By Melissa J. Anderson

It’s no wonder that so many LGBT individuals choose to remain in the closet at work – research by the HRC, Out & Equal, and the Center for Work Life Policy all show roughly half remain closeted. Many LGBT employees fear a cultural stigma or backlash from colleagues or employers, and there are no federal protections against such discrimination.

In many regions of the US, being gay can still – in 2011 – cost individuals health benefits, tax breaks, or even a job. And research shows this disparity impacts employee engagement, personal ambition, and job performance. But today many companies, which have recognized the business case for creating an open and inclusive environment, are stepping in to equalize the situation for LGBT employees.

In fact, a recent report by the Williams Institute at UCLA polled the top 50 Fortune 500 companies on the benefits extending these kinds of benefits to LGBT employees. The institute said:

“Among the top 50 Fortune 500 companies, 48 now include sexual orientation in their non-discrimination policies and 70% include gender identity. Additionally, 88% extend domestic partner benefits, including health insurance to the same-sex domestic partners of employees.”

Williams Institute Executive Director Brad Sears said, “The specific reasons why these companies felt their LGBT inclusive policies had a positive business impact went beyond improving their efforts to recruit and retain the most talented employees.”

He continued, “Companies linked these policies to improving employee morale and productivity, to meeting the needs of their diverse customers, and to sparking ideas and innovation through employees, including LGBT employees, who bring different perspectives and experiences.”

Despite these benefits, the list of companies providing financial or legal protection to LGBT employees is still small. But last month, a few more joined the growing group.

Reimbursing Partner Benefit Taxes

Because the federal government does not recognize gay marriage, LGBT couples end up paying more taxes. The New York Times explains:

“Under federal law, employer-provided health benefits for domestic partners are counted as taxable income, if the partner is not considered a dependent. On top of that, the employees cannot use pretax dollars to pay for their premiums — unlike their opposite-sex married counterparts.”

As a result, LGBT employees in domestic partnerships end up paying more for health insurance than straight employees.

In October, Bank of America, Morgan Stanley, and American Express announced they would begin covering the extra taxes that gay employees pay on health insurance for their partners.

In fact, the financial services sector has been a leading industry when it comes to reimbursement for these taxes. Other firms with a similar policy already in place include Barclays, Goldman Sachs, Credit Suisse, and BNP Paribas. The only industry with similar numbers of companies reimbursing LGBT employees for taxes on health care benefits are consulting and law.

In the tech sector, Google was the first big name to adopt the policy. Facebook, Apple, and Cisco quickly followed. And last month, both Microsoft and Yahoo announced they would do the same.

On the other hand, surprisingly, many consumer-facing industries like travel, media, or retail boasted very few companies participating. Click here for the New York Times’ running table of companies planning or considering adding this benefit for LGBT employees.


Currently the federal government provides no job protection for LGBT employees who are fired due to discrimination because of their sexual orientation. Fortunately there are many companies that have developed anti-discrimination policies of their own.

Even Wal-Mart, not a company known for its progressive stance toward talent management, has begun to recognize the challenges that LGBT employees face.

According to LGBT Weekly, Wal-Mart spokesman Phillip Keene said, “We’ve had a strong anti-discrimination policy for a long time.”

And recently, the world’s largest retailer joined those companies which include “gender identity and expression to its non-discrimination policy. While the addition seems like a small win, and the company already included sexual orientation as part of its non-discrimination policy, the coverage of transgender individuals should be seen as a strong statement, particularly coming from a company that employees people across not just in every part of the United States, but around the world.

The Human Rights Campaign’s Joe Solmonese issued the following statement:

“What matters in the workplace is how you do your job, not your gender identity or sexual orientation… As the nation’s largest private employer, Walmart shows that doing the right thing is also good for business. We urge them to continue to move forward by ensuring all of their LGBT employees receive equal benefits.”