Note: This is part of a series of posts detailing the 2009 Pennsylvania budget impasse. To see all posts in this series, click here.
Pennsylvania’s annual budget impasse (2009 edition) is well underway. Today, June 30th, is the deadline for a budget to be passed as per state law. Naturally, our legislature and governor are all too busy having a pissing match to be bothered to actually do their jobs. But they’ve all found plenty of time to spread a lot of misinformation. Despite what Governor Rendell might suggest, AFSCME’s 2008 lawsuit did not declare that state employees must not be paid. Here’s why:
Before I go any further, let me remind everyone that I am not a lawyer. What follows is merely my opinion. My assumptions are just that — assumptions. You should consult with a legal professional before making any plans.
First, here’s a link to the case. Read it yourself and come to your own conclusions. There are three points that I find very interesting:
- Pennsylvania’s Secretary of Administration asked all agency heads to categorize employees into one of four categories using her descriptions: “FLSA Covered Critical”, “FLSA Covered Non-Critical”, “FLSA Exempt” (typically “executives, employees in policy positions, attorneys, and employees in similar positions”), and “Special Funded” (whose paychecks are funded outside of normal sources). Note that the state’s own classification descriptions include the phrase “FLSA Covered”. So, Pennsylvania recognizes that its employees are covered under the FLSA.
- The union did not challenge Rendell’s authority to furlough state employees. Rather, they want to court to verify or disprove Rendell’s statement that the FLSA requires him to furlough employees. The union says that the FLSA supersedes the state constitution — remember this, as it’s important later.
- The governor counter-sued, asking the court to confirm that under the Pennsylvania constitution, he is required to furlough state employees if no funds have been appropriated for salary.
Bear with me, because it’s going to get a little hairy. The court’s decision discusses the interaction between federal law and a state’s constitution. It talks about the current judicial climate in regard to “…State sovereignty, inherent to our system of federalism…” and how past cases (such as AFSCME v Casey) might be viewed today. The court speaks at great length on their (rightful) belief that federal laws, such as the FLSA, were never intended to override the state’s constitution. If you were to stop reading the court’s decision halfway through page 11 — as, presumably, our governor has — you would be left with the mistaken impression that the court said that the FLSA does not apply to state employees because it does not override Pennsylvania’s constitution.
And this is where it goes from “hairy” to “ugly”, because that’s not what the court says at all. While the court makes it clear that the FLSA does not trump the state constitution, they quickly point out that this doesn’t really matter, because the article in question has nothing to do with the FLSA:
In any case, applying the FLSA to Pennsylvania State employees does not lead, inexorably, to the conclusion that Congress intended the FLSA to preempt Pennsylvania’s constitutional requirement that only funds in the treasury that have been appropriated by the General Assembly may be spent. The language of the FLSA does not support such a conclusion.
The court is saying that no, the FLSA does not trump Article III, Section 24 of the Pennsylvania Constitution, largely because the FLSA has nothing to do with that section of the constitution. The FLSA talks about things like minimum wage, overtime requirements, and recordkeeping. And by way of court cases, it also talks about timely payment of wages. The referenced section of the PA Constitution talks about where the money needs to come from:
No money shall be paid out of the treasury, except on appropriations made by law and on warrant issued by the proper officers; but cash refunds of taxes, licenses, fees and other charges paid or collected, but not legally due, may be paid, as provided by law, without appropriation from the fund into which they were paid on warrant of the proper officer.
To put it another way, the FLSA says “I don’t care where the money comes from; you must pay your employees, and you must pay them on time.” The PA Constitution says nothing about on-time payment or even required payment, but says “The money must first be appropriated”. Put simply, the constitution talks about where the money comes from, and the FLSA tells you what to do with that money. The two laws do not overlap, and this is the opinion held by the court:
Assuming that the FLSA requires the payment of wages on time … it does not follow that Article III, Section 24 of the Constitution has been nullified with respect to FLSA-covered employees. First, the FLSA does not contain any instructions to employers that lack the funds to make payroll on time. It simply increases their liability by giving employees the right to seek liquidated damages. Accordingly, there is no basis for inferring that Congress intended to countenance, let alone require, a raid upon a State treasury for monies that do not belong to any agency or public official until the day they are actually appropriated.
The court has explicitly stated that the Fair Labor Standards Act not only does not pre-empt Pennsylvania’s constitution, but one has nothing to do with the other. I tried to think of analogy for what’s going on here, and the best I can come up with — and it’s pretty weak, sorry — is that Rendell is declaring that because he signed up for a $40-a-month cell phone plan with T-Mobile, he is no longer required to pay his garbage bill. If there’s any doubt on the court’s stance, it becomes crystal clear on page 14:
This Court concludes that there exists no conflict between the FLSA and Article III, Section 24; the two provisions address different concerns. In sum, the Court holds that the FLSA does not preempt Article III, Section 24 of the Pennsylvania Constitution.
This case is being twisted and turned into something that it is not. The sheer volume of FUD coming from our government on this is simply disgusting.
MYTH: The court said Rendell was prohibited from paying state workers without a budget. REALITY: The court said no such thing. In fact, the court explicitly stated that the federal law called into question — the Fair Labor Standards Act — has nothing to do with a state’s budget or where payroll money comes from.
MYTH: The court ordered Rendell to require state workers to work without pay. REALITY: No way. Not even close. Read through the decision; the court specifically states that the law does not dictate how employees are to be paid (or not).
MYTH: The court said furloughs are illegal. REALITY: Again, nothing of the sort. They did not say furloughs were illegal, nor did they say they were legal. In fact, they did not address the subject at all. Courts do not offer their opinions; they answer questions.
MYTH: By giving us back pay, the state has met its obligations under the law. REALITY: False. In United States v Klinghoffer Bros. Realty Corp (285 F.2d 487, 491 (2d Cir. 1960)), the US Supreme Court stated that even after overdue wages were paid, an employer is still liable for damages.
MYTH: The court said that the FLSA does not supersede the PA Constitution. Therefore, the FLSA does not apply to state employees. REALITY: The first part is true, but misleading. The court said that the FLSA does not supersede a specific part of the state constitution because it does not cover the same subject matter. The FLSA talks about on-time payments, minimum wage, and overtime, while that section of the state constitution talks about where the money must come from. The second part is completely false. Numerous court cases have upheld that the FLSA does cover government employees (Garcia v San Antonio Transit Authority, 469 U.S. 528 (1985) is one of the best-known).
MYTH: AFSCME is protecting my interests. REALITY: If they are, they’ve done a pretty terrible job of it. Don’t get me started on the “You don’t have to be a member, but you have to pay dues” mentality and how it correlates with AFSCME’s deafening silence on this issue.
In short, contrary to what you might be hearing from Governor Rendell, the court case was a massive victory for state employees. The court has held that the FLSA and the Pennsylvania Constitution do not conflict because they cover two different areas. The FLSA doesn’t care where an employer gets their payroll money from, and that section of the Pennsylvania Constitution doesn’t care what happens with that money after it gets appropriated.
Governor Rendell argues that because the state constitution requires employees to be paid with appropriated funds, and because the funds have not yet been appropriated, then the FLSA can not possibly apply. After all, how can you pay employees with money you don’t have?
The answer is simple: That’s the employer’s problem, not the employees’.
I urge every state taxpayer — state employee or otherwise — to read through the decision. It’s in plain English and very easy to follow.