The State Worker

Chronicling civil-service life for California state workers

March 16, 2010
Budget gimmick looks like an earlier chance to withhold pay

The Senate Appropriations Committee voted 7-3 on Monday to approve AB 790, which would establish employee payroll as a continuous appropriation. The measure now goes to floor and could come up for a vote later this week.

We've written about the bill before, but the latest Senate analysis of the measure includes an angle on state worker pay that we've considered for weeks but until now couldn't answer:

Did last year's decision to move the June 2010 payroll costs into the 2010-11 budget year move up how soon Gov. Arnold Schwarzenegger could order state worker wages withheld to the federal minimum if there's a budget delay?

Click the following link for more about how last year's budget legislation could impact state worker pay.

The answer appears to be yes. Here's why:

The law allows the state to withhold employee pay to the federal minimum in the absence of money appropriated for payroll. (Which is why AB 790 is a big deal. If payroll funds become continuously appropriated, the executive wouldn't have legal grounds to withhold pay during budget delays.)

Last year, as part of a package of budget bills aimed at closing the 2009-10 budget gap, lawmakers approved ABX4 12, which included an accounting gimmick that pushes June payroll costs into the July 1 start of following fiscal year:

Notwithstanding any other law, on and after January 1, 2010, payments to employees made through the Uniform State Payroll System for a pay period ending on June 30 of each year shall be on or after July 1, provided that employees shall, in any event, be paid promptly.

The Senate Appropriations analysis of AB 790 quotes that passage of the budget bill and then concludes:

This language appears to require that any minimum wage order would have to be implemented effective for the month of June since the funds would not be appropriated until the new budget is enacted.

In other words, it appears that Schwarzenegger could order pay for June withheld if lawmakers don't cut a budget deal by the June 15 legal deadline.

Whether the guy responsible for cutting the checks, Controller John Chiang, would go along with the order is another question entirely.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at jortiz@sacbee.com.

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