W ith the recent enactment of the To enter into a domestic - PDF document

G Employment Law Alert February 2004 The Domestic Partnership Act By Andrew E. Graw, Esq. and Stefanie P . Tavaglione, Esq. W ith the recent enactment of the To enter into a “domestic partnership,” an Domestic Partnership Act, which will eligible couple must file an Affidavit of Domestic become effective on July 11, 2004, New Partnership with their local registrar. The couple Jersey has taken a significant step in extending then receives filed copies of their Affidavit, as well rights of married individuals to those in non- as a Certificate of Domestic Partnership. traditional relationships. The Act provides Under certain circumstances, a member of a qualifying same-sex couples and qualifying qualifying domestic partnership may enjoy some of opposite-sex, unmarried couples over the age of 62, the rights of a “certified” domestic partner without many of the same rights as legally married couples, formally filing an Affidavit of Domestic including visitation and decision-making rights in a Partnership. For example, in an emergency health care setting, certain tax-related benefits, medical situation, domestic partners will be and, in some cases, health and pension benefits. permitted to accompany or visit each other, even if “Domestic Partners”-- they have not filed an Affidavit, as long as the Definition and Requirements other requirements of the Act have been met. Additionally, any third party, including an To qualify as “domestic partners” under the Act, employer, may consider a person as a member of a couples must meet certain requirements. For domestic partnership, even in the absence of an example, the couples must be at least 18 years of Affidavit or Certificate. age, must share a residence, and must have some level of joint finances. Additionally, the Act applies Rights and Benefits Under the Act to two specific groups of individuals: The Act extends to domestic partners many, but (1) same sex couples, premised on the fact not all, of the rights enjoyed by legally married that such couples are not permitted to enter couples. Several of the most significant rights and into legal marriages; and benefits are outlined below. (2) opposite sex couples where both Health Care Matters: There are several individuals are 62 years of age or older, important rights created for domestic partners with because many such couples decide not to respect to health care. Domestic partners will be marry so that they may continue to receive permitted to legally act as each other’s medical important benefits like Social Security and representative, meaning that one partner may Medicare. make health care decisions for the other when the This document is published by Lowenstein Sandler PC to keep clients and friends informed about current issues. It is intended to provide general information only. L Roseland, New Jersey Telephone 973.597.2500 65 Livingston Avenue www.lowenstein.com 07068-1791 Fax 973.597.2400

G latter is incapacitated. In addition, health care addition, for tax purposes, the definition of facilities will be required to extend visitation rights “dependent” has been amended under New Jersey to a patient’s domestic partner and certain family State tax law to include a domestic partner, thereby members of the domestic partner. allowing a taxpayer a personal exemption for his or her domestic partner who does not file separately. Health and Retirement Benefits: In general, the Act will require that same sex domestic partners Discrimination: A very significant aspect of the (but not opposite sex, unmarried couples over the Act is that it amends the New Jersey Law Against age of 62) be treated like married couples for Discrimination (“NJLAD”) to include “domestic purposes of health and retirement plans sponsored partnership” as a status that is protected from by the State of New Jersey. Non-State public discrimination. NJLAD is amended to provide that employers (such as counties, municipalities, and “It shall be an unlawful employment practice, or, as boards of education) that participate in State- the case may be, an unlawful discrimination: a) For sponsored health and retirement plans may, but are an employer, because of the race, creed, color, not required to, treat domestic partners of their national origin, ancestry, age, marital status, employees as spouses or dependents for such domestic partnership status, affectional or sexual purposes. orientation, genetic information, sex, disability … to refuse to hire or employ or to bar or to discharge The Act also will require that all individual and or require to retire…from employment such group health and dental insurance policies individual or to discriminate against such delivered or issued in New Jersey offer dependent individual in compensation or in terms, conditions coverage for same sex domestic partners if or privileges of employment…”. Domestic partners dependent coverage is otherwise available under therefore will have protection from discrimination the policy. In contrast, employers that provide in the workplace on the basis of their status as a health coverage through self-insurance need not domestic partner. extend dependent coverage to same sex domestic Effect of the Act on Private Employers partners of employees. Tax Benefits: Domestic partners will gain several NJLAD: Employers should review and update New Jersey State tax benefits under the Act. For their employee handbooks and non-discrimination example, the transfer of property from one policies to address the new protected status domestic partner to another will be taxed at the afforded domestic partnerships. Employees also same rate as a property transfer between spouses. should be advised of this important change during Also, the payment of a pension, annuity, retirement employee non-discrimination and anti-harassment allowance, or return of contributions under a tax- training sessions. qualified retirement plan to a surviving domestic Health Insurance and Other Employee Benefits: partner is exempt from New Jersey State tax if paid As discussed above, while employers that provide as a result of the participating partner’s death (just health coverage through insurance will not, on and as a death benefit would be exempt from tax if paid after July 11, 2004, be able to purchase policies to a the surviving spouse of a participant). In without domestic coverage, self-insured employers

G need not cover domestic partners. However, there Family Leave: The Act did not amend New are many reasons why employers may choose to Jersey’s Family Leave Act to allow a domestic cover domestic partners even if not required to do partner to take a leave of absence from work to care so by the Act: to create equity among married and for his or her domestic partner, although such unmarried employees, to be more competitive with leaves of absence are required for married respect to recruitment, to be viewed as a socially employees. However, an employer may, of course, responsible employer, and to improve morale and permit leaves of absence to domestic partner employee relations. Naturally, employers deciding employees on the same or similar terms. whether to extend health coverage to domestic Withholding: As discussed above, the Act allows partners should consider the costs of offering such domestic partners to claim a personal exemption benefits and administrative needs. For example, a for New Jersey State income tax purposes for his or self-insured employer who desires to extend health her domestic partner. Therefore, employers may coverage to domestic partners should amend it’s wish to afford affected employees an opportunity to health plan, establish a written policy for change their personal exemptions for withholding determining who is a domestic partner (which may purposes. be different than the requirements of the Act) and when a domestic partnership ends or is deemed to If you have any further questions regarding the have ended. Employers should require a copy of Domestic Partnership Act, in general, or specific the Certificate of Domestic Partnership from any questions as to how it impacts your workplace, or any employee who wishes to cover a domestic partner other employment practices or compliance issues, please or other evidence of the domestic partnership do not hesitate to call Martha L. Lester, Chair of the (such as joint bank accounts, residences, or other Employment Law Practice Group, Andrew E. Graw, evidence of co-dependency and co-habitation). Chair of the Employee Benefits and Executive It is important to note that certain tax Compensation Practice Group, or Stefanie P . consequences normally taken for granted with T avaglione, an associate of the Employment Law respect to employee benefits do not necessarily Practice Group, at (973) 597-2500. apply to a domestic partner, unless he or she can be declared as a “dependent” of the employee for Federal income tax purposes. For example, health coverage may result in taxable income to the employee if his or her domestic partner does not qualify as the employee’s “dependent.” Similarly, expenses of a domestic partner are not reimbursable under a flexible spending or “cafeteria” plan unless the domestic partner is a “dependent” of the covered employee.