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Employee Benefits Extended to Gay Spouses by U.S. Ruling

Sept. 19 (Bloomberg) -- Individuals in same-sex marriages will be entitled to the employer benefits of their spouse even if they live in a state that doesn’t recognize their union, the U.S. Labor Department said.

Under guidance issued by the department Wednesday, the terms “spouse” and “marriage” under employee-benefit rules would apply to legally married gay couples. Prior to the ruling, employers in states that do not recognize gay marriage did not always extend benefits to spouses, according to Marcia Wagner, an attorney who specializes in employee benefits law.

“Some states recognize same-sex marriage,” Wagner said in an interview. “Some don’t. Some might in the future. What the DOL is saying here is listen, if you are married validly in any state that recognizes same-sex marriage, you’re considered married no matter where you live.”

The ruling covers private-sector employee benefit plans including pensions, 401(k)s, health and life insurance and disability plans.

“This decision represents a historic step toward equality for all American families,” labor secretary Thomas E. Perez said in an e-mailed statement. “The department plans to issue additional guidance in the coming months as we continue to consult with the Department of Justice and other federal agencies.”

Supreme Court

The decision follows the U.S. Supreme Court’s ruling in June to overturn part of the federal Defense of Marriage Act, which had prohibited gay couples from transferring retirement accounts between spouses in the same way as heterosexual couples.

Assessing the scope of the ruling is difficult because same-sex marriage is new concept, according to Jeff Smith, an attorney who works with employee benefits. At some point, most benefit plans will include employees who are in a same-sex marriage, he said.

There are more than 130,000 married, same-sex couples in the U.S., according to estimates from the 2010 Census. They have the right to marry in 13 states and the District of Columbia.

“This is helpful because prior to this rule I would imagine that different employers would have different takes on this rule,” Smith said in an interview. “This is a very politically charged topic. Now we know that employers are playing by the same rules.”

The Treasury Department announced Aug. 29 that gay spouses in all states will be treated as married under federal tax law even if local authorities don’t recognize their marriages. Prior to that, the Internal Revenue Service was prohibited from letting married homosexual couples file joint tax returns.

It is the second expansion of benefits for American workers this week. The Labor Department on Sept. 17 issued a final rule to extend minimum wage and overtime benefits to nearly 2 million home health-care workers.

To contact the reporters on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net; Margaret Collins in New York at mcollins45@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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