California's biggest state employees union filed a lawsuit in Sacramento County Superior Court to block the part of the executive order forcing layoffs for 10,300 seasonal, contract and part-time workers. Employee unions have also filed unfair labor practice allegations against a provision temporarily trimming the pay of up to 200,000 state employees to the federal minimum wage of $6.55 an hour. Those workers would be reimbursed at the time a budget is approved.
Schwarzenegger said the layoffs and pay cuts were designed to avoid a fiscal crisis as the state remains without an approved spending plan.
California is the only state with a fiscal year starting July 1 to be without a budget.