Arnie’s Next Pay Cut Plan: Kill Overtime

by Mike Hall, Aug 22, 2008

California Gov. Arnold Schwarzenegger (R) has come up with a cruel way to solve the Golden State’s budget impasse—take away the eight-hour day and cut overtime pay for private-sector workers. Those changes to basic workplace protections are part of his so-called compromise budget released this week.

His move followed the executive order he issued July 31, cutting the pay of some 200,000 state workers to the federal minimum wage of $6.55 an hour and laying off thousands of state workers. The pay cut is now in the courts and workers will receive their full August pay.

The governor’s latest proposal is part of the battle between the legislature and the governor over enacting a state budget that would close a $15.2 billion budget deficit. Schwarzenegger and his Republican allies want to make deep cuts to public service, including education, child care and public safety. Democrats want to close tax loopholes—including the tax-free yacht provision—and find new sources of revenue. The budget was due July 1, but a minority of Republicans have blocked several proposals.

Schwarzenegger’s “compromise” still calls for nearly $10 billion in cuts to services, along with a small and temporary sales tax increase. The changes in overtime pay rules were included, say political observers, to win corporate support for the plan. Says Angie Wei, California Labor Federation legislative director:

These proposals are not only unconscionable, but they make no economic sense.

At a time when working families are struggling every day to make ends meet, it is outrageous that the governor would propose taking away their basic workplace protections, and in some case, their jobs.

Currently California workers receive overtime pay when they work more than eight hours in one day. Under Schwarzenegger’s plan, if employers can convince employees to work four 10-hour shifts a week, they would not be required to pay overtime. California employers have long sought to change the daily overtime requirement.

Wei says the “stimulus” proposals are nothing but “big business giveaways.”

They do nothing to help bridge our structural budget gap and they have no place in budget negotiations. The governor should focus in bipartisan support for a balanced budget solution, rather than placating his corporate donors with worker takeaways.

Meanwhile, a Sept. 12 court hearing is set over the pay cut. State controller John Chiang, whose department writes the checks, refused to implement Schwarzenegger’s order, saying it is based on “faulty legal premises.” He also said the governor’s claim that pay cuts were needed to avert a cash crisis were not true and the state has enough on hand to pay workers through October. Schwarzenegger sued Chiang to force him to cut state workers’ pay.

Also, California unions are mobilizing public support against Schwarzenegger’s pay cut. SEIU Local 1000, a member of the California Labor Federation, has challenged the pay and job cuts in court. A hearing date has not been set.

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