All about business

A Sacramento County Superior Court judge denied the governor’s request to order State Controller John Chiang to pay many state employees the federal minimum wage, the latest in a two-year standoff.

Judge Patrick Marlette’s decision is the latest battle between Gov. Arnold Schwarzenegger and Chiang, whose office issues paychecks to 240,000-plus state workers.

About 200,000 faced earning $7.25 per hour — or $290 per week — since their bargaining units had not reached a deal with the governor last month.

The governor took the action in order to preserve cash as he and state lawmakers attempt to address a $19.1 billion shortfall for this current fiscal year. The cash-strapped state is looking at aggressive cost-cutting efforts to control spending, including possibly curbing payroll and programs statewide.

Friday furloughs ended last month, but the governor soon announced the federal minimum wage proposal in order to preserve cash.

But Chiang, a Democrat, said he would not follow the governor’s order unless the court demanded no fax pay day loan. The state 3rd District Court of Appeal found in favor of Schwarzenegger’s order, but Marlette’s ruling Friday delays the issue until July 26, with a full hearing next month.

So, state employees will likely receive their full paychecks, since checks are processed starting July 22.

State employees, many of whom lost about 15 percent of their pay with the three-day-per-month furloughs, would have been paid the federal minimum wage until a budget was passed, and then receive retroactive pay for the remainder of their salary.

Chiang has argued that the state’s computer system could not handle the minimum-wage request, and dramatically lowering pay for state employees could create legal problems for California.

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