Chiang Files Papers To Support Lawsuit Over Minimum Wage Order
On Tuesday, state Controller John Chiang (D) filed papers to support his lawsuit against Gov. Arnold Schwarzenegger (R), who recently ordered Chiang to reduce hourly state employees' pay to the federal minimum wage until lawmakers implement a budget for the new fiscal year, the Sacramento Business Journal reports (Sacramento Business Journal, 7/13).
Although the new fiscal year began on July 1, state lawmakers have yet to reach an agreement on a budget plan. In response, 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, prompting the governor to bring legal action against him. Chiang then filed a suit against theÂ governor, seeking to block the minimum wage orderÂ (California Healthline, 7/8).
Chiang is supporting his lawsuit against the governor with declarations from two former payroll chiefs and two independent reports examining the feasibility of the governor's order.
The reports, compiled by accounting firm Crowe Horwath, argue that the state's payroll structure and technology make it impossible for California to comply with the federal Fair Labor Standards Act if it is forced to pay minimum wage (Sacramento Business Journal, 7/13).The reports also note that the state's payroll computer system is scheduled to be replaced by 2012. Replacing the system now would cost about $8.6 million, the accounting firm said (Central Valley Business Times, 7/13). 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.