On Oct. 25, 2006, the New Jersey Supreme Court held in Lewis v. Harris, 188 N.J. 415 (2006) that same sex couples in New Jersey are covered by the equal protection clause in New Jersey’s constitution. As a result, same sex couples have the same constitutional rights and protections as married heterosexual couples in New Jersey. The court’s decision then instructs the New Jersey Legislature to implement its holding by stating that “the name to be given to the statutory scheme that provides full rights and benefits to same sex couples, whether married or some other term, is a matter left to the democratic process.” In response to the court’s directive, on Dec. 21, 2006, the New Jersey Legislature enacted The Civil Union Law implementing the Harris decision. This law takes effect Feb. 19, 2007.
Civil Union Law
Under the new legislation, a “civil union” means a “legally recognized union of two eligible individuals of the same sex.” From an employment prospective, companies should be aware that the new legislation extends to civil-union couples the following benefits and protection:
- Health and pension benefits
- Inclusion under New Jersey’s Law Against Discrimination with a prohibition against discrimination on the basis of marital status
- Survivors’ benefits and payment of back pay wages under New Jersey Workers’ Compensation Act
- inclusion under the New Jersey Family Leave Act
However, just as companies must be aware of the Civil Union Law’s provisions that include same sex couples, they must be aware equally of federal law implications that may limit such rights. For example, in the Defense of Marriage Act (“DOMA”), the federal government defines marriage only as “a legal union between one man and one woman as husband and wife,” and the word “spouse” refers only to a person of the opposite sex who is a husband or wife. Arguably, in contrast with New Jersey’s Civil Union Law, federal law provides that the union of same sex partners cannot be considered marriage.
The conflict between federal and New Jersey law raises certain issues of which companies must be aware. For example, DOMA prevents certain health-related benefits from receiving tax-free status. As such, the value of domestic partner group health coverage is taxable income to the employee of a company. In order to apply the applicable law for benefits purposes, a company must determine whether its health plans are covered by ERISA or state law. The conflict between federal and state law can be seen also in the application of the federal Family and Medical Leave Act (“FMLA”) and New Jersey’s Family Leave Act. In contrast to New Jersey’s Family Leave Act, under the FMLA, employees would not be entitled for leave to care for a same sex partner.
The same federal-versus-state distinction arises with application of the Consolidated Omnibus Budget Reconsideration Act of 1995 as amended “(COBRA”). COBRA requires employers of 20-or-more employees to provide employees the right to temporarily continue their health coverage. However, COBRA is a federal law that is interpreted in accordance with DOMA. Thus, an argument arises whether same sex partners would be considered “spouses” for COBRA purposes. However, in considering this issue, employers should be aware that New Jersey has a “baby” COBRA law, that requires employers to provide continuation coverage to employees and their “spouses.” New Jersey’s law on health coverage continuation will likely be interpreted in accordance with Harris and the Civil Union Law.
In order to insure compliance with the new Civil Union Law, it is important for companies to do the following:
- Determine whether their health plans are covered by ERISA or by state law
- Insure that New Jersey Family Leave is extended to same sex couples
- Expand employment policies so that they apply to both opposite sex and same sex couples
- Insure that benefits are being treated appropriately for tax purposes