BILL ANALYSIS                                                                                                                                                                                                    






          SENATE PUBLIC EMPLOYMENT & RETIREMENT    BILL NO: AB 1699
          Lou Correa, Chair             Hearing date: June 23, 2010
          AB 1699 (Hernandez)    as introduced  2/01/10FISCAL:  YES

           STATE EMPLOYEES:  SCIENTIFIC SUPERVISORS:  SALARY  
          DETERMINATIONS
           

           HISTORY  :            

              Sponsor:  Professional Engineers in California Government  
          (PECG)
                       California Association of Professional  
               Scientists (CAPS)

                         
              Prior legislation:  AB 790 of 2010 (Hernandez),
                         Senate Floor

           ASSEMBLY VOTES  :

              PER & SS             4-1       4/07/10
              Appropriations       12-5      5/28/10
              Assembly Floor       54-19     6/03/10
           
          SUMMARY  : 

          Would provide-in any year in which a budget is not enacted by  
          July 1st -a continuous appropriation to pay state employee  
          salaries and benefits for the period of time between July 1st  
          and when the budget is enacted.   URGENCY BILL  .

           This bill also  :

           1) specifies that employees shall be paid at rates  
             consistent with memoranda of understanding or the salaries  
             they were receiving in the fiscal year immediately  
             preceding the new budget year. 

           2) allows the Department of Finance to reduce the new  
             budget, once it is enacted and without further legislative  
             action, to reflect the monies already paid for employee  
             compensation under the continuous appropriation.
          Pamela Schneider
          Date:  6/15/10                                         Page 1  











           BACKGROUND AND ANALYSIS  : 
          
          1)   Existing law  :

          Provides that no state officer or employee will be deemed to  
          have a break in service or to have terminated his or her  
          employment, for any purpose, or to have incurred any change    
                  in his or her authority, status, or jurisdiction or  
          in his or her salary or other conditions of employment,  
          solely because of the failure to enact a budget act for a  
          fiscal year prior to the           beginning of that fiscal  
          year.

          The California Constitution requires the Legislature to pass  
          a budget bill by June 15 of each year for the fiscal year  
          commencing on July 1.  Under the California Constitution,  
          money           may be drawn from the Treasury only through  
          an appropriation made by law and upon a Controller's duly  
          drawn warrant.

          2)   Why is this bill necessary  ?

          In 2005, the California Supreme Court upheld an appellate  
          court decision ruling that state workers, paid by the hour  
          and who do not work overtime in a particular pay period, are  
          entitled only to the federal minimum wage (currently  
          $7.25/hour) if the State enters a new fiscal year without a  
          budget.

          In July 2008, Governor Schwarzenegger ordered state workers'  
          pay to be reduced after the Legislature failed to pass a  
          budget on time.  State Controller John Chiang refused to cut  
          paychecks that would have paid 238,000 state workers $6.55  
          per hour, which was the federal minimum wage at that time.   
          The Department of Personnel Administration took the  
          Controller to court, arguing the law compelled him to pay  
          federal minimum wage absent an on-time budget.  In a ruling  
          by the court siding with the Governor, the court stated,  
          "While state workers have the ultimate right to their full  
          wages, the law does not authorize the full pay until the  
          money is appropriated in the state budget."

          Pamela Schneider
          Date:  6/15/10                                         Page 2  










          3)   This bill  :

            a)  provides for a continuous appropriation to pay state  
            employee wages, in any year in which a budget is delayed,  
            for the period of time beginning July 1st and ending upon  
            enactment of the new budget;

            b)  specifies that wages be paid consistent with memoranda  
            of understanding, or according to the rate of pay prior to  
            the end of the previous fiscal year for non-represented  
            employees; and 

            c)  allows the Department of Finance to deduct from the new  
            budget-without further legislative action-any monies paid  
            for compensation under the continuous appropriation during  
            the time when the new budget was delayed.


           COMMENTS  :

          1)   Arguments in Support  

          According to the sponsors, CAPS and PECG:

            AB 790 is a simple bill.  It seeks to ensure that state  
            employees receive their full salary in the event a budget  
            is not passed in a timely manner.  Not doing so will  
            severely impact the ability of state employees to meet  
            their financial obligations, care for their families and  
            participate in California's economic recovery.

          2)   SUPPORT  :

               Professional Engineers in California Government (PECG),  
          Sponsor
               California Association of Professional Scientists  
          (CAPS), Sponsor
             Service Employees International Union, Local 1000 (SEIU),  
              Co-Sponsor
             American Federation of State, County, and Municipal  
              Employees, AFL-CIO
               American Federation of State, County, and Municipal  
              Employees Local 2620, AFL-CIO       (AFSCME)
          Pamela Schneider
          Date:  6/15/10                                         Page 3  










               California Association of Highway Patrolmen (CAHP)
               California Attorneys, Administrative Law Judges and  
              Hearing Officers in State Employment (CASE)
               California Correctional Peace Officers Association  
              (CCPOA)
               California Labor Federation
               California State Employees Association (CSEA)
               CDF Firefighters

          3)   OPPOSITION  :

               None to date



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          Pamela Schneider
          Date:  6/15/10                                         Page 4