Since 1990, the employee payment for Social Security had been 6.2 percent of an employee's salary. The federal Tax Relief Act of 2010 temporarily reduced the employee payment for Social Security from 6.2 percent to 4.2 percent for wages paid in 2011. With the rate scheduled to go back to 6.2 percent starting January 1, 2012, the State processed December payroll using the Social Security tax rate of 6.2 percent (for checks issued January 3, 2012).   

On December 23, 2011, President Obama signed a two month extension of the reduction in the employee Social Security tax rate. The continuation of the reduction to 4.2 percent was not passed in time to meet the State Controller's cut-off for December payroll. This means that state employees will see a 6.2 percent withholding for Social Security from their January 3 paychecks instead of 4.2 percent.

 While PECG has discussed the possibility of providing retroactive corrections to paychecks sooner with State Controller John Chiang, PECG has been assured that the 2 percent of salary owed from the December pay warrants will be received by employees no later than the January payroll checks issued on February 1, 2012.

Congress will consider a longer extension of the reduced employee Social Security tax rate when it returns in January 2012. PECG will continue to work with the Controller to ensure PECG members' paychecks are accurate and timely.