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How Illinois' Civil Union Act Will Affect the Workplace

  • March 22, 2011

The Illinois Religious Freedom Protection and Civil Union Act (“Civil Union Act”) extends state law protections and responsibilities currently afforded to married, heterosexual couples to all committed couples in Illinois, including same-sex couples, by allowing same-sex couples to enter into a civil union.  The Act will become effective on June 1, 2011.

Overview of the Act

The purpose of the new law is two-fold:

  • to “provide adequate procedures for the certification and registration of a civil union,” and 
  • to “provide persons entering into a civil union with the obligations, responsibilities, protections, and benefits afforded or recognized by the law of Illinois to spouses.”

According to the Act, a party to a civil union will enjoy the same benefits afforded to spouses, “whether they derive from statute, administrative rule, policy, common law, or any other source of civil or criminal law.”  Thus, the Act will give committed couples and their families access to nearly 650 state rights, benefits and protections.

The following are among those rights, benefits and protections:

  • Emergency medical decision-making power and hospital visitation rights;
  • State spousal benefits (including workers’ compensation and spousal pension coverage);
  • Domestic relations rights and procedure (including divorce and division of property); 
  • Adoption and parental rights; 
  • Tax benefits at the state and local level; 
  • Spousal testimonial privilege; and
  • Inheritance rights and equal estate tax treatment.
     

To Obtain a Civil Union

The procedure to obtain a civil union is similar to that for securing a marriage.  First, an application must be completed and presented to the county clerk, with any applicable fees.  After the clerk verifies that an individual is eligible for a civil union, the clerk will issue a license and a certificate for a civil union.  The license becomes effective the next day and expires after 60 days.
  
Next, the civil union must be certified by a judge, a retired judge, a county clerk in certain counties, public officials who may solemnize marriages, or an officiant in accordance with any religious denomination, Indian Nation or Tribe or Native Group.  The Civil Union Act, however, does not require a religious organization to officiate at a civil union.  Rather, each “religious body” is free to choose whether or not to solemnize or officiate a civil union.
 
All the current rules governing annulment, divorce and property division that apply to couples in marriages will apply to couples in civil unions. 

The law will acknowledge as civil unions same-sex marriages, other civil unions, or substantially similar legal relationships (except for common law marriage) that were legally entered into in another jurisdiction.  New Jersey, California, Colorado, Maryland, Oregon, Nevada, Rhode Island, Washington, Hawaii, Maine, and Wisconsin are other states that allow same-sex couples to enter into civil unions or domestic partnership-type relationships.  Marriage between same-sex couples is legal in Connecticut, Iowa, Massachusetts, New Hampshire, Vermont and the District of Columbia.

What this Means for the Workplace 

A civil union, while not a marriage, raises important considerations for employers.  While the Civil Union Act grants the full array of state rights to a committed couple, it has no impact on federal marriage law or federal marriage benefits.  The federal Defense of Marriage Act (“DOMA”) defines “marriage” as a “legal union between one man and one woman as husband and wife.”  The term “spouse” in DOMA refers to “a person of the opposite sex who is a husband or a wife.”  On the other hand, the Civil Union Act states that a “‘party to a civil union’ is to be included in any definition used in state law where the term ‘spouse,’ ‘family,’ ‘immediate family,’ ‘dependent,’ ‘next of kin’ and other terms that denote ‘spousal relationship’ are [used].” Therefore, couples that enter into a civil union will not enjoy a number of federal protections or responsibilities, including the following:

  • social security survivors’ and spousal benefits; 
  • veterans’ spousal benefits;
  • immigration rights associated with marriage;
  • spousal employment benefits;
  • the right to file joint federal tax returns;
  • exemptions from income tax on one’s partner’s health benefits; and
  • the federal exemption from inheritance tax.

Illinois is one of 22 jurisdictions that protects individuals from employment discrimination on the basis of sexual orientation.  It is important for employers to review their health and benefit plans, as well as their policies and procedures, to determine whether the new law will provide greater benefits to their employees.  An employer, for example, may not be required to offer coverage for same-sex spouses or domestic partners under the Civil Union Act if the employer’s health and benefits plan is subject to the federal Employee Retirement Income Security Act (“ERISA”).  Therefore, employers should review their ERISA plans to be sure the definition of “spouse” does not include civil union spouses (unless this is the employer’s intent).

ERISA, however, does not pre-empt state laws that regulate insurance.  Case law has interpreted this to mean that states can pass laws aimed at insurers and insurance practices.  Therefore, insurance companies may be required to offer coverage for the partners of employees who enter into a civil union in Illinois or who previously entered into a civil union in another state.  Coverage also may need to be offered to an employee’s partner’s children. 

Similarly, depending upon how literally the law is interpreted, an employer’s sick and leave policies may be caught up by the Civil Union Act.  As an example, an employer may be required to provide unpaid leave to a partner of a civil union consistent with the Illinois Family Military Leave Act, if certain members of the family, including a spouse, are called away on military duty.
 
Finally, different federal income tax rules apply to civil union spouses under certain employee benefit plans. For example, domestic partners cannot be covered by health care flexible benefit plans and health insurance premiums for domestic partners cannot be provided on a pre-tax basis. 
It is important for employers to consider how the Civil Union Act might affect terms and conditions of employment contracts or collective bargaining agreements, and state employment tax liability.
 
The application and interpretation of the Civil Union Act is uncertain and the potential reach of the new law can be broad.  Employers in Illinois should not hesitate to consult an experienced employment attorney to ensure that all company policies, benefits plans, and handbooks adhere to the Civil Union Act’s expectations.  President Barack Obama’s recent pronouncement that the federal government will no longer defend the constitutionality of DOMA adds weight to the new law.  Although no court in the 7th Circuit (which includes Illinois) has considered a challenge to the constitutionality of DOMA, DOMA was found to be unconstitutional in two cases in Massachusetts.  Inevitably, this area of the law will change, and employers should monitor developments.

IRS Circular 230 Disclosure:  We inform you that any U.S. federal tax advice contained in this communication (including any attachment) is not intended or written to be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed therein. (The foregoing disclaimer has been affixed pursuant to U.S. Treasury regulations governing tax practitioners.)

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