Judge Rejects Schwarzenegger's Minimum Wage Order

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SACRAMENTO, Calif. — A judge on Friday declined to make the state controller comply with an order by Gov. Arnold Schwarzenegger to pay state workers minimum wage while the state remains without a budget.

Sacramento County Superior Court Judge Patrick Marlette denied the administration's request for a temporary restraining order that would have forced the controller to pay the federal minimum wage immediately to about 200,000 state workers.

Marlette ruled it would cause too much harm to employees.

Deputy Controller Hallye Jordan said the decision means state workers will continue to receive their full wages in July and August.

"We were very pleased that the judge took into consideration our arguments and the impact it would have on hundreds of thousands of state employees who have worked for their checks and expect the full amount," Jordan said after the ruling.

The judge did say he will allow the administration's lawsuit to proceed so the courts can sort out whether the controller must pay minimum wage in the future. The judge indicated he would like to set a full hearing for late August.

Lynelle Jolley, a spokeswoman for Schwarzenegger's Department of Personnel Administration, said the administration is confident it will ultimately prevail in the courts.

"We also hope that the Legislature is going to pass a budget in the meantime so we aren't forced to pay our employees minimum wage," Jolley said.

Earlier this month, a state appeals court in Sacramento ruled in favor of Schwarzenegger. It said the Republican governor has the authority to order minimum wage for civil service workers because the state has not passed a budget for the current fiscal year, which started July 1.

Schwarzenegger's order would cover about 200,000 of the state's work force of 237,000, who would be paid the federal minimum of $7.25 an hour if the courts ultimately find in his favor. Salaried managers who are not paid on an hourly basis would see their pay cut to $455 a week.

If wages are cut, employees would be reimbursed after a state budget is passed and signed.

Patricia Velez, an environmental scientist at the state Department of Fish and Game, said she was relieved by the judge's ruling Friday.

"It would do a lot of harm to state scientists and to all state employees not to get paid on time," said Velez, who also is president of the California Association of Professional Scientists. "I mean we all have the same bills to pay."

The Schwarzenegger administration filed its original lawsuit in Superior Court two years ago after the governor first attempted to impose the minimum wage during a previous budget deadlock. The controller, who cuts state paychecks, has refused to comply.

State Controller John Chiang has filed a counter lawsuit, arguing he cannot make the changes. He said California's decades-old computerized payroll system is incapable of handling the pay reduction.

The system was designed more than 60 years ago and was last revamped in 1970. The latest effort to update it is expected to be implemented in 2012.

During Friday's hearing, administration attorney Chris Thomas argued the interests of taxpayers aren't being represented because the controller has refused to comply with the wage law.

"We think an injunction is critical," Thomas told the judge. "This is our only recourse for preventing what we believe will be an inevitable violation of the law."

Marlette said the harm that would be done to state workers by cutting wages outweighs the conduct of the controller.

"That's pretty dramatic, don't you think?" the judge said.

Chiang, a Democrat who has received $190,000 in union campaign contributions this year, also warned that paying the minimum wage would violate the Federal Fair Labor Standards Act. That could lead to costly fines for the state.

In a second ruling Friday, the judge denied a request by several unions to join the lawsuit on Chiang's side. They included the Service Employees International Union Local 1000 and the California Correctional Peace Officers Association.

A possible pay cut would not apply to employees covered by unions that recently reached tentative labor agreements with the Schwarzenegger administration.

State doctors and lawyers would not receive any paycheck because minimum wage laws do not apply to those professions.

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