Domestic Partner Benefits: Business Case for Employers

Introduction: Financial Stress and the Workplace

In America, nearly 50% of all marriages end in divorce (1). Many troubled couples cite financial issues as a major hindrance to the overall success of marriage. These problems are compounded further when children are factored into the mix. Not only do these conflicts hinder the relationship between domestic partners, but the resulting stress often manifests itself in the work environment. This occurs in numerous ways, including decreased productivity, negative attitudes affecting employee morale, poor customer service, and a general inability to perform necessary job functions.

Domestic partner benefits, when utilized properly, can help mitigate the natural effects of financial stress on company employees. These benefits can effectively pay for themselves through a decrease in absenteeism, higher employee morale, and increased productivity. In essence, by offering domestic partner benefits, companies are being proactive in helping couples before they encounter stressful situations that may hinder work performance.

What Are Domestic Partner Benefits?

A domestic partnership is a committed relationship between couples who are not married. In many instances, this partnership is between individuals of the same sex; however, heterosexual relationships can also be considered domestic partnerships (2). This distinction matters because domestic partnerships do not automatically receive all the benefits that a married couple would otherwise obtain, though they do carry rights regarding financial and employment benefits.

In terms of employment benefits, an employee in a domestic partnership can obtain benefits originally intended only for married couples. These include, but are not limited to, health insurance, family leave, tuition reimbursement, and more. A key distinction worth noting is that these benefits do not transfer from job to job. As such, they serve as an incentive for talented employees to remain with their employer rather than seek opportunities elsewhere.

Flexibility and Economic Considerations

Domestic partner benefits are flexible in nature. A company can define what constitutes a domestic partnership benefit — hereafter referred to as a DPB — as it chooses. This flexibility allows a company to be more stringent or more lenient in the benefits it offers, which is particularly important during periods of economic contraction when benefit expenses can adversely affect overall profits.

During periods of economic contraction, demand for consumer products typically declines. By definition, an economic contraction — otherwise known as a recession — is characterized by two consecutive quarters of negative GDP growth. Approximately 70% of the nation's GDP comes from consumer spending on goods and services, and during periods of economic pessimism, consumers reduce their spending. At the same time, benefit costs for corporations tend to rise over time. When profits decrease and employee costs increase, profitability declines. By carefully defining what constitutes a domestic partnership, corporations can hedge against these economic fluctuations and better manage their benefit obligations.