Softening the impact of California's budget crisis -- albeit slightly -- state officials have determined that government workers will be paid the state minimum wage instead of the lower federal rate if the Legislature remains deadlocked.

State employees assumed their pay was going to be cut to the $5.15-an-hour federal minimum wage, probably beginning in late August, in compliance with a recent California Supreme Court ruling.

But state Controller Steve Westly has concluded that the law requires that employees be paid California's minimum wage of $6.75 an hour, said a spokeswoman for the controller Monday.
This brought little cheer to state workers, who are still facing a substantial pay cut.

"Six seventy-five's not even going to cover my daughter's medication for a month," said Shalia Watts, a single mother who works at the Employment Development Department in Sacramento. Her 12-year-old daughter suffers from the chronic inflammatory disease lupus and other ailments.

Even with the higher minimum of $6.75 an hour, "that cuts back the wages of state employees by an average of 71 percent -- that's a big whack," said Perry Kenny, president of the California State Employees Association.

The Supreme Court ruled in May that state workers must be paid the minimum wage if a budget wasn't in place at the start of the new fiscal year.

The year starts today, and legislators remain deadlocked on remedying a $38.2 billion deficit. The minimum-wage paychecks won't begin until late August or early September because of logistical issues, Westly has said.

The pay cuts would be temporary, lasting only until a budget is enacted. The lost wages would be repaid to workers once the budget is approved.

It wasn't clear how the confusion arose over which rate would get paid, state or federal.

"I don't know that we ever said it was federal," said Lisa Casalegno, a spokeswoman for the controller. She said the media assumed the federal minimum would apply "and ran with it."

But several California newspapers reported that the federal minimum would be used, and CSEA officials said they believed it as well.