BILL ANALYSIS
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 790
Lou Correa, Chair Hearing date: March 08, 2010
AB 790 (Hernandez) as amended 2/23/10 FISCAL: YES
STATE EMPLOYEES: SCIENTIFIC SUPERVISORS: SALARY
DETERMINATIONS
HISTORY :
Sponsors: California Association of Professional
Scientists (CAPS)
Professional Engineers in California
Government (PECG)
Prior legislation: AB 1523 (Soto) 2007
Assembly Appropriations Suspense File
AB 1125 (Hernandez) 2009
Assembly Appropriations Suspense File
ASSEMBLY VOTES :
This bill has been gutted and amended. Prior votes were not
applicable to the current version of the bill.
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.
This bill also:
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.
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
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appropriation.
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) What is the impetus for this bill ?
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."
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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.
FISCAL EFFECT :
Unquantified, however, any savings achieved by only paying
minimum wage during a budget impasse would be temporary since
unpaid wages would be paid in full upon passage of a new
budget.
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
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participate in California's economic recovery.
2) SUPPORT :
Service Employees International Union, Local 1000 (SEIU
co-sponsor)
American Federation of State, County and Municipal
Employees, AFL-CIO (AFSCME)
American Federation of State, County and Municipal
Employees, Local 2620, AFL-CIO
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 (CLF)
California State Employees Association (CSEA)
California Statewide Law Enforcement Association (CSLEA)
CDF Firefighters
Union of American Physicians and Dentists (UAPD)
3) OPPOSITION :
None to date
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