Policies Requiring Government Contractors To Provide Domestic Partner Benefits Create Little Economic Burden
For Immediate Distribution
March 1, 2012
Ensuring fairness for employees with same-sex partners actually benefits governments and companies
LOS ANGELES, CA – Local ordinances that require city and county contractors to offer domestic partner benefits, such as health insurance coverage, have no adverse economic impact and offer some benefits, according to a new study from the UCLA School of Law’s Williams Institute.
“This study shows that local governments can play an important role in making sure that employees with same-sex partners have access to the same benefits enjoyed by all employees,” said Brad Sears, Williams Institute Executive Director and Roberta A. Conroy Senior Scholar of Law & Policy.
San Francisco was the first locality to enact what is known as an equal benefits ordinance (EBO) in 1996. Since then, 17 cities and counties—from Los Angeles, California, to Dane County, Wisconsin—have adopted their own statutes. The ordinances simply require that any benefits a local contractor provides to spouses of employees also be provided to domestic partners. One state, California, also requires its contractors to provide equal benefits by law.
The study evaluated data from 16 of the 17 localities with EBOs and found widespread compliance with almost no resistance from contractors, almost no enforcement costs and no other adverse effects. Localities reported that staffing burdens were minimal; only one hired a permanent, full-time staff member, and a few hired temporary or part-time staff to administer the ordinance. The localities also estimated that the EBOs resulted in little increase in contracting costs compared to their overall budgets.
“Offering domestic partner benefits is inexpensive, so it makes sense that localities estimated only minimal increases in contracting costs,” said Sears, “research shows that when companies offer domestic partner benefits to same-sex partners, health insurance costs rise less than half of one percent. Even when different-sex partners are included, the increase is still less than two and a half percent.”
The only complaint ever filed under an EBO arose in Los Angeles, where a contractor was not providing benefits, and Oakland, California is the only locality ever to terminate a contract because the contractor refused to offer benefits. A few of the early ordinances were challenged in court, but there is no record of a legal challenge since 2004.
Further, many localities required EBOs because they believed, and evidence suggests, that governments stand to gain when their contractors offer domestic partner benefits. Private businesses with inclusive policies reap economic benefits, and these benefits can be passed on when businesses contract with the government. Research also shows that having LGBT-friendly laws, like EBOs, can give states and cities an edge in attracting businesses, because they tend to draw highly-skilled and educated residents to the area.
“Many successful businesses have said that they offer domestic partner benefits for economic reasons,” said co-author Christy Mallory, Legal Fellow, Williams Institute “so it is not surprising that the localities in our study reported in almost every case that contractors were willing to offer the benefits if they did not already.”
Click here for the report page.