the extension of benefits under ERISA-governed plans to partners in civil unions.  Thus, this is an area that could well generate additional litigation in the future.

Other Employee Benefits

Employers that offer other benefits to their married employees such as life insurance, bereavement leave, and parental leave must now provide equal benefits to their employees in civil unions.

Workers’ Compensation

The Civil Union law extends survivor benefits and payment of back wages to civil union partners.

Employment Discrimination

The Civil Union law adds “civil union status” to the list of protected categories under the New Jersey Law Against Discrimination (LAD).  The LAD already protects sexual orientation and domestic partnership status.

Interplay with Domestic Partnership Law

Pursuant to the New Jersey Domestic Partnership Act, which was adopted in 2004, same-sex couples, and opposite-sex couples over age 62, have the option of registering their domestic partnership with the state in order to receive certain benefits, such as the right to hospital visitation, and the right to make medical decisions for their domestic partner.  In passing the Civil Union law, the state also set up a commission to study the effects of the law and the ongoing necessity for domestic partnerships in light of the ability of same-sex couples to join in civil unions.  When the Domestic Partnership Act was passed, its benefits were not extended to all opposite-sex couples because of those couples’ ability to be married.  It is therefore possible, now that same-sex couples may engage in marriage-equivalent civil unions, the state will determine that same-sex couples should also be prohibited from registering for domestic partnership due to their ability to engage in civil unions. 

An open question at this time is whether an employee in a domestic partnership is entitled to the same benefits as an employee in a civil union.  The new Civil Union law does not specifically address the issue of whether domestic partners have the same rights as civil union partners – but it does not appear that the law was intended to expand the rights of domestic partners in this way.  Thus, for example, for private-sector employers, it does not appear that the partner of an employee in a domestic partnership is entitled to the same medical benefits as the spouse of an employee in an opposite-sex marriage or the partner of an employee in a same-sex civil union.

Treatment of Out of State Unions 

The New Jersey Civil Union law does not address the issue of how same-sex couples who have entered into a marriage in another state or country will be treated under the law.  However, the New Jersey Attorney General issued an advisory statement that marriages or civil unions entered into by same-sex couples in other states or in foreign nations will be valid under New Jersey law.  Such marriages will be recognized as civil unions in New Jersey.  Domestic partnerships entered into by same-sex couples in other states will also be valid in New Jersey and will be recognized as civil unions where the rights conferred by the state in which the domestic partnership was entered closely approximate those rights conferred by civil unions.  Domestic partnerships from states in which the rights conferred more closely resemble domestic partnership rights will be recognized in New Jersey as domestic partnerships.

Additional Information

If you have any questions about this new law or its ramifications, contact the Ogletree Deakins attorney with whom you normally work or the Client Services Department at 866-287-2576 or via e-mail at clientservices@ogletreedeakins.com.

Note: This article was published in the February 23, 2007 issue of the New Jersey eAuthority.