State Controller John Chiang filed suit today in an attempt to block Gov. Arnold Schwarzenegger's order to reduce pay for most state workers to the federal minimum wage during the current budget impasse.
Chiang's suit, filed in Sacramento Superior Court, complains that he is being forced to choose between violating Schwarzenegger's order or violating various federal and state laws. Read the cross complaint here.
The controller's lawsuit follows a 3rd District Court of Appeal ruling last week that confirmed Schwarzenegger's authority to reduce pay to the federal minimum, currently $7.25 per hour.
Schwarzenegger has argued that under a 2003 California Supreme Court decision he is required, absent a state budget, to cut pay for most state workers to the minimum required under federal law.
Chiang has argued, among other things, that the state's antiquated payment system cannot reduce pay quickly and then restore it on a timely basis when a budget deal is struck.
Paul Harris, chief counsel of Service Employees International Union 1000, said in a written statement that the union would intervene in support of the controller's legal challenge.
Chiang's action was a cross complaint to a Schwarzenegger lawsuit, filed Tuesday, to force compliance with the minimum-wage order.
Aaron McLear, Schwarzenegger's spokesman, said today he had not seen the cross complaint.
McLear said Tuesday that the governor is pushing for judicial intervention because Chiang "continues to ignore court decisions."
"The courts have been clear: in the absence of a state budget or other available appropriation, the controller does not have the authority to continue paying regular salaries and wages," he said in a written statement.
Schwarzenegger's minimum-wage order would cut salaries of about 200,000 state workers until a budget is signed for the fiscal year that began July 1.
Specifically, the order would reduce hourly salaries to the federal minimum of $7.25, while pay for most managers and supervisors would be cut to $455 a week.
The order would not apply to state agencies that are subject to continuous appropriations, such as CalPERS, the state's pension system.
Schwarzenegger has provided an exemption for about 37,000 workers in six labor unions that recently reached tentative agreement on new labor contracts. Paying them full salaries, however, would require a legislative appropriation.
Chiang's suit alleges that Schwarzenegger's order to impose the federal minimum wage, communicated in a letter from the state Department of Personnel Administration, is legally deficient because it, among other things, failed to:
• Consider limitations of the state's antiquated payroll system.
• Provide guidance on how to pay employees whose salaries are continuously appropriated, thus not dependent upon passage of a budget.
• Exempt employees of the state Department of Corrections and Rehabilitation who are under the authority of a federal receiver and the U.S. District Court.
• Provide instructions on how to handle deductions such as federal income tax, state disability insurance and state retirement contributions.
• Provide a way to accurately determine which state employees have worked overtime during a particular pay period and, thus, are excluded by federal law from any such order.
Chiang's cross complaint seeks a judicial order that Schwarzenegger's minimum-pay order is not valid or binding.
Read more on The State Worker blog here.
PHOTO CREDIT: State Controller John Chiang testifies before the Senate Committee on Governmental Organization on Aug. 4, 2008, regarding the governor's executive order to lay off some state workers and also reduce their wages to minimum wage. Sacramento Bee file photo / Randy Pench
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