Schwarzenegger cuts 200,000 workers' pay to minimum wage

Roughly 200,000 state workers will receive minimum wage paychecks next month under terms of an order issued Thursday by the Schwarzenegger administration.

According to a letter delivered to Controller John Chiang in late afternoon, July pay for most hourly state employees will be withheld to the minimum allowed by federal law — $7.25 an hour — and then restored once there's a budget.

Chiang, whose office cuts state paychecks, said Thursday that he won't follow the order unless a court tells him to.

The letter from the governor's Department of Personnel Administration instructs Chiang to withhold employees' pay because the state started the 2010-11 fiscal year Thursday without a budget appropriating money for payroll. Hours earlier, Gov. Arnold Schwarzenegger officially ended 17 months of furloughs for state workers.

The minimum-wage order exempts roughly 37,000 state workers in the six bargaining units that have tentatively agreed to labor deals.

The administration insists the order is a matter of law and not politics, but it puts more pressure on the remaining six unions that haven't agreed to the pension and pay concessions Schwarzenegger wants in exchange for an exclusion from minimum wage.

Read the full story on