AB 205 takes its place among several other statutes enacted in recent years which have incrementally increased the rights accorded to domestic partners. Employees may use sick leave to care for a domestic partner or the child of a domestic partner; health care insurers are required to sell domestic partner coverage to employers, and unemployment benefits are extended to an employee who quits to join a domestic partner at a new location. California also included domestic partners in its paid family leave program starting July 1, 2004.

Looking ahead, SB 2, which takes effect January 1, 2006, requires employers with more than 200 employees to provide health coverage to their employees and the domestic partners of those employees. The following year, employers with between 20 and 199 employees will be obligated to meet the same conditions. (Note: Proposition 72, which will appear on the November 2004 ballot, seeks to repeal SB 2.)

Perhaps the most significant impact of AB 205 is that it effectively equates domestic partners with spouses under California law. New Family Code section 297.5 provides: "Registered domestic partners shall have the same rights, protections, and benefits, and shall be subject to the same responsibilities, obligations, and duties under law, whether they derive from statutes, administrative regulations, court rules, government policies, common law, or any other provision or sources of law, as are granted to and imposed upon spouses." Outside of the employment realm, once AB 205 takes effect, domestic partners will have virtually the same rights to custody, child support, spousal support and community property as spouses. For all intents and purposes, commencing January 1, 2005, a domestic partner and a spouse are equal.

What this means for employers, and especially public employers, is manifold, and summarized below.

Only Registered Domestic Partners Are Covered.
The first question employers will ask is: who is a domestic partner? Only domestic partners who have registered with the State of California qualify under the new law. Under Family Code §§ 297 and 298, a domestic partnership may be established by filing a notarized Declaration of Domestic Partnership with the Secretary of State. The partners must either be persons of the same sex, or members of the opposite sex if at least one of the individuals is over sixty-two years old. To obtain registered domestic partners status, the partners must also live together and fulfill certain other requirements.

Although many municipalities in California provide for domestic partnership registration, such registration alone is not sufficient to trigger the rights provided by AB 205. Employers should insure that individuals have the proper Declaration before treating them as domestic partners under the law.

Domestic Partners Will Be Covered by the Fair Employment Housing Act (FEHA) and the California Family Rights Act (CRFA).
The Legislature has expressed its intent to protect employees in domestic partnerships from discrimination in employment. The FEHA will in all likelihood protect domestic partners to the same extent as spouses, and extend the protection against "marital status" discrimination to individuals based on their "domestic partner" status. Employers will want to insure that their policies prohibiting discrimination and harassment are updated to include domestic partners, and to provide training to their employees on this new development. This is especially important given that domestic partnership is a hotly debated political issue, and employees expressing their opinion on this subject need to be mindful that discrimination based on domestic partnership status is unlawful. Employers will also want to add domestic partners to any policies which reasonably regulate spouses from working in the same department, division or facility. (Government Code section 12940(a)(3)(A)).

AB 205 also includes domestic partners within the California Family Rights Act’s family and medical leave provisions. The CFRA will now allow an employee to take family and medical leave to care for a domestic partner and the child of a domestic partner (equivalent to a stepchild under the CFRA). Again, employers will need to update their CFRA rules, policies and forms to comply with the law.

AB 205's Impact on Benefits Offered to Employees.
The new law does not explicitly require employers to extend health benefits to domestic partners. However, in all likelihood, AB 205 will be held to require that if an employer extends health benefits to spouses of employees, it must also allow coverage for domestic partners. The law clearly states that registered domestic partners are entitled to the same benefits that are granted to spouses whether those benefits derive from "statutes, administrative regulations, court rules, government policies, common law, or any other provisions or sources of law." Though there is no law requiring employers to extend health benefits to spouses, public employers that provide health benefits to employees invariably act under the auspices of a local ordinance, rule or regulation. These documents almost certainly qualify as "any other provisions or sources of law." In addition, given that domestic partners are protected from discrimination under FEHA, if an employer were to extend health benefits to spouses but not domestic partners, arguably the employer would be discriminating based on domestic partner status.

The new law is not without exceptions. For example, it does not modify eligibility for long-term care under the Public Employees’ Long Term Care Act.

AB 205 amends the California Family Code to prohibit any public agency in the state from discriminating against any person or couple based on the person being a registered domestic partner rather than a spouse. (Family Code 297.5). This provision may be interpreted to require public retirement plans to provide survivor benefits for domestic partners equal to those provided for a spouse. If this is the case, employers will need to take the necessary legal steps to amend their public retirement plans.

Any other benefits related to an employee’s marital status will also have to be extended to include domestic partners. For example, a bereavement leave policy which allows an employee time off for the death of a spouse or in-law will need to be changed to cover domestic partners as well.

How Does the New law Interact with an Employer's COBRA Responsiblities?
AB 205 expressly states that it "does not amend or modify federal laws or the benefits, protections, and responsibilities provided by those laws." (Family Code § 297.5(k)). When the Legislature passed AB 25, it explicitly stated that it did not expand an employer’s obligation to provide COBRA health coverage to domestic partners. Under the new law, however, there is some ambiguity.

Clearly, domestic partners will not be eligible for COBRA coverage under federal law unless he or she also qualifies as a dependent under Internal Revenue Code § 152. In that respect, there is no change to the status quo. Whether the domestic partner is entitled to Cal-COBRA benefits, however, is another matter.

An employee and his or her dependents may be entitled to Cal-COBRA coverage if he or she has exhausted federal COBRA coverage. Conceivably, this coveage could extend to domestic partners even if they do not meet the federal definition of "qualified beneficiaries," which is limited to the employee and his or her spouse or child. (26 CFR § 54.4980B-3). Under Family Code § 297.5(e), to the extent that California law relies on federal law in a way that results in domestic partners being treated differently than spouses, registered domestic partners are to be treated by California law as if federal law recognized domestic partners in the same manner as California law.

Thus, while domestic partners would not be eligible for benefits under federal COBRA, they would be eligible for any extension of benefits under Cal-COBRA. Nonetheless, employers should discuss this issue with their carriers to ensure compliance under the terms of their individual policies.