Appeals Court Upholds Minimum Wage Plan for State Employees
On Friday, Sacramento's 3rd District Court of Appeals upheld an earlier ruling allowing Gov. Arnold Schwarzenegger (R) to order federal minimum wage payments for hourly state employees in the absence of a budget, the Sacramento Bee reports (Ortiz, Sacramento Bee, 7/3).
The ruling supports the governor's decision last week to order reduced payments for state workers after California began its new fiscal year without a budget to appropriate funds for payroll. Last Thursday, Schwarzenegger instructed state Controller John Chiang (D) to decrease wages for about 200,000 state workers to $7.25 per hour (Theriault, San Jose Mercury News, 7/2).
Certain state workers, such as physicians and attorneys, will go without pay entirely because federal law exempts them from minimum wage rules (California Healthline, 7/2).
Details on Ruling
When the governor issued a similar order in 2008, Chiang refused to follow it (Lagos, San Francisco Chronicle, 7/3). Schwarzenegger then sued Chiang in Sacramento Superior Court and won. Chiang appealed the case to the 3rd District Court.
In Friday's ruling, the three-judge panel unanimously ruled that Chiang could not refuse to comply with the administration's instructions or a law that allows the government to withhold pay in the absence of a state budget (Sacramento Bee, 7/3).
New Appeals in the Works
Although Chiang has not decided whether to appeal Friday's 3rd District Court ruling, he recently announced plans to file a new lawsuit against Schwarzenegger's latest minimum wage order.
On Friday, Chiang said the new lawsuit will contend that California's antiquated payroll system would prevent the state from cutting payments to minimum wage. He also plans to argue that the order would violate state payroll laws, potentially resulting in "billions of dollars in fines and penalties."
Hallye Jordan, spokesperson for Chiang, said the controller will file the suit either in state or federal court (San Francisco Chronicle, 7/3).
State employee unions also have suggested they are prepared to file their own lawsuits against Schwarzenegger's minimum wage order (Sacramento Bee, 7/3).
If Schwarzenegger's minimum wage order continues to "survive further expected court challenges, the impact on state workers and the local economy would be devastating," a Sacramento Bee editorial states. It continues, "Through no fault of their own, the vast majority of rank-and-file state workers have become innocent pawns in an epic struggle between the governor and public employee union leaders" (Sacramento Bee, 7/4).
On Friday, Capital Public Radio's "KXJZ News" reported on the state worker payment reduction. The segment includes comments from Lynelle Jolley of the Department of Personnel Administration (Russ, "KXJZ News," Capital Public Radio, 7/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.