Plus, it's going to be an incentive to many LGBT prospective employees which frankly, many of the younger generation worry about. Google has started footing the bill for a federal tax that gay and lesbian employees pay to have their domestic partners covered under their employee benefits. Straight employees with dependents covered under their benefits plans do not pay the tax.
It’s a nice gesture that not only puts gay and straight employees on equal footing but also creates an added perk that could either give Google a competitive edge over other companies competing for job candidates or prompt those other companies to follow suit. Google also is not the first to do this - but its size and the attention it generates could cause others to take note and react.
To make up for that tax, Google is “grossing up” the gay employee’s pay to offset the tax, with the increase retroactive back to the beginning of the year. Sure, it will cost the company a few bucks but nothing to cry over. A New York Times report explains further:
Under federal law, employer-provided health benefits for domestic partners are counted as taxable income, if the partner is not considered a dependent. The tax owed is based on the value of the partner’s coverage paid by the employer. On average, employees with domestic partners will pay about $1,069 more a year in taxes than a married employee with the same coverage, according to a 2007 report by M. V. Lee Badgett, director of the Williams Institute, a research group that studies sexual orientation policy issues.
Here’s an extra little twist: The pay raise will only apply to same-sex domestic partners because heterosexual domestic partners have the option of marrying into a union recognized by the federal government and therefore avoid the tax.
