Payroll error hits same-sex couples

An accounting error by Yale is forcing same-sex couples who work for the University to pay double in tax withholdings this year.

Same-sex married couples are recognized by the state of Connecticut, but not by the federal government — meaning their tax returns are treated differently on each level. These couples are taxed by the federal government, but not by the state government, on the amount of their partner’s health coverage, and Yale affected approximately 60 employees University-wide by failing to withhold income equal to their domestic partner’s health coverage in 2010. Now, the University is making those employees pay back the appropriate amounts by deducting the funds from their 2011 income.

A Yale employee, who spoke anonymously for fear of compromising professional relations with the University, said the University’s error — while by no means a deliberate act of discrimination by Yale — has caused anger among those impacted. It remains unclear whether the accounting error affected some or all Yale employees in same-sex marriages.

“Yale didn’t make this mistake because it didn’t value gay people, but it’s frustrating that they don’t see that it’s because of discrimination that we are going through this,” the employee said. “For them, it’s just about us giving the money back.”

The University notified employees of the error in a letter sent on Dec. 22, apologizing for the mistake and informing workers that Yale would deduct the needed amounts from January, February and March paychecks.

The letter explained that the payroll system accidentally computed 2010 benefits as non-taxable on both the state and federal levels.

“Therefore, there is an additional amount that should have been withheld from your pay for Federal, Social Security and MedicareB taxes,” the letter stated.

The average minimum withholding was approximately $1,500 and the maximum about $3,000, Vice President for Human Resources and Administration Michael Peel said in an e-mail Wednesday. The University has apologized and extended the repayment period from three months to up to a year, Peel added, and the programming error that caused the mistake has since been fixed.

Despite the University’s apology, the error has still placed same-sex couples in difficult financial situations, the employee said.

“It wasn’t like it was done maliciously, but it’s something that affects everyone who is married and is gay and gets partner benefits through their employer, which is a lot of people nationwide,” said the employee, who opened the letter on Christmas Day. “It’s not Yale’s fault … but it’s a lot of money.”

Union employees were hit first by the payroll error, the employee said, since these workers receive paychecks once every one to two weeks and have already had money withheld.

The Yale LGBTQ Affinity Group, which is open to Yale faculty, staff, and post-doctoral fellows, met on Monday to discuss the payroll situation with University officials, including Compensation and Benefits Director Hugh Penney and Payroll Operations and Development Manager Elizabeth Anderson.

Until the meeting, Yale sent no further official communications to affected workers, the employee said. The LGBTQ Affinity Group also contacted Provost Peter Salovey, who serves as the organization’s executive sponsor, to let him know they had made little progress on the issue, the employee added. Salovey deferred comment to Penney Wednesday, and Penney could not be reached for comment Wednesday night.

LGBTQ members asked the Yale officials for three things at the meeting, the employee said: an apology, additional follow-through information, and for the University to cover the federal tax on domestic partner benefits in 2011 — something the group has requested in previous years. While the University will not retroactively compensate for the 2010 tax error or cover taxes in 2011, the employee recalled that Penney said coverage for 2012 is under consideration.

Some employers cover these tax costs ­— which do not apply to heterosexual couples — for same-sex couples, although Yale does not.

Comments

  • janrn273

    Thank goodness someone is working to help us with this horrendous problem. We’re one of those with $3100 tax to be deducted over a year. I’m thankful the article pinpoints that other institutions cover these costs. I hope Yale can come forward and show their commitment to the LGBTQ community.