Governor puts 200,000 state workers on minimum wage
By Jon Ortiz
Published: Friday, Jul. 2, 2010 - 12:00 am | Page 1A
Roughly 200,000 state workers will receive minimum wage paychecks next month under terms of an order issued Thursday by the Schwarzenegger administration.
According to a letter delivered to Controller John Chiang in late afternoon, July pay for most hourly state employees will be withheld to the minimum allowed by federal law – $7.25 an hour – and then restored once there's a budget.
Chiang, whose office cuts state paychecks, said Thursday that he won't follow the order unless a court tells him to.
The letter from the governor's Department of Personnel Administration instructs Chiang to withhold employees' pay because the state started the 2010-11 fiscal year Thursday without a budget appropriating money for payroll. Hours earlier, Gov. Arnold Schwarzenegger officially ended 17 months of furloughs for state workers.
The minimum-wage order exempts roughly 37,000 state workers in the six bargaining units that have tentatively agreed to labor deals.
The administration insists the order is a matter of law and not politics, but it puts more pressure on the remaining six unions that haven't agreed to the pension and pay concessions Schwarzenegger wants in exchange for an exclusion from minimum wage.
"Regrettably, we must take the steps outlined in the attached pay letter to adjust wages and salaries during this budget impasse," Personnel Administration Director Debbie Endsley said in a letter accompanying the pay withholding instructions.
The administration declined further comment.
Chiang, who has appealed the lawsuit he lost for refusing to comply two years ago with similar instructions, called the minimum wage order "political tricks" that he will resist.
"Again, absent a final court ruling, I will continue to protect the state's finances and pay full wages earned by state employees," Chiang said in a statement Thursday evening.
Bruce Blanning, executive director of the 11,000-member Professional Engineers in California Government, slammed Schwarzenegger's order.
"It appears that the governor has taken a constitutional budget issue and reduced it to a bargaining ploy," Blanning said. "He's saying that if you're one of the six groups that have signed a contract, if you've agreed to a contract with him, then you get your salary. If you didn't, he wants you to get minimum wage."
Schwarzenegger is invoking a 2003 state Supreme Court decision as grounds for the order. The ruling in White v. Davis held that without a state budget with money appropriated for payroll, wages can be withheld to the federal minimum. Back pay would be issued once a budget is enacted.
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.
When the administration issued similar pay instructions during a 2008 budget impasse, Chiang refused to comply over concerns that doing so would violate federal law. He also asserted that the decades-old computerized payroll system couldn't handle changing pay for the 240,000 or so state workers affected by the governor's instruction.
The administration sued Chiang and eventually won in early 2009. By then a budget was in place, so the governor's order was moot.
Chiang appealed the decision. Sacramento's 3rd District Court of Appeal heard oral arguments June 21 and could issue a decision any day.
State workers such as Kathleen Jennings have felt trapped in the political, legal and labor crossfire for more than a year.
A Fairfield-based scientist with the Department of Fish and Game, Jennings has already endured furloughs that cost her the equivalent of 46 days of pay. A month of minimum-wage pay would be devastating, she said.
"I took on a second job teaching part time because I couldn't make ends meet on what I made from my state job," Jennings said. "I'm a single parent with two kids in college. Now what?"
Many state workers are likely in the same position, said Jeff Michael, director of the Business Forecasting Center at the University of the Pacific in Stockton.
"The impact of putting state workers on minimum wage for even one month would be much larger than two years ago," Michael said. "Many of them have depleted their savings or exhausted their ability to borrow and cushion themselves from even a short-run change in their income."
The impact on the Sacramento region, where roughly one in 10 wage earners works for the state, is unknown, Michael said.
"We don't have a historical precedent," he said. "But for a lot of people, this would be a massive decline that they couldn't get around by borrowing or tapping savings."
If the governor's order is implemented, some employees, such as doctors and lawyers, would get no pay because federal law exempts them from minimum wage rules. Others who don't get overtime would receive a flat $455 per week.
Read more:
http://www.sacbee.com/2010/07/02/286461 ... z0sYnY8bJp
Oh, nice they told you right before the July 4 holiday. 
