For the past two weeks, CAP has reported on the results of a nationwide poll of small businesses that we commissioned last month. These results show a majority of small-business owners support laws such as the Employment Non-Discrimination Act, or ENDA, which would outlaw employment discrimination against gay and transgender workers. This poll also reveals that most small-business owners already prohibit discrimination on the basis of sexual orientation and gender identity, and that the majority report zero costs associated with their inclusive nondiscrimination policies. Another finding is that many small-business owners offer equal health insurance benefits to gay employees and their families, including same-sex domestic partners, spouses, and legally adopted children. The results demonstrate that the costs associated with equal health care benefits are insignificant for most small businesses.
Of small businesses that offer health benefits to straight employees and their dependents, 51 percent also offer equivalent benefits to their gay employees and their family members. Of the remaining businesses that offer these benefits to straight employees, but do not currently offer parity in benefits to gay employees and their families, 51 percent also say that they would extend those benefits if they had an employee with a same-sex partner. This means that three out of four (76 percent) of these small businesses either currently offer or are willing to offer equal benefits to gay employees and their families.
When asked about costs, 49 percent of small-business owners that offer health insurance benefits to gay couples say there are no costs associated with offering equal benefits because nobody had actually enrolled in them. That is, around half of these small businesses offer equal benefits, but do not have a gay employee with a partner or spouse who has enrolled in those benefits. Twenty-one percent said these health benefits represented less than 1 percent of overall health expenditures. These findings comport with research findings on domestic partner benefits, which show the take-up rate for these benefits is extremely low, as are the costs themselves.
Of those small businesses that do not offer equal benefits to gay employees and their family members, only 4 percent cite costs as a deterrent to offering parity in benefits. In fact, costs were the least cited reason for not offering equal benefits. Instead, most of these small-business owners said they simply did not have employees in a same-sex partnership.
Health insurance benefits are an important component of employment compensation to all workers, but they are especially important to gay employees. In fact, offering employees health insurance benefits for their same-sex partners and other dependents is one of the most important ways a company can effectively recruit and retain qualified gay employees. Compared to 19 percent of straight workers, 43 percent of gay and lesbian workers said they would have stayed with their former employer had they offered better benefits. Similarly, another study found that 7 out of 10 workers said their benefits package was the reason they joined their company, and 8 out of 10 said their benefits package was the reason they remained with their current employer.
Offering equal benefits to gay employees and their family members—namely, health insurance benefits—gives businesses a crucial edge in recruiting the best and the brightest employees. Those that do not extend equal benefits to potential and existing employees lack a crucial low-cost tool that would otherwise give them an edge in the increasingly competitive market for talented and qualified employees. This is why most small businesses already do or would offer them to their gay employees. This is also why 57 percent of Fortune 500 companies and 83 percent of Fortune 100 companies offer health insurance benefits to same-sex domestic partners.
The results of CAP’s poll are clear. Small-business owners favor workplace fairness, both with respect to their internal nondiscrimination and benefits policies, and with respect to laws such as ENDA. They favor treating all employees equally—gay or straight, transgender or not transgender—and doing so is not a costly endeavor.
Conservatives love to claim that policies and laws that advance workplace fairness are costly to our nation’s small businesses. These claims should finally be put to rest. Small businesses have spoken, and they have spoken in favor of fairness.
Crosby Burns is Special Assistant for LGBT Progress and Jeff Krehely is Director of the LGBT Research and Communications Project.
. Small businesses were defined as businesses that employ 3 to 100 employees.
. In this column, the term “gay” is used as an umbrella term for people who identify as lesbian, gay, or bisexual.