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| JOB CHANGE STRATEGIES FOR GAY EMPLOYEES |
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Marcia F. Namowitz, CFPR,
MBA, CSA is a Financial Advisor with American Express Financial Advisors. Her practice is based in Syosset, NY and she can be reached
at Marcia.F.Namowitz@aexp.com
.
She provides comprehensive financial planning services and one of her
specialties is domestic partner planning. The
decision to change careers or even employers is never an easy one. In addition
to the inevitable professional challenges, a job change generally implies a
conscious decision to evaluate certain quality of life issues – benefits, work
environment, relocation, and commuting options, among others. For lesbians and
gay men in the job market, one additional and often critical decision comes into
play – how supportive is my new employer toward its gay employees? The changing work environment. While more and more companies are making a commitment
to a diverse workforce that includes lesbians and gay men, assessing a
company’s supportiveness often remains a difficult and subjective challenge.
Some companies foster a very tolerant work environment without any formal
commitment or documentation; others with extensive written policies protecting
their gay employees may not take the steps necessary to be sure their good
intentions are carried out. Human
resources professionals acknowledge that the issue remains an emerging one,
meaning that many responsible employers are still working to address the needs
of their gay employees. Interview the employer. What are some of the things lesbian and gay job
seekers should be aware of when looking to change jobs? You
should research the employer and its attitudes on diversity. Does the
company’s recruitment literature mention a commitment to a diverse workforce?
Does that commitment mention sexual orientation specifically? Does the summary
information regarding employee benefits indicate any coverage for same-sex
partners – medical insurance, bereavement leave, family leave, employee
discounts, etc.? Is there a gay employees group or network? Does the company
make charitable contributions to any community-related charities? Complete
silence on the issue sometimes can be a sign that the company has not yet
addressed it, or worse that it has and is indifferent or downright hostile. Don’t ask, don’t tell? If this is the case, your next step is a hard one,
and involves some soul-searching. Do you engage the interview process as an
openly gay person? Complex personal values enter such a decision, of course, and
this decision could have consequences both during the interview and after the
hiring process is complete. If you believe a commitment to the gay community is
important in choosing an employer, you may decide to make a stand on principle
and confront the situation head on. If, however, your economic or career
circumstances necessitate other priorities, your decision is likely to focus on
your ability to maintain privacy regarding your orientation on a long-term
basis. Income tax consequences of domestic partner benefits. If
you are hired by one of the growing number of employers that provides benefits
for its lesbian and gay employees, you have one last set of decisions to
confront – whether or not to take advantage of those benefits. By doing so,
you sometimes trigger unpleasant income tax consequences. The tax law is
structured in such a way that employee benefits are considered income unless the
law carves out a specific exclusion. For many popular employee benefits,
Congress created such exclusions and these benefits are not included in an employee’s gross income. However, when benefits such as health insurance cover an individual who is not a spouse or dependent of an employee – (under the Federal tax law) which is the case for gay couples – the exclusion is lost and the additional benefits are taxable as income. This
situation creates headaches for employers and employees alike. Since the
employer is required to report the additional benefit as income on your Form
Wage and Tax Statement (W-2), it must assign a fair market value to it.
Generally, employers treat the premium expense as the value of the benefit, and
hence as the income taxable to you. Occasionally,
though, employers choose another method, so you need to ask the benefits
department how the matter is treated where you work or
are considering working. Once
you know the amount of additional income you will be taxed on, multiply it by
your marginal income tax rate to determine the tax you will owe on the
additional income at the end of the year. This tax, in addition to any cost
passed on by the employer, is the amount the benefit will cost you. You need to
know this in order to compare the cost with other options – coverage through
your partner’s employer, through individual insurance, group coverage through
a trade or professional association, and so on. In some cases, the tax cost
erases the value of claiming the benefit from this source, and you may actually
be better off not taking advantage of it; this often can be the case where both
partners work and have health insurance through their individual employers. A
job change – even a great one – usually is a stressful event. If the
financial decisions seem like more than you can handle alone, you should consult
a qualified personal financial advisor for some help.
In addition, specific tax issues may require consultation with an
accountant and/or attorney. This
information is provided for informational purposes only. The information is
intended to be generic in nature and should not be applied or relied upon in any
particular situation without the advice of your tax, legal and/or your financial
advisor. The views expressed may not be suitable for every situation. American Express Financial Advisors Inc. Member NASD. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker-dealer.
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