Min wage issue for state employees arises again: What would UC do?

The article below deals with the minimum wage issue for state employees. It discusses the technical issue of whether the governor – if there is no budget on July 1 – could order workers paid the min wage in what used to be the June 30 payroll. (As a budget gimmick, the June 30 payroll was moved to July 1, thus “saving” some money for fiscal 2009-10.) Further in the article is the info that the legal case that was fought out in 2008 could lead to a min wage order over the summer.
Exactly what UC would do if all state employees (which likely would not technically include UC) were ordered paid the min wage is unclear. To recap: As of July 1, 2008, there was no budget and, following earlier legal decisions, the governor ordered the controller to pay state workers the min wage until there was a budget. (They would be reimbursed once a budget was enacted.) The controller refused and a court case developed which ultimately the controller lost. He has
apparently appealed and there may be some kind of decision later this month. This issue did not arise in the summer of 2009 because technically there was a budget in place – enacted in Feb. 2009 – even though an unsustainable one that had to be revised in late July 2009. The key point is that the issue for the min wage is not whether the state has the cash to pay full wages, but only whether there is a budget in place that authorizes the payment. The odds of a budget in place by July 1, 2010 are considered as slim.
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The Buzz: State workers won’t face minimum wage in June
Published Saturday, Jun. 05, 2010 Sacramento Bee
State workers don’t have to worry that their paychecks for June will be reduced to the federal minimum wage, a Department of Finance spokesman said this week, ending speculation that a budget fix last year had given Gov. Arnold Schwarzenegger the authority to order wages withheld for this month.

But July payroll could be reduced if budget talks drag on much past June 30, the end of the current fiscal year, said department spokesman H.D. Palmer.

State workers have been wondering whether their June pay would be reduced to the federal minimum, $7.25 per hour for most employees. Budget legislation passed last year included an accounting gimmick pushing this month’s payroll to July 1, the first day of the next fiscal year.

That means, technically, that the state has no funding set aside for June payroll. Legislative consultants concluded that could have opened the door for Schwarzenegger to invoke a 2003 California Supreme Court decision that the state can’t pay employees beyond the legal minimum when there’s no money budgeted for wages.

The governor invoked that ruling when budget talks deadlocked in 2008, but state Controller John Chiang refused to withhold pay on legal and logistical grounds.
That year’s pay dispute was made moot when the Legislature passed a budget, but a lawsuit lives on: Schwarzenegger sued Chiang and won. Oral arguments will be heard June 21 in Chiang’s appeal before the 3rd District Court of Appeal in Sacramento.

Although there’s no money budgeted yet for June payroll, the administration has concluded that “individual departments still have appropriating authority through June 30,” Palmer said.

State employee unions have tried to make sure state workers get paid when budget talks stall. Their latest attempt, Assembly Bill 1699, cleared the lower chamber Thursday with 54 votes. It
now goes to the Senate.

– Jon Ortiz