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Court agrees; Schwarzenegger reduces state workers’ pay to minimum wage

A 17-month-old ruling allowing California’s Republican Governor Arnold Schwarzenegger to order state workers’ pay reduced to minimum wage in the absence of a budget was upheld by the 3rd District Court of Appeal in Sacramento on Friday. The Governor’s Department of Personnel Administration sent minimum wage instructions to the Democratic Controller, John Chiang, triggered by the failure of the California Legislature to enact a budget by Thursday’s beginning of the new fiscal year.

The Sacramento Bee states:

“With no budget in place that appropriates money for wages, the state Supreme Court has said the government must withhold what it pays employees to the least amount allowed by federal standards, $7.25 per hour for most of the state’s 240,000 workers.

The withheld money must be issued once legislators and the governor agree on a budget with a payroll appropriation.”

The three justices, Vance Raye, Arthur Scotland, and Rick Sims agreed unanimously that State Controller Chiang cannot just refuse to comply with the law or the administration’s instruction, and that if Chiang felt that withholding pay would put the state in legal peril, he should have taken it to court. Chiang says that he will do just that, and a number of labor unions will likely also raise legal challenges.

Meanwhile, several unions have entered into contract talks with the Governor. According to the Sacramento Bee:

“The threat of minimum wage has prodded several unions into contract talks with Schwarzenegger. Last month, six unions – representing doctors, Highway Patrol officers, firefighters and psychiatric technicians, equipment operators, and health and social service professionals – tentatively agreed to pacts lowering retirement benefits for new state hires and increasing what all their members will pay into their pensions.

Reducing the state’s cost for pension benefits has been a policy centerpiece for Schwarzenegger. In exchange for those concessions, he promised the six unions that they would be shielded from minimum wage.

Schwarzenegger’s Thursday pay instructions exempt the 37,000 employees covered by those tentative deals. To avoid minimum wage, however, two-thirds of the Senate and the Assembly would to pass legislation appropriating money specifically for that payroll.”

Check out the Bee article for all of the juicy details.

(Note added July 17, 2010: On Friday, a Sacramento judge denied Arnold Schwarzenegger’s request to immediately force State Controller John Chiang to pay state workers the minimum wage until a budget is approved. State workers will receive their full paychecks for at least the next two months. My question? Can John Chiang learn COBOL in two months? :-) As for the state worker who lamented that, with two kids in college, he can’t live off $7.25 an hour, I would tell him to try doing it on unemployment, like so many in the private sector.)

-Bill at

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