Windsor & DOMA: Issues for Cross-Border Employers

by Fisher Phillips

On June 26, 2013, the U.S. Supreme Court ruled in U.S. v. Windsor that Section 3 of the Defense of Marriage Act (“DOMA”), which defined “marriage” as strictly between opposite-sex couples and “spouse” as referring only to a person of the opposite sex who is a husband or a wife, was unconstitutional. Given that there are hundreds of federal statutes and regulations using and giving effect to terms such as “spouse,” “marriage,” and other similar terms, this ruling has far-reaching legal implications.  Employers and employees are particularly affected in a wide-range of areas—from immigration to employee benefits to taxation.

One question the Supreme Court left unanswered was how to apply this ruling to same-sex couples who had been legally married elsewhere, but currently resided in a state which did not recognize such marriages. (In fact, as discussed in more detail below, the first post-Windsor judgment involved such an issue: where a same-sex couple married in Canada, but then resided in a state which did not recognize their marriage.)

Such questions have begun to be answered, with several federal agencies recently issuing guidance adopting a “state of celebration” interpretation, under which same-sex couples legally married in a U.S. state or territory or any foreign jurisdiction with legal authority to sanction marriages will be considered married under federal law. Thus, an employee legally married in a foreign country which recognizes same-sex marriage will be treated as married for U.S. federal law purposes, regardless of whether the state or foreign jurisdiction in which the employee is domiciled or where the employee works recognizes same-sex marriage.

Adopting a “state of celebration” rule is particularly good news for large employers with employees (and/or their spouses) in multiple states and abroad. Had the federal agencies adopted a “state of domicile” interpretation (an approach which would have recognized same-sex marriages only if a couple resided in a state or foreign jurisdiction that recognizes same-sex marriages), employers would have faced a major administrative headache. Specifically, they would have had to track the domiciles and adjust benefits provisions and tax withholdings for their mobile workforce based on the ever-shifting legal landscape of same-sex marriage recognition among states and foreign countries.

Fortunately, employers can now rely on a uniform application of the Windsor decision and new federal regulations.

Accordingly, the State Department has begun adjudicating visa applications of same-sex spouses in the same manner as those of opposite-sex spouses. Similarly, the U.S. Citizenship & Immigration Services has indicated it will adjudicate work authorization petitions in the same manner, but will also reopen prior work authorization petitions dating back to 2011 which were denied solely on the basis of Section 3 of DOMA.

The Department of Labor has directed that the Family and Medical Leave Act’s (“FMLA”) protections will now extend to same-sex couples. In other words, otherwise eligible employees are now able to take protected time off of work to care for their ailing same-sex spouses.

ERISA benefit plans are also affected, given ERISA’s requirements for plans to contain certain spousal benefit provisions and protections. For example, retirement plans will need to recognize same-sex spouses for purposes of spousal consent requirements for distributions, annuities, death benefits, and rollovers and COBRA continuation coverage must now be offered to same-sex spouses.

In addition, employers and plan administrators will need to review their ERISA plan documents and may need to clear up ambiguous definitions of “spouse” or other marriage-related terms (and particularly definitions referencing DOMA) to ensure compliance with federal law. A recent post-Windsor federal court case dealt with ambiguous definitions of “spouse” under a law firm’s retirement plan after a lawsuit over entitlement to death benefits by the same-sex widow (from a Canadian marriage) of a deceased employee. The court ultimately awarded death benefits to the widow as the “surviving spouse.”

Windsor will also impact taxation related to employer-sponsored health plans. For the past several years, more and more employers offered health coverage to same-sex spouses. However, prior to the decision such coverage generally translated to income tax liability for the employees. Under IRS guidance, provision of healthcare coverage to same-sex spouses generally will no longer will be imputed as taxable income to the employee on the federal level. (However, depending on the state, such benefits may still trigger state income tax liability.)

Along the same lines, employers may need to correct for overpayments of employment taxes for 2013 (and possibly prior years). The IRS has laid out various filing alternatives for doing so. In addition, some employers may need to adjust the level of benefits provided if they had previously “grossed up” benefits to employees in same-sex relationships to counter their tax liability in order to provide the same after-tax benefits to employees in opposite-sex marriages on a relative basis.

The foregoing are just a few of the immediate issues arising for employers and employees. A number of outstanding issues remain, particularly relating to retroactive application of the Windsor decision. For example, guidance is needed to address issues such as whether a same-sex spouse should be given a retroactive chance to make an annuity payment election and whether there should be some sort of retroactive beneficiary change.

The IRS, and other relevant agencies, have indicated additional guidance will be issued likely by year-end.  New litigation and court decisions are also likely to shape this rapidly evolving area of law, including cases that affect employers with employees who have been married in countries outside of the United States.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fisher Phillips | Attorney Advertising

Written by:

Fisher Phillips

Fisher Phillips on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.