The verdict in a 2008 case comes a day after the Governor placed an order for 200,000 employees' pay cut, till a budget is given clearance. The state controller, who is in charge of writing the checks, says that he might not quickly fulfill the terms.

An appeals court gave its verdict on Friday that Gov. Arnold Schwarzenegger has all the right to reduce state workers' pay to the centralized minimum wage, when the state budget is not yet received.

The decision, stemming from a 2008 case, came a day after the new economic year started without an investment plan and the Governor ordered the pay of approximately 200,000 state employees to be reduced to $7.25 for each hour, until a budget is passed.

The verdict from the 3rd District Court of Appeal in Sacramento is a key triumph for Schwarzenegger, who for two years has been facing a clash by Controller, John Chiang in regards to pay-cut orders.

But Chiang says that he might not put into practice the most recent instruction anytime soon. The state's puffed payroll system, he says, cannot simply be reprogrammed to make instant, large-scale salary adjustments.

The regulator said that he would seek direction from the court on how swiftly he must take action.