ANNAPOLIS, JAN. 8 -- Maryland Gov. William Donald Schaefer, who decided last month not to lay off state employees to help avoid a budget deficit, ordered today that they work more hours each week.

In an executive order, the governor established a standard 40-hour workweek for all state employees beginning Feb. 1. The order affects about 40,000 state employees who currently are required to put in 35.5 hours.

"Any increase in the number of hours worked will help the state to significantly reduce overtime costs and improve the quality of service to the people of Maryland," Schaefer said in a statement accompanying the executive order.

Joel Dan Lehman, president of the Maryland Classified Employees Association, predicted that many state workers will strenuously oppose the longer workweek. But he said that in his opinion, "It's more important in these economic times to have a job. Would you rather have something or be out on the street?" Lehman's union represents 41,000 state employees.

The order comes amid a budget crisis that forced Schaefer to trim spending and tap reserve funds to offset a projected $423 million shortfall in this year's $11.5 billion budget. Next year's budget also is expected to be pared.

Just before Christmas, Schaefer proposed laying off 1,800 employees to help close the budget gap. Legislative leaders and employee unions balked and forced him to make deeper cuts in programs and to use more reserves.

Schaefer said his executive order extending the workweek was "an alternative to terminating positions."

Those who now work 35 1/2-hour weeks total about two-thirds of the state work force, excluding those at colleges and universities. The rest already are required to work 40 hours. Schaefer said he signed the order in the interest of increasing productivity.

A spokesman for Schaefer, Paul E. Schurick, said the total savings in overtime costs had not been calculated. However, Lehman estimated the savings at $35 million to $40 million a year.