Judges split on state-worker pay in absence of balanced budget

Jeffrey Schwab

Jeffrey Schwab is a senior attorney with the Liberty Justice Center.

Jeffrey Schwab
July 19, 2015

Judges split on state-worker pay in absence of balanced budget

UPDATED JULY 19: It’s almost inevitable that the state will violate either the Fair Labor Standards Act or the Illinois Constitution

The saga of whether state employees are entitled to full pay in the absence of a budget continued on July 17 after appellate courts weighed in on orders by two different Illinois judges who came to opposite conclusions.

On July 7, Judge Diane Larsen of the Circuit Court of Cook County ruled that only state workers who are covered under the federal Fair Labor Standards Act may be paid while the state operates without a budget. She ruled these workers should be paid at the federal minimum-wage rate and receive overtime pay.

But two days later, on July 9, St. Clair County Circuit Court Judge Robert LeChien ruled that unionized employees must be paid in full accordance with their collective-bargaining agreements, and further, if separating union and non-union worker pay is not possible, all workers should be paid in full.

On July 9, the Cook County Judge’s order was appealed to the First District Court of Appeals, which initially held that Illinois Comptroller Leslie Munger should hold off on issuing paychecks to state employees. On July 13, Illinois Attorney General Lisa Madigan filed an emergency motion, appealing the St. Clair County Judge’s order, asking the Illinois Supreme Court to decide whether state employees can be paid in the absence of a budget. Meanwhile, on July 15, Illinois Comptroller Leslie Munger issued paychecks to about 6,800 state employees who regularly receive paychecks on the 15th of the month.

Two days after that, on July 17, the First District Court of Appeals voided the Cook County judge’s order preventing the comptroller from issuing full paychecks and sent the case back down to the trial judge for reconsideration because the trial court failed to consider the hardship to employees. On the same day, the Illinois Supreme Court denied Lisa Madigan’s appeal of the St. Clair County judge’s order, requiring the issue to move through the courts of appeals first.

These orders removed the conflict between the two trial court judges, giving Munger a clear path toward issuing paychecks to additional state employees in the coming weeks. However, the legal battle over whether state employees may be paid in full in the absence of a budget is far from over and the uncertainty of whether state employees are legally entitled to be paid in the absence of a budget continues.

This uncertainty arose because the Illinois General Assembly failed to pass a balanced budget, putting the state between a rock and a hard place. On one hand, under the Fair Labor Standards Act, if the state fails to pay the federal minimum wage to state workers who are covered by the act, federal fines and penalties could be assessed against the state. But on the other hand, the state would be in violation of the Illinois Constitution if it pays state workers their full salaries because the state has not appropriated funds for worker pay.

According to the comptroller, it could take up to a year to identify which employees are covered by the federal act and which are not, due to state agencies using different payroll systems, almost all of which use severely outdated technology. That means it’s almost inevitable that the state will violate either the Fair Labor Standards Act or the Illinois Constitution.

One thing is certain, however: Members of the General Assembly, who are responsible for this mess, will receive their paychecks during the budget impasse even if state workers do not. That’s because in 2014, House Speaker Mike Madigan and Senate President John Cullerton worked together to introduce and pass a law ensuring lawmaker salaries and operating expenses would be paid even if a balanced budget was not passed on time. The good news is that state Rep. David McSweeney, R-Cary, has filed a bill to change thisHouse Bill 4253 would suspend legislator pay during the budget impasse.

With state workers in limbo on whether they will get paid, it is only fair that the General Assembly feel the same impact of their actions.

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