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