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In 1996, Chubb Corp. began to offer health benefits to the partners of gay employees. Prudential Insurance did it in 2000. And last year, Public Service Enterprise Group followed suit.
These New Jersey-based companies are part of a quiet revolution that has swept through corporate America as governments and the courts have wrangled over the rights of gay couples over the last decade. That's a big reason October's state Supreme Court ruling that New Jersey must recognize same-sex partnerships will have only a modest impact on businesses that provide health benefits. The other is that same-sex couples account for only about 1 percent of the workforce, so even small businesses that will be required to adopt the same policy shouldn't be affected to any degree. The court, in deciding that gay couples must have parity with their heterosexual counterparts, left state legislators to work out the details. Specifically, they must determine whether to legalize same-sex marriage or -- most likely -- some form of civil union. Either way, the court ruling's biggest impact on business is that it clearly requires companies to provide gay and straight workers with the same benefits. So if an employer provides health coverage for straight spouses, it will have to do the same for gay partners. Likewise, gay employees will be able to take family leave to care for their partner in a time of emergency -- a benefit that was previously available only to straight employees. But business has been ahead of the curve. San Francisco-based Levi Strauss & Co. became the first Fortune 500 company to offer health benefits for gay domestic partners in the early 1990s, followed by Microsoft, Apple and Nike. Chubb was the first prominent New Jersey-based corporation to take the step, and about 20 others have followed its example. A study by the Human Rights Campaign Foundation, a Washington, D.C.-based gay rights group, found that just over half of Fortune 500 companies provide same-sex health benefits. A separate foundation study of 446 major companies gave 138 of them top marks on a range of gay equality issues. Nine New Jersey corporations were among them, including Avaya Inc., Chubb Corp., Lucent Technologies, Merck & Co. and Prudential Insurance. Gay rights advocates say the corporations are acting in their own best interests. "Business strives to do what is good for business," said David Buckel, marriage project director at Lambda Legal, which argued the New Jersey case before the state's high court. "It means you are treating employees well," he said. "You keep them because they are treated well. And they work hard because they are treated well. "In the end, it means more talent, and more productivity." Spokeswoman Lori McDonough said Prudential began offering the benefits to stay competitive with other financial services companies. Of 20,000 Prudential employees today, 18,000 claim health benefits but only 2 percent of those claim coverage for a domestic partner. The company doesn't track how many are gay. "We just want to be able to have an attractive suite of benefits to help us recruit the talent that we need to be successful," McDonough said. "It shows that we are attuned to the diverse needs of a diverse workforce." Chubb Corp. offered health benefits to same-sex partners as part of its effort to cultivate loyal, long-serving workers, said Kathleen Marvel, Chubb's chief diversity officer and senior vice president. Some of the company's highly valued employees were gay, she said. And so in 1997, the company expanded the policy to give gay and straight employees the same rights -- including family leave if the partner is sick and bereavement leave for the death of a partner or the partner's close family. "Some of the best people are gay, and we want them to stay here," Marvel said. Gay rights advocates say that the Supreme Court ruling will have a similarly positive effect on the state workforce. Steven Goldstein, chairman of Garden State Equality, the leading gay rights group in the state, said same-sex marriage in particular would be "good for the economy." "You would see an influx of people from all over, and some top talent," he said. Whether that will be good for employers is unclear. Small businesses with few employees are particularly affected by increases in health care expenses or worker absence for family leave. But if the state's experience after the enactment of the Domestic Partnership Act in 2004 is any guide, businesses are not likely to see much impact from the court ruling. The act gave gay government employees who register as domestic partners with the state the same workplace benefits as straight ones, and identical state income and inheritance tax benefits. In the two years since the act took effect, the state registered 2,309 female civil unions and 1,500 male civil unions, for a total of 3,809 couples. But only 180 of the state's 77,865 employees have claimed domestic partner benefits since the law passed, according to the state Treasury Department, which does not record how many are same-sex partners. Gay advocates say a similarly modest change would probably occur in the private sector. The foundation studied nationwide census, business pattern and Department of Labor compensation data and calculated that 96 percent of firms would see no additional health benefit costs if gay marriage were legalized. Companies with fewer than 500 employees would on average have no more than one worker who sought health benefits for his or her same-sex partner, the foundation found. And those with more than 500 employees would average between six and seven such employees, at a combined cost of about $25,000 a year. That figure, which is based on the 2003 average cost an employer paid for employee family health care of $3,781, would be significantly higher today. The report concluded that the business costs "of allowing same-sex couples to marry will be no greater than the costs caused by fluctuations in the U.S. heterosexual marriage rates." Indeed, the prospect of gay marriage has caused little stir in New Jersey's business community. None of the big business associations -- among them the New Jersey State Chamber of Commerce, the New Jersey Business and Industry Association, and the Paramus-based Commerce and Industry Association of New Jersey -- has taken a position on the ruling. "It hasn't appeared as an issue that our members want us to take up or become active in," said Jim Leonard, a lobbyist for the chamber. Harvey Edelman, CEO of Glen Rock-based Holdcom, a telephone message marketing company, said the court's ruling would have little effect on his business. Holdcom employees already can add spouses and domestic partners to their health benefit package, though at their own expense. Mark Bograd, CEO of Bograd's Furniture of Riverdale, also said he expected the ruling to have little impact on the company. With one gay employee on a staff of 35, he said he already treats all workers the same when it comes to family leave. "As an employer, you try to do what you can do ... even when it's caused us a certain amount of hardship," he said. Richard Diamond, an attorney for an Essex County law firm that specializes in gay family law, said that another reason the fallout for business from the court ruling will likely be minimal is the reluctance of some gays to acknowledge their sexual preference at work. "There is going to be a significant percentage of the gay community that will want to keep their relationship confidential, and don't want to open up about their personal lives," he said. "I do think a lot of people would not want to present that information, and not apply for those benefits." Source: northjersey.com |
