How much could it cost?
by Grace S. Yung, CFP
As Valentine’s Day approaches, many couples tend to think more about tying the knot—and, given what the past year brought in terms of overturning DOMA, this year LGBT marriage is likely to see an increase.
Yet for some, even with the happiness of pending matrimony, there is still a pressing question in the back of some minds—and that is whether or not to come out at work once they’ve been legally married.
Sexual Orientation and the Workplace
According to NOLO, a publisher of legal information, sexual-orientation discrimination includes “being treated differently or harassed because of your real or perceived sexual orientation—whether gay, lesbian, bisexual, or heterosexual. This type of discrimination may be illegal in your workplace, depending on where you work.”
Today, there are federal laws that will protect you in the workplace from various other types of discrimination such as race, age, religion, national origin, and disability—but, although federal workers are protected from sexual-orientation discrimination, as of now, there are no such protections for those who are employed in the private sector.
At the state level, it varies. Currently, roughly half of the U.S. states have legislation that prohibits discrimination against sexual orientation in both the private and public sector. These states include California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin. (Source: NOLO)
In some states, such as Texas, legislation is drilled down to even the local level. Here, for instance, in Houston, city workers are protected from discrimination that is based on their sexual orientation or gender identity. In other jurisdictions, this isn’t the case. Therefore, it is important to be aware of exactly where you stand in terms of both your state and local legislation.
Likewise, there are many individual companies today—both large and small—that have begun to take the reins and adopt their own policies that prohibit discrimination that is based on sexual orientation. Such policies may even go so far as to terminate the employment of managers and co-workers who discriminate or exhibit conduct in other ways on this basis.
Should You or Shouldn’t You?
Every year, thousands of people come out both personally and at their place of employment. And to each individual person, it’s a big event. Certainly, when public figures come out, it tends to raise more public awareness, and in many ways it helps to generate support for the community.
When fighter Orlando Cruz came out, he broke the barrier as the first openly gay professional boxer, stating that he didn’t want to hide any of his identities. Last year, the Boston Celtic’s veteran center Jason Collins also broke a sports barrier, announcing that he was gay in a cover story for Sports Illustrated.
While in many ways, being open about your lifestyle among co-workers may be easier, that convenience comes with some definite drawbacks. Some of the key advantages and disadvantages of being out at work include:
On the plus side of being out and open at work:
• You can eliminate the need to hide your personal life or mislead your co-workers about what you do on your time off
• You can initiate friendships with co-workers outside of work
• You can build more trusting relationships with others at your workplace
• You can bring your “whole” self to work
• You are likely to be more productive.
If the company that you work for offers domestic partner benefits, there could also be several plusses to coming out at work from a financial standpoint, such as:
• Including your partner/spouse on your health and life insurance benefits. Depending on how your benefits package is set up, this could save you a great deal of money in insurance premiums and could also possibly offer tax advantages in terms of providing certain deductions for premium payments.
• You may also be able to add your partner as a surviving spouse on your retirement income benefits. This way, should you pass away first, your partner won’t be left without an income stream going forward.
Some of the drawbacks of being out may include:
• You may be excluded from projects, regardless of your qualifications and experience
• You may be passed over for raises and/or promotions
• You may be the victim of bullying
• You may be fired.
Losing your job could essentially lead to a host of other issues as well. For example, if you’re a participant in your employer’s retirement plan and you aren’t yet vested, it could mean that you will lose out on any of your employer’s matched contributions.
You could also lose out on any future performance bonuses that were tied to hitting a certain goal. This could hit you especially hard if you were already in the process of working toward a particular accomplishment for the company.
Likewise, there is also the issue of any stock options that you may have received. If these options are unvested, you may end up losing them if you are terminated.
In addition, if you are fired from your present job and you’re unable to find new employment with comparable pay, your future Social Security retirement benefits could also be impacted. Because these benefits are calculated based on an average of your 35 highest-earning years, what you earn each and every year can make a big difference in the overall calculation.
Even worse, if unable to find new employment at all over a period of time, some people turn to the funds in their 401(k) or other long-term savings plans as a source for paying their living expenses. But this is something you should only consider as an absolute last resort. Due to the taxation and penalties of the funds that come out, coupled with the fact that you will be depleting your future retirement income source, this is a no-no in all but only the most extreme cases.
Considerations Before Moving Forward
Before making a final decision to come out at work, there are several key factors to consider. First, determine whether or not your state has legislation that prohibits sexual orientation discrimination. You should also see whether your employer has a written nondiscrimination policy—and if so, does it cover sexual orientation specifically.
If you work for a larger company or corporation, find out if it is ranked on the Human Rights Campaign’s Corporate Equality Index. This Index is considered to be the national benchmark on corporate policies and practices that are pertinent to LGBT employees. If your employer is listed, find out what rating it has earned.
Should you decide to move forward with coming out, you might want to first identify an LGBT or LGBT-friendly co-worker and discuss your decision with them. He or she may even help you to make a plan for easing into your coming-out transition.
You should also find out if your employer has a diversity group. Many larger corporations such as Shell, GE, Exxon, and Chevron all offer these groups to their employees as opportunities for networking, as well as for professional development, community outreach, and in some cases even recruiting new hires.
Taking the Next Step
In the wake of last year’s DOMA decision, there are many changes taking place. This being said, regardless of whether you are in a same-sex or opposite-sex relationship, decisions such as investing, tax withholding, and how to file are all a personal choice—as is the one to come out at work.
Grace S. Yung, CFP, is a certified inancial planner practitioner with experience in helping domestic partners plan their finances since 1994. She is a principal at Midtown Financial LLC in Houston.