A.G. Schneiderman Secures Agreement With Thomson Reuters Corporation To Ensure Equal Treatment Of Legally Married Same-Sex Couples In Employee Benefits

Agreement Reflects Additional Enforcement Work Required Following the Supreme Court’s Decision in U.S. v. Windsor

Schneiderman: Married Same-Sex Couples Are Entitled To Equal Treatment In Employee Compensation And Benefits

NEW YORK – Attorney General Eric T. Schneiderman today announced an agreement with Thomson Reuters Corporation (Thomson) to ensure the equal treatment of married same sex couples under its employee benefit programs. Under the agreement, Thomson will ensure that no employees are owed monies as a result of any incorrect designations of spouses within its benefits systems, and will also stop making unnecessary tax calculations for the benefits the company provides to the same-sex spouses of employees.

“Marriage equality is the law in New York, but major corporations operate across a country with a patchwork of marriage laws, some of which still do not recognize the legal unions of same-sex couples,” Attorney General Schneiderman said. “Until marriage equality is the uniform law of the land, we will use every available tool to ensure equal treatment and equal justice for all couples. I commend Thomson Reuters for swiftly seeking to address concerns raised by my office.”

Prior to the U.S. Supreme Court’s decision in U.S. v. Windsor, which struck down a key provision of the federal Defense of Marriage Act, private employers were required to treat their financial contributions to the benefits of an employee’s married same-sex spouse as “imputed income” to the employee for federal tax purposes. Though this imputed income was not directly received by an employee, it was taxed like direct income. Prior to the Windsor decision, this potentially resulted in employees with same-sex spouses facing a higher tax liability. Following the decision, however, employers were no longer required to impute income to such an employee.

The Attorney General’s investigation into Thomson began in September 2014, when the Attorney General received a complaint from a Thomson employee with a same-sex spouse, who had noticed that her pay slip continued to include entries reflecting “imputed income” and had received a notification informing her that she would receive a tax refund from Thomson for “adjusted imputed income.” The investigation revealed that in August and September 2014, a number of employees made inquiries about language on their pay slips appearing to indicate that Thomson was imputing income for benefits provided to their same-sex spouses. Thomson uses a third-party administrator to manage its employee benefits plans and had instructed the administrator to make this calculation for its contributions to same-sex spousal benefits. The investigation revealed that this calculation caused confusion for employees and was not necessary to calculate for employees living in states where same-sex marriage is legal. The investigation further determined that the cause of the original employee’s complaint was an incorrect designation of her same-sex spouse as a domestic partner by Thomson’s administrator, which for a time caused that employee to face a higher tax liability than she should have.

To avoid such errors in the future, and to ensure that no additional employees are owed any refunds from the company, under the agreement Thomson commits to:

  • Instruct the administrator to cease calculating imputed income for Thomson employees married to same-sex spouses who reside in New York and all other states in which same-sex marriage is legally recognized;
  • Instruct its benefits administrator to conduct quarterly training, for all representatives servicing Thomson accounts, concerning: the legal status of same-sex spouses; how to designate same-sex spouses within its benefits systems; and the circumstances in which the administrator’s systems may impute income to a Thomson employee;
  • Direct the administrator to conduct an audit, from October 2013 to the present, to ensure that no additional refunds are owed to any employees as a result of possible incorrect designation of same-sex spouses during that period. Should Thomson discover any such refunds are owed, the company will provide refunds to its employees; and
  • Report to the Attorney General any internal complaints received by its benefits or payroll departments concerning the designation or enrollment of same-sex spouses, or their tax treatment by Thomson, for one year. 

The Attorney General’s agreement with Thomson Reuters follows upon prior enforcement work the office’s Civil Rights Bureau has conducted in the area of same-sex spousal benefits. Following the Windsor decision, the Bureau opened an inquiry into ExxonMobil Corporation concerning its failure to extend employee benefits to the same-sex spouses of its employees. This work grew out of efforts by the Office of the New York State Comptroller, which for nearly a decade had introduced resolutions at ExxonMobil’s annual shareholder meetings calling upon the company to provide benefits to employees’ same-sex spouses. In August 2013, as part of the Bureau’s inquiry, the Bureau requested documents from ExxonMobil about the provision of health benefits to same-sex spouses, and noted that the company offered at least one health plan option subject to the anti-discrimination provision of the New York State Insurance Law. In September 2013, Exxon responded to the Attorney General and Comptroller’s Office by confirming that the company would provide spousal benefits to all legally married same-sex spouses of its employees.

“Every person deserves to have their rights protected in the workplace,” said New York State Comptroller Thomas P. DiNapoli. “We’re glad to see Thomson Reuters making the right move to uphold and respect marriage equality. Our thanks to Attorney General Schneiderman for his commitment to ensuring equal rights for all.”

"We applaud Attorney General Eric T. Schneiderman for standing up on behalf of LGBT New Yorkers to ensure that Thomson Reuters remains in compliance with standard employment practices and that all married couples receive the benefits entitled to them under the law," said Empire State Pride Agenda Executive Director Nathan M. Schaefer. "We are truly grateful to have leaders like AG Schneiderman and an increasing number of businesses who value equality and advocate on behalf of our community so that no one is treated as a second class citizen."

This matter is being handled by Assistant Attorney General Justin Deabler of the Civil Rights Bureau, which is led by Bureau Chief Kristen Clarke. The Bureau is part of the Division of Social Justice, which is led by Executive Deputy Attorney General for Social Justice Alvin Bragg.

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