Appeals court upholds temporary pay cut for state workers

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California governor Arnold Schwarzenegger speaks during an Elevate America announcement March 10, 2010 in Mountain View, California.

A California Appeals court today upheld Governor Schwarzenegger’s authority to cut state workers’ pay during a budget impasse. The ruling comes one day after the governor ordered state worker pay cuts — for a second time.

When there’s no state budget to pay state workers the governor of California can reduce the pay of state workers to the federal minimum wage of $7.25 an hour. That’s the opinion of the 3rd District Court of Appeal in Sacramento.

That opinion that could end a two-year dispute between the governor and the state controller. Controller John Chiang who issues pay checks to state worker — refused to cut those wages the last time Shwarzenegger ordered a cut. That was back in 2008. Chiang’s argued the cuts would violate labor laws.

But in its written opinion the appeals court said paying most state employees the federal minimum wage during a budget impasse complies with the Fair Labor Standards Act.

Roughly 200,000 state employees could see their wages cut this month. But the cut’s only temporary. California will have to pay workers their full wages once the budget’s passed.

The state controller is considering an appeal of the ruling to the California Supreme Court.

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