Marsh & McLennan Advantage Insights logo
Conversations and insights from the edge of global business
Menu Search

BRINK News is transitioning to This Moment platform on as of March 31, 2023. Read the update here.


Patchwork of U.S. Marriage Laws Costs Business $1.3 Billion Every Year

U.S. Supreme Court building

Inconsistent marriage laws cost American businesses $1.3 billion per year. This legal patchwork generates a host of administrative and compliance requirements for employers who must establish and maintain multiple benefits policies and HR-related systems that apply to same-sex couples.

Absent a national “freedom to marry” law, annual costs for the U.S. private sector will top $1.4 billion by 2018 and amount to $6.6 billion over five years, according The Cost of Inconsistency, a recent report from Marsh McLennan.

Compounding the financial burden is taxation. When the government offers benefits to same-sex couples living in states without freedom to marry, the value of these benefits generates a tax penalty for employers and employees. Normally considered a cost of doing business, the value of these benefits is treated as ordinary income for an employee in a same-sex household, triggering added payroll and income taxes.

The report doesn’t quantify the challenges businesses face when trying to recruit talent into non-freedom to marry states. But executives interviewed for the report made it clear that attracting top talent demands an equal and inclusive workplace. The report cites one Ohio-based small business owner who talked about the talent deficit this way:

We are a fast-growing tech business committed to building our business in Cleveland. It’s been hard enough to compete with New York, Chicago, or DC for talent, but now we are at a further disadvantage because Ohio doesn’t recognize the legal marriages of same sex couples. I know of cases where corporations want key employees to transfer to Ohio but they refuse because our state doesn’t recognize their marriage. This puts Ohio at a disadvantage in the fight for recruiting talent.

Cost of Competitive Policy_r1

Get ahead in a rapidly changing world. Sign up for our daily newsletter. Subscribe