Schwarzenegger Drops State Workers to Minimum Wage State controller refuses to cut smaller checks By Kevin Spak, Newser Staff Posted Jul 2, 2010 7:27 AM CDT 27 comments Comments California Gov Arnold Schwarzenegger speaks at news conference in Los Angeles in this June 9, 2010 file photo. (AP Photo/Nick Ut) (Newser) – Arnold Schwarzenegger upped the ante in his budget standoff with the state legislature yesterday, ordering almost all state workers' pay cut to the federal minimum wage—$7.25 per hour—effective immediately. The State Controller, Democrat John Chiang, says he won’t obey that order, the LA Times reports, but the Department of Personnel Administration says he doesn’t have a choice. The last time Chiang refused to cut worker benefits, in 2008, Schwarzenegger took him to court and won. The Governator’s move isn’t quite as extreme as it sounds—though the decision is technically in effect now, most workers don’t get their checks until the end of the month. If Schwarzenegger and the legislature reach a deal before then, they’ll never actually see a dent in their wallets, and whenever a budget is signed, they'll get full back pay.