December 19, 2008
Dear State Worker,
Our state's fiscal crisis has worsened dramatically in the past few weeks without legislative action to address our budget crisis. We face an approximately $15 billion General Fund deficit this fiscal year, and that number is estimated to grow to $42 billion over the next 18 months. Without immediate action, the state will not have enough cash to meet its obligations starting in February.
Californians can be proud of the services you provide day in and day out, and I appreciate your dedication and work. But it is imperative that state government look inside itself and be part of the solution. We simply have no other choice. The emergency steps I am announcing will require sacrifices from everyone, including those in my own office. As difficult as these measures are, I know you will maintain your high standards of public service.
Please bear in mind that the actions outlined below are just part of a larger response we're initiating to address the state's imminent cash and budget crisis. I have made many difficult proposals to cut government services and raise revenues to resolve our financial problems beyond those impacting state workers. I am now compelled to take the following steps beginning next year:
Furloughs: Beginning February 1, 2009, and lasting through June 30, 2010, rank-and-file employees will be furloughed two days per month. For employees who are not part of a bargaining unit (i.e., exempt appointees, career executive assignment employees, supervisors and managers), we will implement an equivalent furlough or salary reduction plan effective February 1, 2009. We intend to implement these measures in a way that does not affect your retirement.
Layoffs: I have instructed the Department of Personnel Administration to work with state agencies to initiate layoffs, reductions and other efficiencies to achieve General Fund savings of up to 10 percent starting February 1, 2009. This is in addition to reductions that I have already ordered for the current fiscal year. Employees in General Fund positions in the bottom 20 percent of seniority will receive "surplus" notices within the next month. Employees who receive these notices will not necessarily be laid off, and they will have hiring preference for non-General Fund positions for which they qualify.
Furloughs and the issuance of surplus notices are intended to minimize the impacts of layoffs to be phased in next year. I regret having to take these steps, but I wanted you to hear directly from me about them so you know what to expect.
The nation's economy has left many families vulnerable and worried. The last thing we wanted was to compound these worries for our own employees. Nevertheless, we have an obligation to the people we serve to make whatever sacrifices are necessary to maintain essential services and programs.
Established in 1959, the Governor's Medal of Valor is the highest honor California bestows on its public servants. Since the program began 545 medals have been awarded to State employees.
In a public ceremony every December, the Governor awards the Medal of Valor to those State employees whose extraordinary acts of bravery and heroism saved human lives.
The Governor's Tree Lighting Ceremony takes place after the awards ceremony.
For an act of heroism by a State employee extending above and beyond the normal call of duty or service performed at personal risk to his or her safety to save human life or State property.
For an extraordinary act of heroism by a State employee extending far above and beyond the normal call of duty or service, performed at great risk to his or her own life in an effort to save human life.
November 6, 2008
Dear Valued State Worker,
During the six weeks since I signed our state budget, the mortgage crisis has deepened, unemployment has increased and the stock market has dropped significantly. As a result, we are facing a projected $11 billion revenue shortfall this fiscal year.
These dramatic developments require us to work together and respond immediately. I have called the Legislature into special session to address our fiscal emergency, and I am proposing a combination of economic stimulus measures, programs to keep Californians in their homes, revenue increases and spending reductions to address the real, immediate financial problems facing the state.
If approved by the Legislature, these spending reductions will impact our state workers. Californians rely on you to deliver important services every day, and I am proud of your hard work and dedication to the state. That's why I want you to hear about these impacts from me directly.
To achieve cost savings and protect vital state services, I am proposing the following measures:
Furloughs: All state employees will be furloughed one day each month for the next year and half, a total of 19 days. This will result in a pay cut of about 5 percent. The pay cut will not affect retirement and other benefits for which you are eligible.
Holidays: The Columbus Day holiday will be eliminated, and Lincoln's Birthday and Washington's Birthday will be observed together on Presidents Day. In addition, we will no longer pay time-and-a-half to employees working on holidays. Instead, employees required to work on holidays will receive holiday credit for use at another time, as they do now.
Four-day week: The law will be amended to make it easier for departments to allow employees to work ten hours a day, four days a week.
Overtime: The state will no longer count leave time (including sick leave and vacation time) as time worked for overtime purposes. Instead, employees will only become eligible for overtime pay once actual time worked exceeds the required threshold.
These changes will save the state roughly $1.4 billion over two years. I know these are not easy proposals, and I assure you we are working closely with union leadership to achieve results in the least painful way possible. All the actions we're proposing must first be approved by the Legislature.
I've always said that California has the most talented and most diligent state employees, and I am confident we will make it through this tough time by working together. Thank you for your cooperation and hard work on behalf of the State of California.
On July 31, 2008, the Governor issued an Executive Order terminating the services of many temporary state employees. The Order also directs DPA and the Department of Finance to work with the State Controller to comply with a California Supreme Court ruling to pay minimum wage to certain state employees in the absence of a budget.
Governor's Press Release
Governor's Executive Order
The actions described below in no way reflect your value to the State and the importance of the work you do. We greatly appreciate your public service and sincerely regret that budget circumstances and legal requirements compel us to take these steps.
Until there's a State budget in place, most employees are subject to a California Supreme Court ruling that was issued in May 2003 (called "White v Davis"). That ruling said without a budget, the State cannot issue paychecks except to comply with minimum wage and overtime protections under federal law (Fair Labor Standards Act, or FLSA).
