SUBJECT:

Employee Communication Regarding Potential State Pay Cuts

Chancellor Marye Anne Fox has requested that I forward to the campus community the letter below from President Yudof.

Thomas R. Leet Assistant Vice Chancellor - Human Resources

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July 24, 2008

Colleagues:

You may have read recently that Governor Schwarzenegger is considering an executive order that would reduce the pay of state workers to the federal minimum wage until a state budget is approved. A number of news articles published in the past few days report the order would call for full salaries to be paid retroactively after budget approval. It is anticipated that the Governor may sign the order on Monday.

The reports so far indicate a great deal of uncertainty surrounding this issue. Based on the information we have at this point, however, and our experience in prior years with similar budget situations, we will make every effort to ensure that employee salaries will continue to be paid at current levels and that all labor contracts will be honored until an agreement is reached on a State budget. At the same time, we recognize the severity of the budget crisis confronting the State, and as in the past, UC will take appropriate measures to assist the Governor and the State in addressing its fiscal situation.

We will let you know if our understanding of the University's obligations regarding this issue changes.

Sincerely,

Mark G. Yudof
President