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DATED TECHNOLOGY FOILS WAGE CUTS

California's governor orders state workers' pay cut, but the computer system can't handle it.

Associated Press

SACRAMENTO, Calif. - As the Terminator, Arnold Schwarzenegger was the technology of the future, feared by humans. As governor, he's being foiled by the technology of the past.

For the second time in two years, the Republican governor has ordered most state workers' pay cut to the federal minimum wage because lawmakers missed their deadline to fix the state's $19 billion budget deficit. The Legislature's failure to act has left the state without a spending plan as the new fiscal year begins.

A state appellate court ruled in Schwarzenegger's favor Friday, but the state controller, who issues state paychecks, says he can't comply. One reason given by Controller John Chiang, a Democrat elected in 2006: The state's computer system can't handle the technological challenge of restating paychecks to the federal minimum of $7.25 an hour.

Chiang cited Friday's ruling by the 3rd District Court of Appeals, which said "unfeasibility" would excuse him from complying with Schwarzenegger's minimum wage order. He said a fix to the state's computerized payroll system won't be ready until October 2012.

Meanwhile, more than 200,000 state workers remain in limbo about the size of their July paychecks while Chiang asks the court for guidance on how to proceed. If wages are indeed cut to $7.25 an hour, employees will be reimbursed once a budget is signed.

John Harrigan, who served as a division chief for the state's payroll services from 1980 to 2006, said upgrading the system would be complicated, time-consuming and expensive. He said it could be done, but not without violating the federal Fair Labor Standards Act and substantially altering the payroll process.

"It's not something that you can take lightly and do overnight," said Harrigan, who also served as chief deputy controller from 2000 to 2002.

The state's payroll system was designed more than 60 years ago and was last revamped in 1970, said Hallye Jordan, state controller's office spokeswoman.

The state's chief information officer declined to take a position when asked whether it would be technically possible for the controller to follow the court's order. Spokesman Bill Maile said the office is ready to help the controller comply with the order if asked.

The average state employee makes $65,000 annually, according to the state Department of Personnel Administration. A cut to minimum wage would mean state workers would make the equivalent of $15,000 a year.

In its letter to the governor, the controller's office said it would take at least six months to reinstate workers' full pay once a budget is passed.

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