Schwarzenegger Can Cut State Workers’ Pay

(CN) - California Gov. Arnold Schwarzenegger can cut state workers' pay to the federal minimum wage when the budget is late, a state appeals court ruled Friday. The decision comes a day after Schwarzenegger ordered nearly 200,000 workers to be paid $7.25 until a budget is passed.

The Third District Court of Appeals ruled that the governor has "the authority to direct the controller to defer salary payments in excess of federally mandated minimum wages when appropriations for the salaries are lacking due to a budget impasse." State Controller John Chang had said he wouldn't obey Schwarzenegger's order.

"If the controller disagrees with the directive's specifics, the controller may seek judicial resolution but may not simply disregard the ... directive," the appeals court ruled.

California law requires the legislature to pass a budget by June 15 each year, but "timely passage has become the exception rather than the rule," according to the ruling.

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