Starting Thursday, Google will increase the pay of gay workers receiving domestic partner benefits to compensate for the extra tax they pay, the New York Times reported.

Employer-provided health benefits offered to the partners of gay workers are counted as taxable income by the IRS (unless the partner is considered a dependent). The benefits are not considered taxable income for married heterosexual employees.

Google said the pay increase will be retroactive to the start of the year.

A report released in 2007 by M. V. Lee Badgett, research director at the Williams Institute, found that gay employees with partners pay, on average, $1,069 per year more in taxes than would a married employee with the same coverage.

“Collectively, unmarried couples lose $178 million per year to additional taxes,” the report says. “U.S. employers also pay a total of $57 million per year in additional payroll taxes because of this unequal tax treatment.”

Last year, Representative Jim McDermott, a Democrat from Washington, sought to address the benefits inequity. Language from his Tax Equity for Health Plan Beneficiaries Act of 2009 was included in the health reform overhaul approved by the House.

McDermott told the New York Times that the bill would “correct a longstanding injustice, end a blatant inequity in the tax code and help make health care coverage more affordable for more Americans.”

House lawmakers also approved language that would make it illegal to discriminate based on “personal characteristics” in the delivery of care, a reference that would have included sexual orientation and gender identity.

But neither provision was included in the final bill signed by President Barack Obama.

Google is not the first company to offer the extra pay, but the company's huge influence in Silicon Valley and throughout the world is expected to spur adoption by other corporations.

The International Gay & Lesbian Chamber of Commerce (IGLCC) ranked the California-based search engine giant second after IBM in offering LGBT employees the best work environment among international companies. Google debuted on the group's annual survey in 2010.