Some experts say California’s payroll system ‘puzzle’ doesn’t compute

For the last seven years, demands that state worker pay be reduced when California has no budget have been met with a consistent response from union-friendly state controllers: Their computer can’t do the math.

It’s an argument that has outraged Gov. Arnold Schwarzenegger, bemused computer experts and elicited the skepticism of various court judges — especially as the payroll system has adapted to other complex programming tasks, such as calculating dozens of raises for unionized employees and slashing the pay of elected officials and their appointees to zero during Sacramento’s budget crises.

Although many computer experts agree that the state’s payroll system is antiquated and would be difficult to update, they also said reprogramming it to calculate the minimum wage for more than 200,000 workers probably could have been accomplished long ago and in a matter of months.

On Friday, Sacramento County Superior Court Judge Patrick Marlette denied a Schwarzenegger request for an injunction compelling Controller John Chiang to lower state salaries while there is no budget. But he ordered the two sides back to court next month to argue the feasibility of reprogramming the computers.


State controllers, who are elected and therefore not under the governor’s control, have known that they might have to adjust the system since at least May 2003. At that time, the California Supreme Court unanimously ruled that state workers should be paid no more than the federal minimum wage during a budget impasse.

Then-Controller Steve Westly said he couldn’t immediately comply because of the decades-old computers but promised to reprogram the system by early September of that year.

The reprogramming didn’t happen, and Westly and current Controller John Chiang have both argued that technical obstacles stand in the way of imposing the minimum wage. Last week, Chiang released a report calling the task of getting the computer system to reduce pay while complying with federal labor laws an “unsolvable puzzle.”

“It can’t do math? That’s all a computer is for,” said John Thomas Flynn, who served as California’s first chief information officer in the late 1990s. Flynn, who was appointed by then-Gov. Pete Wilson, a Republican, accused the Democrat Chiang of delaying upgrades to the payroll system for political gain.


“He sat on these problems to be a hero, in my mind, to the employee unions,” Flynn said.

Labor unions spent millions to elect Chiang in 2006 and so far are among the largest contributors to his reelection bid, giving more than $350,000 to his campaign.

Koushik Sen, a computer science professor at UC Berkeley, said reprogramming such an old system could lead to unintended consequences and take months to get right. “But I think if they have experts in the system, it probably could have been done,” he said. “Seven years is a good amount of time.”

The state payroll system, which Chiang spokeswoman Hallye Jordan said was first designed more than 60 years ago and last redesigned in the 1970s — has been updated over the years to handle a wide array of changes.

There have been 49 separate pay raises granted to dozens of state employee bargaining units since the mid-'70s, said Lynelle Jolley, a spokeswoman for the state Department of Personnel Administration.

The system also has been altered to manage a long list of automatic payroll deductions, including mortgage and car payments, union dues and tax withholdings.

“They must have been updating this on a regular basis,” said UC Berkeley computer science professor Paul Hilfinger, which suggests the system is complex but also somewhat flexible.

The controller’s computer system also halts the pay of elected officials and their appointed staffs — hundreds of people — during each budget impasse, then repays the withheld wages when a budget deal is signed, noted gubernatorial spokesman Aaron McLear.


Getting the system to reduce state employees’ pay to minimum wage would not be the most challenging part, Jordan said: The trick would be getting it to comply with the federal requirement of prompt payment of overtime to employees making minimum wage.

“We want this resolved, but it’s real difficult,” she said.

Judges have sided with Schwarzenegger on the minimum wage issue before.

Last year, Sacramento County Superior Court Judge Timothy M. Frawley wrote that Chiang’s argument was “long on qualifiers and conclusions, and conspicuously short on facts.”

The judge went on to say, “Many of the Controller’s objections seem to relate to whether the [minimum wage] should be implemented, rather than whether it can be implemented.”

Chiang appealed and lost.

Last week, Chiang released a three-month study that said it would take more than two years and nearly $8.7 million to reprogram his computers for the change to minimum wage. Chiang said that would be a wasted effort because the system is due to be completely replaced by 2012.

“They did a three-month study about how hard it would be to fix?” Flynn said. “They could have solved the problem in that time. This is science, but it’s not rocket science.”