Chiang told a state committee Monday it would take at least six months to update the state's outdated payroll system.
Last week, the governor signed an executive order laying off more than 10,000 state workers and reducing the wages of many other state employees to $6.55 an hour. Schwarzenegger said the move is necessary until state lawmakers agree on a new budget.
"We can't pay minimum wage under the current system, so we either pay no wage or we pay full wage," Chiang said. "And certainly, the choice is, we're not going to pay people no wages, they've worked hard."
California lawmakers returned to Sacramento Monday from their summer break. State legislators have four weeks to wrap up their 2008 regular session, but the governor could call them into a special session if a new budget is not reached by August 31.