June 18, 2007
No. 2007-4

NEW OREGON GAY RIGHTS LAWS

Two new laws affecting gay rights in Oregon will become effective January 1, 2008: Senate Bill 2 prohibits discrimination based on sexual orientation in employment, housing, and public accommodations, and House Bill 2007 creates civil unions for same-sex couples.

Discrimination Law Amended

Senate Bill 2 makes it an unlawful employment practice to refuse to hire or to discharge an employee, or to take any adverse employment action based on sexual orientation. The bill amends the existing state employment discrimination law, adding sexual orientation as a protected category. Sexual orientation is defined to include “actual or perceived” sexual orientation and gender identity, whether or not the individual's appearance or behavior varies from that “traditionally associated with that individual’s sex at birth.”

The law allows employers to enforce valid dress codes, but states that employers must, on a case-by-case basis, provide “reasonable accommodation of an individual based on the health and safety needs of the individual.” This proviso may require employers to allow reasonable dress accommodation for transitioning transgender employees.

Discrimination resulting from a “bona fide occupational qualification reasonably necessary to the normal operation of the employer’s business” is exempted. A “bona fide church or other religious institution” is also exempted, allowing employment actions based on the church’s religious beliefs about sexual orientation as long as the employment is closely related to the primary purpose of the church.

Domestic Partnership Law

House Bill 2007 extends the privileges, immunities, and rights granted by law to married people to people who obtain a same-sex civil union. The law does not specifically require employers to extend state-governed benefits to domestic partners in a civil union, but it is important to note that other states with similar laws have passed administrative regulations requiring coverage. Additionally, the Oregon Bureau of Labor and Industries already interprets the Oregon Family Leave Act as extending benefits to “same-sex domestic partners,” so similar administrative regulations for other programs may not be long in coming.

Impact on Retirement and Health Plans Governed by Federal Law

The federal Defense of Marriage Act adopted in 1996 (“DOMA”) defines marriage as between only a husband and wife, and provides that no state is required to recognize a same-sex marriage license issued in another state. Since retirement and health plans are predominately regulated by federal law, those plans are not required to offer spousal benefits to same-sex couples (whether their civil union is legitimized in Oregon or another state). However, an employer may voluntarily provide benefits to same-sex couples.

If you decide to offer health or retirement benefits to same-sex couples, you should be aware that the tax treatment of those benefits will be different for same-sex couples (or other unmarried couples) because the federal tax code does not recognize the couples as “married.” For example, health benefits provided to a same-sex spouse would be taxable to the employee. Care should also be taken to ensure that the provisions of any federally-governed plans related to same-sex domestic partners do not violate the federal tax code or the Employee Retirement Income Security Act (ERISA). Before deciding to offer ERISA-covered benefits to same-sex couples, it is essential to contact your insurance carrier or benefits provider to ascertain what options are available in your particular situation to ensure the tax-exempt status of the plan and avoid creating liability for your organization or the participant.

Our advice:

• Do not ask any questions on an employment application or in an interview that would elicit information about an individual’s sexual orientation.

• Apply policies consistently as to all employees, regardless of sexual orientation or gender identity issues.

• To prevent discriminatory acts in the workplace, educate employees and supervisors that discrimination based on sexual orientation is forbidden. Remember that the definition of “sexual orientation” also includes perceived sexual orientation and gender identity.

• If you would like to offer pension, health coverage or similar benefits to same-sex domestic partners, contact your insurance carrier or benefits provider to assess available options and ensure compliance with federal law.