Gov. Arnold Schwarzenegger on Thursday ordered about 200,000 state workers to be paid the federal minimum wage this month because the state Legislature has not passed a budget.
Department of Personnel Administration Director Debbie Endsley sent the order in a letter to the state controller, who refused a similar order two years ago and may try to do the same thing this time. Most state employees will be paid the federal minimum of $7.25 per hour for the July pay period.
Schwarzenegger spokesman Aaron McLear said the change should be reflected in state employees' next paycheck. Workers will be paid in full retroactively once a budget is passed.
The Legislature has failed to take steps to close California's $19 billion budget deficit, even as the new fiscal year began Thursday.
Schwarzenegger's order does not affect a little more than 30,000 workers, including California Highway Patrol officers, who are in unions that recently negotiated new contracts with the administration. Those contracts included pay cuts and pension reforms that will save the state money.
Asked whether the Republican governor was sending a message to the unions that have not yet signed new contracts, McLear said no.
"We're sending a message to the controller to follow the law," he said.
Schwarzenegger made a similar order two years ago, but it never took affect because state Controller John Chiang refused to comply. The courts later sided with Schwarzenegger, but the matter is on appeal.
Jacob Roper, deputy press secretary for the controller, said Thursday that Chiang does not intend to follow the order, in part because the state's computerized payroll system cannot handle the change.
"This is uncharted waters here," Roper said. "No city, county or state has ever taken this action before."
Roper said the action could cost the state billions of dollars because the action would violate employment law.
Salaried managers who are not paid on an hourly basis would see their pay cut to $455 per week.
