'Grossing Up': Equity or Bias?
January 29, 2010
Syracuse University may be on the cutting edge of promoting equity for its gay and lesbian employees. Some of the university's straight employees, however, say Syracuse needs to focus its limited funds on benefits for everyone -- and recognize that it can't be held responsible for the inequity of marriage laws in the United States.
The battle is over "grossing up" -- a human resources term for paying someone on top of salary levels so that the employee takes home the full salary amount. So if someone would owe $10,000 on a $50,000 salary, grossing up would mean paying that person $60,000 (plus whatever tax is needed on the extra $10,000 and so forth) so that $50,000 becomes take-home pay.
Syracuse plans to pay $1,000 each to its gay and lesbian employees who use the university's domestic partner program to provide health insurance for their partners. While health insurance benefits for employees and their spouses and children are not taxable under federal law, health insurance that an employee receives for a partner who is not a spouse recognized under state law is taxable. So even though Syracuse has tried to be equitable by offering partner benefits, the university's gay employees have pointed out that they were not really being treated the same way as married opposite-sex couples.
Syracuse isn't even fully grossing up, because $1,000 will probably not cover the extra tax that some employees pay. But the proposed benefit -- even though the money involved is likely equivalent to a rounding error in the university's $113 million benefits budget -- has become