Metropolitan News-Enterprise


Tuesday, July 6, 2010


Page 1


C.A. Says State May Pay Minimum Wage During Budget Impasse


From Staff and Wire Service Reports


The Department of Personnel Administration has the authority to direct the controller to cut the pay of state workers to the federal minimum wage during a budget impasse, the Third District Court of Appeal ruled Friday.

The ruling, which grew out of the 2008-09 budget impasse, affirms Sacramento Superior Court Judge Timothy M. Frawley’s grant of a declaratory judgment in favor of the DPA. Controller John Chiang argued that the DPA lacks that authority, and that it had misinterpreted White v. Davis (2003) 30 Cal.4th 528 as allowing such action.

Citing Government Code Secs. 19815.2 and 19816, Justice Richard Sims III said the DPA was the proper agency to implement the pay reductions permitted by White “because the Legislature created DPA to ‘manag[e] the nonmerit aspects of the state’s personnel system’...and vested DPA with jurisdiction with respect to ‘the administration of salaries’ and ‘other personnel-related matters.’”

Chiang can seek judicial review of a DPA directive, but cannot ignore it, Sims wrote.

Controller’s Argument

The jurist also rejected the controller’s argument that workers should at least be paid the state minimum wage of $8 per hour, rather than the federal minimum of $7.25. Sims reasoned that “the state minimum wage law is part of the state law that must give way to DPA’s powers to direct the Controller regarding payment of state workers,” and that nothing in the Fair Labor Standards Act, cited by the White court as the authority requiring payment of minimum wage during an impasse, or in federal regulations “makes state minimum wages payable as a matter of federal law.”

It was not immediately clear how the ruling would affect Gov. Arnold Schwarzenegger’s order a day earlier to pay 200,000 state workers the federal minimum as the state wrestles with the current budget crisis, the Legislature having once again missed the June 15 deadline for passing the budget.

Chiang, whose office cuts state paychecks, has refused to comply with the governor’s order. Their battle has had strong political overtones, as Chiang is a Democrat with strong support from state employee and other unions and the governor is a Republican who has implemented furloughs and sought pay and benefit concessions from state employees.

Chiang’s office declined to comment on the court’s decision Friday, saying it is still reviewing the ruling.

The governor issued the order Thursday on the first day of the new fiscal year because the state remains without a budget, as lawmakers remain far apart on ways to close California’s $19 billion deficit.

Lynelle Jolley, spokeswoman for the DPA, said the ruling means the controller’s office must follow the minimum wage order.

“This underscores the fact that everyone loses when we have a budget impasse. Every day the Legislature fails to deliver a budget costs the state $50 million,” Schwarzenegger spokesman Aaron McLear said.

Workers will receive full back pay once a budget is passed. In the meantime, state employees such as Rhonda Smith say they will be hurting. They are just ending more than a year of three-day-a-month furloughs that cut their pay by 14 percent.

‘A Little Scary’

“It’s a little scary,” said Smith, 39, who joined the Department of Water Resources three weeks ago. “I’ve got bills, rent, insurance, a car. I like to have groceries at home. I don’t know what this is going to do.”

She said the believed the governor was using state workers as pawns in trying to negotiate a budget deal.

“If I wanted a minimum-wage job, I wouldn’t have gone to school and gotten the training. I would have gotten a job at Subway or some place else,” Smith said.

Representatives of several state employee unions did not immediately respond to a request for comment.

Schwarzenegger’s minimum wage order will not affect all of California’s 250,000 government employees. The 37,000 state workers represented by unions that recently negotiated new contracts with the administration will continue to receive their full pay. The contracts, including one with California Highway Patrol officers, contain pay cuts and pension reforms.

Salaried managers who are not paid on an hourly basis would see their pay cut to $455 a week. Doctors and lawyers who work for the state will not be paid at all until a budget is signed because minimum wage laws do not apply to those professions.


Copyright 2010, Metropolitan News Company