*** UPDATE 3 *** The governor’s office points to this paragraph in the AG’s legal action…

WHEREFORE, Plaintiff People of the State of Illinois respectfully prays for the following relief: […]

f. A declaration that the Comptroller, in the absence of an annual appropriation, is authorized to process payment vouchers for the payment of the federal minimum wage and overtime requirements of the FLSA, or in the alternative, a declaration that the Comptroller, in the absence of an annual appropriation and payroll vouchers that comply only with the minimum requirements of the FLSA, is not authorized to process payment vouchers for the state employee payroll;

Their response…

FYI, see paragraph 35f, the AG is seeking on two forms of declaration: 1) Comptroller can only pay minimum wage or 2) the Comptroller cannot pay anyone. The Attorney General is trying to block full employee pay.

Emphasis in original.

*** UPDATE 4 *** From Attorney General Lisa Madigan in response to the above claim…

“I have been working with the Comptroller’s office to identify what payments can continue without a State budget to ensure that people who rely on critical government services—kids in the foster care system, low-income families who can’t afford to pay for groceries, mentally disabled individuals who need residential support—aren’t punished by the Governor’s and Legislature’s inability to finalize a budget. I want State employees to be paid. I also want State service providers to be paid. They all deserve to be paid. But this problem can’t be solved through a lawsuit. The only way to ensure State employees and service providers are fully and legally paid is with an enacted budget.”

[End of updates.]

* An interesting and politically deft preemptive move. AG Madigan wants judicial clarification about payments that already don’t require legislative approval. And she gets ahead of the curve by asking the court to rule on the employee paycheck issue.

Press release with emphasis added…

Attorney General Lisa Madigan announced she has filed an action in Cook County Circuit Court, seeking a court order clarifying that the State can continue to make legally authorized payments to fund critical government services in a timely manner.

Without a State budget in place, the Illinois Constitution and laws significantly limit the payments that the State can make. In preparation for the start of the new fiscal year, the Attorney General has been working with Comptroller Leslie Geissler Munger to determine what payments can continue without a State budget in place. Based on those preparations, this action seeks clear court approval for the Comptroller to make payments that do not legally require an appropriation by the Legislature, including payments authorized by specific state statutes, payments for services required under court consent decrees and payments to continue participating in federal programs. These payments help fund critical government services, such as medical care for children in foster care, residential placements for mentally disabled individuals, food assistance for low-income families, and the operation of the state hotline to report child abuse and neglect.

The action also asks the court to clarify the State’s obligation to comply with the federal Fair Labor Standards Act by paying State employees the federal minimum wage until a budget is enacted and they can receive their full paychecks.

Statement from Attorney General Lisa Madigan

“The Illinois Constitution clearly states that without a budget, the State’s authority to fund government operations and services is severely limited. I am bringing this action to ensure that legally supported expenditures can continue to be made and to address the question of how the state payroll is legally managed during the budget impasse.

Our state’s most vulnerable residents deserve access to the critical services that their lives depend on. Taxpayers deserve to benefit from the government operations they help fund, and state employees deserve to be paid. Unfortunately, without a budget, it is difficult to ensure these payments are made. It is my job as the lawyer for the State to ensure that to the greatest extent possible under the law, we deliver on those promises. This action is the best approach to quickly and efficiently resolve these challenges.

It is my hope that by securing a court order clarifying these expenditures, the Legislature and the Governor can enact a budget to fund State government for the new fiscal year. If not, I fear those who need the State’s services the most will suffer the greatest.”

Read the entire complaint by clicking here.

*** UPDATE 1 *** This letter was sent by the comptroller yesterday…

Dear Attorney General Madigan:

As you know, today marks the first day of fiscal year 2016. To date, the legislature has failed to adopt a balanced budget for the State, resulting in severe constraints on the Comptroller’s Office’s ability to fund essential State operations, including State employee payrolls. I note that while the rank and file State employees are at risk of delays in receiving paychecks due to the current budget impasse, the Legislators themselves passed a law last year which will ensure they are paid on time in the new fiscal year (PA 98-682).

My legal counsel has advised me that the inability to process payrolls for State employees due to the lack of an approved budget carries the potential for significant liability for the State under the federal Fair Labor Standards Act (”FLSA”). As we understand it, that Act provides for treble damages calculated from the amount of missed payrolls.

In order to fulfill my constitutional and statutory duty to issue State payments only where such payments are “pursuant to law and authorized,” and to protect the state from potential excessive fines, I am formally requesting that your office represent my office in Court to seek an Agreed Order to allow the State to avoid fines and penalties under the federal Fair Labor Standards Act.

I have determined from detailed and extensive conversations with State agencies and my staff that the circumstances today are no different than the State faced in 2007, when your office agreed to entry of an Agreed Order to allow payment to all State employees at their regular rates of pay. Specifically, while the mandate of the FLSA is to pay “covered employees” at a rate at least equal to the federal minimum wage, the State’s payroll processing systems in place today are not set up such that the proper amounts could be calculated and paid to “covered employees.”

In order to prevent the State from incurring significant fines or penalties under the FLSA, the Agreed Order sought on our behalf should include a sentence, as follows:

To the extent it is not feasible to limit the issuance of warrants or electronic payments only to those State employees and in such amounts necessary to comply with the FLSA, the Comptroller shall issue such other additional payroll warrants or electronic payments to ensure that the requirements of the FLSA have been satisfied, including payroll warrants or electronic payments to State employees that may not be covered by the FLSA.

This sentence is identical to the Agreed Order entered in 2007, copy attached.

The contribution of State employees to maintaining public services and public order is beyond dispute. Allowing these employees to be paid on time and at the correct rate of pay until the budget impasse is resolved will also promote the legitimate goals of government to maintain critical services.

Going forward, I believe it is imperative that the State be better prepared to establish compliance with the FLSA in the event of delays in adopting a budget in future fiscal years. I will initiate an effort to work with your office and the Governor’s state agencies to adopt procedures to promptly identify employees covered by the Act in the event of another budget impasse. At the same time, the state is moving toward implementation of a new accounting system that will allow us to better comply with the FLSA in future years.

In conclusion, I will appreciate your confirming at your earliest convenience your willingness to seek the Agreed Order as outlined in this letter. I thank you and your staff for working closely with, and providing information to, the state Constitutional Offices to navigate the challenges caused by this ongoing budget impasse. Please contact me if you have any questions.

Sincerely,

Leslie Geissler Munger
Comptroller

It appears we have the AG’s response.

*** UPDATE 2 *** Two 2011 judicial consent decrees were the subject of these recently successful lawsuits…

Yesterday, the ACLU of Illinois, Equip for Equality and the pro bono law firm Dentons filed emergency motions seeking court orders to ensure that services for people with disabilities under the three community integration Consent Decrees continue despite the lack of a new state budget.

Federal judges entered orders requiring the State of Illinois to continue funding in Ligas v. Norwood and Colbert v. Rauner. (Copies of the court orders are attached.) The decree in Ligas covers people with developmental disabilities living in large state-funded facilities seeking to move into the community, as well as people with developmental disabilities living in the family home seeking community services. The decree in Colbert covers people with mental illness and/or physical disabilities living in nursing homes in Cook County who want to move into the community. A federal judge has been asked to enter a similar order in Williams v. Rauner, which covers people with mental illness living in large state-funded facilities who are seeking to move into the community. The motion in Williams will be heard on Thursday, July 2nd.

Click to review copies of the court orders: Compliance with Ligas Consent Decree & Compliance with Colbert Consent Decree