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Google Grants Gay Workers Higher Pay to Make Up for Tax Disparity

Google Grants Gay Workers Higher Pay to Make Up for Tax Disparity

Google has announced that, starting this week, gay and lesbian employees in the United States will be given a higher rate of pay to compensate for the tax disparity they face when claiming health insurance benefits for their same-sex domestic partners when compared to Google’s married heterosexual workers.

From the New York Times:

On Thursday, Google is going to begin covering a cost that gay and lesbian employees must pay when their partners receive domestic partner health benefits, largely to compensate them for an extra tax that heterosexual married couples do not pay. The increase will be retroactive to the beginning of the year.

“It’s a fairly cutting edge thing to do,” said Todd A. Solomon, a partner in the employee benefits department of McDermott Will & Emery, a law firm in Chicago, and author of “Domestic Partner Benefits: An Employer’s Guide.”

Google is not the first company to make up for the extra tax. At least a few large employers already do. [Cisco, Kimpton Hotels and the Gates Foundation are among those businesses who cover the extra tax.] But benefits experts say Google’s move could inspire its Silicon Valley competitors to follow suit, because they compete for the same talent.

Under federal law, employer-provided health benefits for domestic partners are counted as taxable income, if the partner is not considered a dependent. The tax owed is based on the value of the partner’s coverage paid by the employer.

It is estimated that, on average, Google’s gay and lesbian employees used to pay $1,069 per year more than their fellow married employees who had identical coverage. The article notes that this change in Google’s policy came about after employees specifically brought up the issue and highlighted the extra financial burden they faced. Google, who in the past has made a formal statement against California’s gay marriage ban, known as Proposition 8, in which it specifically mentioned that the company opposed the ban because of the effect it would have on its employees, has now responded with this change.

It is worth noting that the increase will only be given to same-sex partners as, although gay and lesbian couples can now get married in certain states, the federal Defense of Marriage Act (DOMA) prevents the government from recognizing these marriages as being valid and therefore can not grant them the estimated 1138 benefits marriage provides. Heterosexual domestic partners, on the other hand, can avoid the added tax by marrying and therefore Google will not be granting them this additional pay. The change will be applied retroactively and backdated to January 1 of this year.

There is a hope that this change could create a ripple effect in Silicon Valley as other companies, particularly those who are in competition with Google or are in affiliated industries, consider making similar changes in order to remain competitive.

On this latest change, Google’s vice president for people operations, Laszlo Bock, said: “It will cost some money, but it was more about doing the right thing.”

Last year, analysts for the New York Times calculated that, over a lifetime, not having access to the 1138 benefits that marriage grants heterosexual couples could cost same-sex partners between $41,196 and a staggering $467,562 over a lifetime.

Care2 Action:

Equal Rights for All Families: Repeal the Defense of Marriage Act!


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Photo used under the Creative Commons Attribution License, with thanks to RinzeWind.

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102 comments

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11:07AM PST on Jan 16, 2011

Heather G: You rule!

11:05AM PST on Jan 16, 2011

Jami Winn: Gay employees of Google are not payed more. They are compensated for an unfair tax. Go back and read the article again and this time, TRY and understand what is written!

11:19AM PDT on Sep 12, 2010

I'm not sure Google is moving in the right direction. Their intentions are good, I would rather see them come out in favor of gay rights.

11:51AM PDT on Aug 4, 2010

noted

3:20AM PDT on Aug 3, 2010

Way to go, Google!

8:19PM PDT on Jul 29, 2010

What the hell is wrong with you people gays should not be payed more just cuz there gay we as AMERICANS are all suffering

7:08PM PDT on Jul 13, 2010

I can see the point to it...but it doesn't make it right.

7:48AM PDT on Jul 12, 2010

If more companies do this they might get the attention of the lawmakers...we certainly don't seem to be able to get the message through...Good going Google.

10:49AM PDT on Jul 8, 2010

Heather G - I had H&R Block do several dry runs on my taxes this past 2009 tax year...If I had been able to file singly I would have gotten an extra $15 back, married filing seperately would have given me an extra $3 back, and married filing jointly would have resulted in $0....Excuse me again when I say where's the advantage in being married...Not trying to be a jerk about this,...Just trying to throw some reality in here.

Health insurance from the job is taken out in one lump sum before taxes are taken out of the weekly pay...If an employer is separating health insurance out of someone's pay, then there is a serious issue and an alternative needs to be looked into by the people affected..You are never forced to take part in employer based health plans...I won't throw my health care costs up in this post since I know my union has ensured employee payments that are far less than the norm.

This wage disparity should be used by the people as an example of why health insurance should be granted to all people's of this country...I won't back down on my stance that unequal pay for the same job is a serious misjustice...Women should be outraged that they've been thrown down, yet another peg of the wage war ladder.

7:03AM PDT on Jul 8, 2010

James, well you're married right?? so whatever health insurance benefits your spouse gets through your employer (if your employer even provides health insurance) is NOT counted as taxable income. Isn't getting a reduction on your taxable income at tax time an advantage?? Yes!! It means you pay less taxes. And why are you getting the advantage?? because of your sexual preference and your commitment to it (being straight and married).

But if your partner is the same sex as you and you're not allowed to get married you can't get that reduction no matter how long you've been together and no matter how many children you have together.

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