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William G. Dressel Jr, Executive Director - Michael J. Darcey, CAE, Asst Executive Director

Legal Q & A

 

Benefits for Domestic
Partners and the Ethics
of Voting for a Spouse



Deborah M. Kole
League Staff Attorney

Q It was my understanding of the New Jersey Domestic Partnership Act that opposite sex couples over 62 could be covered by the Act along with same sex couples. However, now I hear that pension and health benefits under the Act can only apply to same sex couples. Also, I have heard that these benefits are treated differently under the Act for tax purposes than other dependent benefits. Is this information correct?

A While opposite sex couples over 62 can become domestic partners under the New Jersey Domestic Partnership Act, only same sex domestic partners of employees covered under the State Health Benefits Program and Pension System can be covered as "dependents" under the new Act. The reason for this disparate treatment is that opposite sex domestic partners have the option of obtaining these benefits by marrying, while same sex domestic partners do not have this opportunity. Governing bodies of municipalities that wish to cover the domestic partners as dependents for health and/or pension benefits must pass a resolution including them in the definition of dependents for these purposes. Sample resolutions to be used by governing bodies have been sent by the New Jersey Division of Pensions and Benefits to Benefits Administrators in municipalities who participate in the State Benefits Programs. These sample resolutions and other information about benefits under the Domestic Partnership Act can be found online at
http://www.state.nj.us/treasury/pensions.

Keep in mind that a municipality can decide to extend either health or pension benefits or both to domestic partners of employees. Furthermore, the employer may require the employee to pay all or part of the cost of domestic partnership SHBP benefits in the same manner that they require them to pay the cost of benefits for other dependents.

One of the reasons that the sample resolutions provided by the state must be used by governing bodies is that these resolutions prepared by the state deal with the issue you mentioned about the tax treatment for benefits under the Act. For New Jersey tax purposes, these benefits will be treated like other dependent benefits. However, the federal government does not recognize domestic partnerships, and therefore, unless there is some other reason for the domestic partner to be treated as a dependent for federal tax purposes, these benefits will be taxed by the IRS. This means that the vast majority of employees receiving benefits for their domestic partners will be taxed on the imputed income from these benefits, and their employers will have to make FICA and Medicare contributions on this imputed income. The above web site contains more detailed information on this process.

 

Q We have a five member governing body. A highly-qualified member of the Board of Adjustment, with many years experience on the board and in the planning field, is up for reappointment. Her husband was recently elected to our governing body. Only two other members of the governing body, besides her husband, support her reappointment. If her husband does not participate in the vote, she will lose her position after many fine years of service and several reappointments. Since she is objectively the best qualified person for the position, can he vote for her so that the Board does not have to lose her expertise? The results of his non-participation in this vote seem unfair to the municipality.

A ccording to a recent New Jersey Appellate Division case with a similar fact pattern to the one you describe, no matter what her husband's true motivation is in supporting her for the position, it is a conflict of interest for him to participate in the vote under the "Local Government Ethics Law," and his participation would taint and invalidate the vote (Shapiro v. Mertz, A-296703T2, decided April 8, 2004). N.J.S.A. 40A:9-22.5d states: "No local government officer or employee shall act in his official capacity in any manner where he, (or) a member of his immediate family... has a direct or indirect financial or personal involvement that might reasonably be expected to impair his objectivity or independence of judgment." Furthermore, the rather narrow definition of "immediate family" under the statute specifically includes the spouse of a local government official.

The court noted that the marriage relationship between a governing body member and the individual being considered for appointment by that body could clearly be perceived by the public as impairing the member's objectivity and independent judgment in voting on the appointment. Similarly, it would be an illegal conflict of interest for the local official in your municipality to vote for his wife's appointment, no matter how qualified she might be. It may seem unfair to you, but keep in mind that, as the Court pointed out in the Shapiro case, if the governing body were unanimous in their support of this individual's appointment to the Board, her spouse's disqualification from voting would not interfere with her appointment, since the vote would be four to zero, rather than two to two.

This column is for informational purposes only, and is not intended as legal advice.


 

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