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Chiang Sues To Block Governor From Cutting State Worker Pay

On Wednesday, Controller John Chiang (D) filed a lawsuit to block Gov. Arnold Schwarzenegger (R) from following through on his order to reduce hourly state employees' pay to the federal minimum wage until lawmakers implement a budget for the new fiscal year, the Sacramento Bee reports.

Two state worker unions -- Service Employees International Union 1000 and Professional Engineers in California Government -- said they would join Chiang in challenging the wage reductions (Sanders, Sacramento Bee, 7/8).


Although the new fiscal year began on July 1, state lawmakers have yet to reach an agreement on a budget plan. Last week, Schwarzenegger ordered Chiang to reduce wages to $7.25 per hour for about 200,000 state workers. Chiang said he would not comply with the order (Buchanan, San Francisco Chronicle, 7/8).

On Friday, an appeals court sided with Schwarzenegger, ruling that the governor has the authority to reduce wages without a budget in place. After the ruling, Chiang said he would file a new lawsuit to block the wage reduction.

However, the Schwarzenegger administration acted first by bringing legal action against Chiang on Tuesday.

Chiang's Lawsuit

The controller's suit, filed in Sacramento Superior Court, contends that the governor's letter calling for pay cuts is not legally sound and seeks a court order deeming it invalid. Chiang argues that he is being forced to choose between violating the governor's order and violating federal and state laws.

According to Chiang, the governor's wage reduction order neglected to:

  • Exempt workers covered by collective bargaining agreements, who only can have their pay reduced by the Legislature;
  • Consider inadequacies in the state's antiquated payroll system;
  • Explain how to pay employees whose salaries are continuously appropriated and not dependent on budget passage; and
  • Provide guidance on other unclear matters.

Chiang said he would not reduce salaries until there is a "final resolution" from the courts (Sacramento Bee, 7/8).

Legislation Would Protect State Workers' Pay

While Chiang and Schwarzenegger continue to battle over the minimum wage order, state lawmakers are considering legislation (AB 1699) that would require state employees to be paid their normal wages regardless of whether the state passes a budget on time (Rufus, San Bernardino County Sun, 7/7).

Many state workers have expressed concern about the possible effects of the lower wages. Some state employees -- such as physicians and attorneys -- would receive no pay until a budget is passed because federal law exempts them from minimum wage rules (DiMartino, Contra Costa Times, 7/7).

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