Controller John Chiang Refuses to Implement Pending Court Ruling on Legality –
In a letter from the Department of Personnel Administration Director Debbie Endsley, Controller Chiang is told, “Today is July 1,2010, and there is no state budget. Regrettably, we must take the steps outlined in the attached pay letter to adjust wages and salaries during this budget impasse. The six Bargaining Units with tentative agreements are not included because we are seeking and expect the Legislature to approve a continuous appropriation for these six units. We anticipate passage of a continuous appropriation for these bargaining units before the end of the month.”
As they write, “In 2008, the Department of the Personnel Administration (DPA) issued a pay letter directing the payment of wages and salaries in compliance with White v. Davis. You did not implement that pay letter. You cited your computer system as one of the reasons you could not pay minimum wage for state employees during a budget impasse. Based on your refusal, the DPA sued and won in the trial court. You appealed to the appellate court and we are waiting for a decision.”
According to published reports in the Sacramento Bee, “The minimum-wage order exempts roughly 37,000 state workers in the six bargaining units that have tentatively agreed to labor deals.”
Controller Chiang issued a terse response on Thursday stating, “I am not surprised that the Governor would issue yet another demand that we cut pay for more 250,000 state employees even while the issue of whether it is feasible to do so has not yet been resolved by the courts. I have made it clear that once the courts hand down a final resolution, I will abide by that ruling.”
“In the absence of the leadership needed to bring the Legislature to an agreement on his budget, the governor again resorts to political tricks,” he continued. “Because of the limits of the state’s current payroll system, there is no way that his order can be accomplished without violating the State Constitution and the federal Fair Labor Standards Act. In short, his demands will do nothing to solve the budget deficit, but will hurt taxpayers by exposing the state to billions of dollars in penalties for those violations.”
According to the letter from Ms. Endsley from DPA, “in June 2003, your predecessor, Steve Westly, stated that the “technical tasks involving changing pay for more than 200,000 employees can be accomplished.” Based on this statement, it appears that there is a way to implement changes to your computer system to comply with White v. Davis and the Fair Labor Standards Act (FLSA)”
She concluded the letter, “I urge you to take the necessary steps to make changes to your computer system to comply with state law. My staff is prepared to work with you to develop and implement the necessary mechanisms to comply with the California Constitution, White v. Davis, and the Fair Labor Standards Act.”
Mr. Chiang disputed this contention, “Unfortunately, the DPA also is mistaken about the position of the previous State Controller about the ability of the state payroll system to make reductions to more than 250,000 paychecks. In a letter written in July 2004, my predecessor notified legislators that his office ‘had conducted a study and concluded it is not feasible to pay some employees full salary and others minimum wage under the state’s current payroll system.’”
“Notwithstanding necessary changes to the State’s labor laws, we continue to work with the Governor on building a system capable of legally reducing wages in the manner sought by his Administration,” he continued. “This system modernization is slated for roll-out in 2012. If the DPA has a problem with that schedule, they should consult the steering committee, of which four of the six members are the governor’s appointees, including DPA Director Debbie Endsley.”
“Again, absent a final court ruling, I will continue to protect the State’s finances and pay full wages earned by state employees,” Controller Chiang concluded.
In short, while the Governor can issue the order and gain headlines he knows that minimum wage is not going to be implemented any time in the near future. It would seem like the Governor would have better things to do in terms of moving the process along.
The impact of such cuts would be devastating to a city like Davis that is reliant on state paychecks whether it for people working directly in state government or those working at the university. The impact on Davis’ economy would be enormous as it has been with the cuts and furloughs already experienced at the state level and the university.
—David M. Greenwald reporting