A state appellate court on Friday sided with the Schwarzenegger administration in its attempt to impose the federal minimum wage on tens of thousands of state workers.

It was not immediately clear how the ruling would affect Gov. Arnold Schwarzenegger's order a day earlier to pay 200,000 state workers the federal minimum of $7.25 an hour as the state wrestles with a budget crisis.

The state controller, who cuts state paychecks, has refused to comply with the order. The office declined to comment because it is still reviewing the ruling.

Friday's ruling affirms a lower-court ruling in favor of the administration in a lawsuit filed two years ago after the governor's first attempt to impose the minimum wage.

The latest ruling from the California 3rd District Court of Appeal in Sacramento concludes that state Controller John Chiang cannot ignore the minimum wage order from the state Department of Personnel Administration.

It says, " ... the DPA has the authority to direct the controller to defer salary payments in excess of federally mandated minimum wages when appropriations for the salaries are lacking due to a budget impasse ..."

The Republican governor issued the order this week on the first day of the new fiscal year because the state remains without a budget, as lawmakers remain far apart on ways to close California's $19 billion deficit.

Lynelle Jolley, spokeswoman for Schwarzenegger's personnel department, said the ruling means the controller's office must follow the administration's minimum wage order.