Unemployment Benefits, Payroll Tax Cut Extended Through 2012

Last December, HRWatchdog reported that the federal government approved the extension of emergency federal unemployment benefits and a payroll tax cut into the first two months of 2012. Those extensions were set to expire at the end of this month.

Congress has now approved extending the emergency unemployment benefits and the payroll tax cut through December 2012. Federal lawmakers passed the Middle Class Tax Relief and Job Creation Act of 2012, which extends a 2 percent reduction (from 6.2 percent to 4.2 percent) of the employee-paid portion of the Social Security tax. According to the White House, this amounts to about $40 per paycheck for the average family.

If the unemployment insurance extensions had expired, California's Employment Development Department estimated that about 90,000 Californians, who are among the long-term unemployed, would face a faster end to their benefits.

Today, President Obama praised the passage of the extensions. The bill has yet to reach the president’s desk, but the White House indicated that President Obama will sign the bill as soon as it does.

Gail Cecchettini Whaley, CalChamber Employment Law Editor/Staff Counsel