Overturn of DOMA, passage of ENDA good news for small businesses

Most of the news coverage has centered on the gay and transgender individuals this law will impact, and rightly so. However, one constituency that is impacted by these laws that isn’t often talked about is small businesses.

The Defense of Marriage Act, known largely by its acronym DOMA, required small employers to treat some of their employees differently than others, even if they didn’t agree with it personally. And we know from scientific opinion polling that the majority of small business owners did not, in fact, agree with this law.

Small Business Majority’s recent opinion polling found seven in 10 employers believe businesses were hurt by DOMA, which required them to treat married same-sex couples as unmarried for benefit and payroll purposes. Another two-thirds oppose the fact that under the same law, if a small business elected to provide benefits to a same-sex couple, the employee must pay income taxes on their spouse’s/partner’s benefits and the employer must pay the additional payroll taxes—while businesses and their employees do not have to pay such taxes for health benefits provided for heterosexual employees’ spouses.

DOMA created inefficiencies for small businesses by forcing them to have two sets of payroll and benefit systems for heterosexual and gay or transgender employees. That took up time that could be spent running their businesses. And, small business owners oftentimes view their employees like family. Treating one employee differently from another based on their sexual orientation doesn’t sit well with entrepreneurs.

The Senate committee’s approval last week of the Employment Non-Discrimination Act—or ENDA, for all you acronym-lovers—is another piece of good news for small employers looking for laws that allow them to treat workers equally. Our job creators believe nondiscrimination laws help them attract quality employees. Six in 10 small business owners believe laws that protect against discrimination improve the business’s bottom line by helping attract the best and brightest employees.

Currently, federal law bans employment discrimination based on race, religion, sex, national origin, age and disability. It does not prohibit discrimination based on sexual orientation or gender identity. This means that, in the 33 states that don't explicitly have such a ban, people can be fired or harassed for being gay or transgender.

The vast majority of small business owners believe there should be laws prohibiting this type of discrimination. In fact, when Small Business Majority asked them if, to the best of their knowledge, it was legal or illegal to fire someone or refuse to hire someone for being gay or transgender, a striking 81 percent thought it was illegal. Merely 9 percent knew it was legal.

The fact that most small business owners believe it’s already illegal to fire or refuse to hire someone based on their sexual orientation shows what a no-brainer this should be for politicians.

The Supreme Court did right by small business owners and all Americans concerned about equality when it overturned DOMA. Now, Congress has a chance to take another step forward and instate ENDA, a law that aligns with the American Dream—that hard work, no matter who you are, begets success. 

Arensmeyer is founder and CEO of the Small Business Majority, an advocacy group run by small business owners to focus on solving the biggest problems facing small businesses today.