Friday, July 2, 2010

Governor's Order to Withold Pay Still Tied Up In Court

Yesterday Governor Schwarzenegger ordered State Controller John Chiang to cut pay for most state employees to federal minimum wage ($7.25/hour), until a state budget is in place. Chiang has stated he will not implement the order until courts hand down a final resolution. The 2008 case from a similar order is still working its way through the courts.

As CSUEU's June 22 statement said, Only after a final decision comes down will either CSU or the union be able to determine if this order applies directly to CSU employees.

Bargaining Ploy

Despite claiming that California law forced the state to withhold wages, Schwarzenegger exempted about 37,000 employees from the order, because the unions which represent them had agreed to wage and pension concessions. The executive director of Professional Engineers in California Government observed the governor has taken a constitutional budget issue and reduced it to a bargaining ploy.

State Controller's Statement

Excerpts from Chiang's statement about the order to reduce wages:

In the absence of the leadership needed to bring the Legislature to an agreement on his budget, the governor again resorts to political tricks. Because of the limits of the state's current payroll system, there is no way that his order can be accomplished without violating the State Constitution and the federal Fair Labor Standards Act. In short, his demands will do nothing to solve the budget deficit, but will hurt taxpayers by exposing the state to billions of dollars in penalties for those violations.


Notwithstanding necessary changes to the State's labor laws, we continue to work with the Governor on building a system capable of legally reducing wages in the manner sought by his Administration. This system modernization is slated for roll-out in 2012. If the DPA has a problem with that schedule, they should consult the steering committee, of which four of the six members are the governor's appointees, including DPA Director Debbie Endsley.


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