Gov. Arnold Schwarzenegger has postponed his plan to eliminate about 22,000 temporary, part-time and contract workers and impose a hiring freeze because of the state budget impasse.

As more than 100 union workers picketed outside the state Capitol, the governor opted Monday not to sign an order to implement the cuts immediately. Instead, he's hoping legislative leaders are making progress on the overdue state budget, which has a $15.2 billion shortfall.

The order also would stop most overtime and allow him to roll back salaries for nearly 200,000 state workers to the federal minimum wage of $6.55 an hour. The workers' full pay would be reinstated once a state budget is approved.

Schwarzenegger issued the threat last week after he grew frustrated with lawmakers' inability to reach a budget deal for the fiscal year that started July 1. He wants one in place by Friday, the first of August.

Schwarzenegger spokesman Aaron McLear said the Republican governor would sign the order Thursday if no state budget is in place by then.