200k CA State Workers May Get Federal Minimum Wage

Once again, California is taking extreme measures to deal with the $19 billion budget deficit still not addressed by the state legislature. This time, Governor Arnold Schwarzenegger ordered on July 1, that almost 200,000 state workers to be paid the federal minimum wage this month. The state still does not have a budget for the next fiscal year, which also began Thursday, July 1.

Department of Personnel Administration Director Debbie Endsley sent a letter to the California State Controller ordering that affected state employees receive only $7.25 per hour for the July pay period, according to the Associated Press. Schwarzenegger spokesman Aaron McLear said the change should be reflected in state employees' next paycheck. Workers will be paid in full retroactively once a budget is passed.

Not all state employees will see the state's budget problems affect their household budgets. The AP reports almost 30,000 state employees, including California Highway Patrol officers, are in unions that recently negotiated new contracts with the administration. These employees are spared the current pay cuts because their unions agreed to pay cuts and pension reforms to save the state money.

However, the Governor's order may not be followed. The last time this was attempted, State Controller John Chiang refused to comply with the order and it was never executed. The litigation over that disagreement is still pending in California courts. This time around, Chiang says the reason he will not follow the order is because he can't.

Jacob Roper, deputy press secretary for the controller, told the AP that Mr. Chiang does not intend to follow the order, in part because the state's computerized payroll system cannot handle the change. In addition, Roper thinks the state would end up on the hook for even more money than it could possibly save, because the salary cut violates employment laws and could result in litigation.

"This all goes away if the Legislature passes a budget this month," said Lynelle Jolley, spokeswoman for the Department of Personnel Administration.

Related Resources:

• Schwarzenegger orders min wage for state workers (Associated Press)
• Schwarzenegger Orders Min Wage For State Workers (NPR)
• Budget Deficit Force LA Courtrooms to Close (FindLaw's Blotter)
• State Employees Take First Furlough Friday in California: Offices to Be Closed First & Third Fridays (FindLaw's Common Law)
• Wage and Hour FAQ (provided by Brady & Associates)
• Wage & Benefits Resources (provided by Walters & Caietti, A.P.C.)