The Governor's executive order directs DPA and the Dept. of Finance to work with the State Controller to implement that court ruling. Therefore, DPA has authorized payments to State employees consistent with federal labor law as follows:
$6.55/hour for employees eligible for overtime
$455/week for employees ineligible for overtime (most supervisors and managers)
No pay for employees who the FLSA exempts from any minimum salary requirement based on their occupation (mainly attorneys and doctors).
These payments would be effective with paychecks issued at the end of August. Following enactment of a State budget, employees will receive all back pay due.
DPA's pay letter contains a list of 14 departments and offices (Attachment A) where all employees eligible for overtime would be authorized to receive normal paychecks for the August pay period, regardless of whether they actually work overtime. Agency secretaries may identify additional exemptions based on a review of operational needs and the exemption criteria described in the executive order (relating to public health and safety, emergency response, and revenue generation).
Departments may not authorize overtime, or hire or transfer employees, except under the same limited exceptions that apply to the executive order's overtime prohibition.
If you're a temporary State employee, you may have received a notice from your Personnel Office terminating your services. In the case of "permanent-intermittent" employees who received such a notice, your work schedule will be suspended until further notice. You should talk with your personnel office if you have questions about your employment status.
In the past, many credit unions and banks have offered special assistance to State employees whose paychecks were affected by delays in passing a budget. This year, the following institutions have indicated they would make such assistance available to members:
We encourage you to contact your own financial institution for details on their assistance programs.
The Employee Assistance Program (EAP) offers financial counseling, as well as counseling on a range of other issues, if you would like to take advantage of this benefit. Contact your personnel office for details, review
DPA's EAP web page.
Each employee's situation is different, so you should contact the
Employment Development Department directly regarding your eligibility for unemployment benefits. In general, eligibility depends on such factors as prior work, earnings, and the current reason for unemployment.
Savings Plus contributions: SPP contributions will not be credited to your account for any month that your paycheck is delayed or reduced to minimum wage. Once the budget is signed and paychecks are issued for your missed pay, SPP contributions will be deducted from those paychecks and credited to your account, effective on the date your paycheck is issued.
Service credit: A delay in your normal paycheck does not affect retirement, sick leave, vacation, etc. You continue to accrue your normal service credit.
Health, dental and vision benefits: You will continue to be covered by the same health, dental and vision benefits regardless of your paycheck status.
Mortgage/other loan payments: If your payments are normally paid via paycheck deduction you should discuss the situation directly with your lender. (This does not apply to automatic payments from your own bank account.) Keep in mind that once there's a budget and your paycheck is issued, including missed pay, your normal deductions will be made retroactively. This could result in duplicate loan payments unless you make special arrangements with your lender.
August 5, 2008
The Honorable John Chiang
California State Controller
300 Capitol Mall, Suite 1850
Sacramento, California 95814
Dear Mr. Chiang,
The California Supreme Court held in White v. Davis that in the absence of an approved state budget, the Controller has no legal authority to issue warrants against the State Treasury for employee salaries except as required by federal labor law.
As the Director of the Department of Personnel Administration (DPA), I am charged by state law with the duty to administer and enforce laws pertaining to state employee compensation. In accord with White v. Davis and with my obligations under federal and state law, I am providing you with the attached pay letter concerning the payment of wages.
In general, the attached pay letter authorizes the following wage payments during a budget impasse:
(1) Pay all non-exempt (Workweek Group II) state employees the federal minimum wage of $6.55 per hour.
(2) Pay all Executive, Administrative and Professional (EAP) (Workweek Group E) employees $455.00 per week. This amount represents the minimum salary required by the FLSA in order preserve the EAP exemption.
(3) Delay payment of all wages to employees covered by the Code of Federal Regulation sections 541.303 and 541.304 (Workweek Group SE). These employees are exempt from the salary basis test and are not subject to any minimum salary requirements and therefore will not receive any compensation until after adoption of a state budget.
(4) Continue to delay payment of wages to employees who are not covered by the FLSA including elected officials, appointees of elected officials and their personal and legal staffs, until after adoption of a state budget.
With regard to (1) above, the attached pay letter includes a list of departments and programs not subject to the overtime prohibition in the Executive Order due to the critical nature of the work performed by these departments and programs. For these departments and programs, there is a reasonable expectation that the non-exempt state employees will work overtime. Therefore, the pay letters are excluding these departments and programs.
The Director of the Department of Finance and I are prepared to work with you to develop and implement the necessary mechanisms to comply with White v. Davis and the FLSA. My office will be contacting your office shortly to schedule a meeting with appropriate staff.
Dave A. Gilb
cc: Bill Curtis, Chief Counsel, Department of Personnel Administration
Mike Genest, Director, Department of Finance
Dan Dunmoyer, Cabinet Secretary, Governor's Office
Andrea Hoch, Legal Affairs Secretary, Governor's Office
This salary payment is effective July 31, 2008 and will remain in effect until a budget is passed and certified.
05-08-2008: DPA releases revised State Restriction of Appointments manual
Public meetings were held on the following dates at 11:00 a.m. in Conference Room A/B at the Department of Personnel Administration, 1515 S Street, North Building, Suite 400, Sacramento, California 95811-7258. These meetings were required by Section 3523 of the Ralph C. Dills Act, which governs collective bargaining for California state civil service employees. For information on proposals made or received at the meetings, see
initial bargaining proposals in 2008.
Thursday, March 20, 2008
Thursday, April 3, 2008
Thursday, April 17, 2008
Thursday, May 1, 2008
Thursday, May 22, 2008
Thursday, June 5, 2008