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Paychex
, a leading provider of payroll, human resource, and benefits
outsourcing solutions for America's small and medium-sized businesses, today
shared its insight on the potential impact to employee benefits and the
associated costs for business owners after the U.S. Supreme Court released its
opinion yesterday in United States v. Windsor, finding section 3 of the
Defense of Marriage Act, which defines marriage as the legal union between one
man and one woman as husband and wife, unconstitutional.
The Supreme Court's ruling generally applies to those states that recognize
same-sex marriage. Currently, 12 states and the District of Columbia have such
laws.
“While yesterday's news is significant from a civil rights standpoint, it is
also significant to America's businesses,” said Martin Mucci, President and
CEO of Paychex. “Anytime the Supreme Court or Congress makes major changes to
a law, there is a lot of work that happens behind the scenes to ensure the
changes are understood and implemented correctly. Our regulatory and
compliance team has been following this issue closely and is now focused on
helping business owners better understand the Court's decision so they can
take steps to react to this change in the law.”
Earlier this year, the Court heard arguments in the Windsor case, which
challenged the constitutionality of the marriage definition of the federal
Defense of Marriage Act (DOMA). Passed in 1996, DOMA defined marriage as a
union between one man and one woman, impacting federal laws including payroll
taxes, health insurance, and other employment laws such as the Family Medical
Leave Act. Now that the provision has been found unconstitutional, laws and
regulations previously impacted by DOMA will change for legally married
same-sex spouses.
Here are a few examples of the changes that will take place as a result of the
Court's finding:
* Same-sex spouses will now be eligible for pre-tax benefits such as health
insurance premiums and FSA/Sec 125 participation. Not only will this
impact the employees' taxable income, it will directly impact an
employer's tax liability, which is determined by its employees' taxable
incomes.
* Employers could see more administrative burdens as they may need to amend
benefit plan documents and payroll tax calculations.
* There could be a significant increase in leaves taken under the Family
Medical Leave Act (FMLA). FMLA provides up to 12 weeks of unpaid
job-protected leave to eligible employees to care for an immediate family
member, including a spouse.
Paychex will maintain regular communication with government agencies such as
the Internal Revenue Service as they provide further clarity on this change.
Visit the regulatory section of www.paychex.com for updates as they become
available.
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