California Code, Penal Code - PEN § 2700

(a) The Department of Corrections and Rehabilitation shall require of every able-bodied prisoner imprisoned in any state prison as many hours of faithful labor in each day and every day during the prisoner's term of imprisonment as shall be prescribed by the rules and regulations of the Secretary of the Department of Corrections and Rehabilitation.

(b) When any statute requires a price to be fixed for any services to be performed in connection with the work program of the Department of Corrections and Rehabilitation, the compensation paid to prisoners shall be included as an item of cost in fixing the final statutory price.

(c) Prisoners not engaged on work programs under the jurisdiction of the California Correctional Training and Rehabilitation Authority, but who are engaged in productive labor outside of such programs may be compensated in like manner.  The compensation of the prisoners shall be paid either out of funds appropriated by the Legislature for that purpose or out of such other funds available to the Department of Corrections and Rehabilitation for expenditure, as the Director of Finance may direct.

(d) When a prisoner escapes, the secretary shall determine what portion of the prisoner's earnings shall be forfeited and the forfeiture shall be deposited in the State Treasury in a fund known as the Inmate Welfare Fund of the Department of Corrections and Rehabilitation.