If and when the nomination of Acting Secretary of Labor Julie Su is confirmed by the Senate, will she remain an enthusiastic advocate of California’s radical style of labor regulation, or moderate her views as she did at her contentious confirmation hearing on April 21?
In 2021, she was easily confirmed by the Senate to be deputy secretary of labor, the No. 2 position under the previous Secretary of Labor, Marty Walsh, the former Boston mayor, and union chief who served in the administration from 2021 until he stepped down in March.
Things have not gone as easy for Su this time around and her new nomination has stirred doubts among even some Democrat Senators who appeared to be dubious about her mismanagement of billions of dollars in money meant to help citizens and her zealous enforcement the state’s anti-independent contractor labor legislation.
A former civil rights attorney, she served in a number of state government labor positions until her controversial tenure as head of the California Labor and Workforce Development Agency during the COVID-19 pandemic.
In that post, among Su’s responsibilities was the supervision of the state’s Employment Development Department, which was charged with handing out $170 billion in unemployment claims. $20 million to $36 billion of which later turned out to be fraudulent. A state audit blamed her mismanagement for these enormous losses.
In addition, under her executive leadership, the entire system had become such a mess that an estimated one million qualified applicants never received any of the money they were due under law, and another 350,000 were deprived of funds because debit cards handed out by her agency lacked adequate security measures, a fact that quickly became evident to professional criminals.
The issue of her responsibility for this mess was raised repeatedly at her Senate confirmation hearing that was held on April 20, where she faced criticism for not addressing the fraud issue in California sooner or more effectively than she did.
There already is precedent for Democratic senators voting to block a Biden Labor Department nominee. Last year, Sens. Kyrsten Sinema (I-AZ), Mark Kelly (D-AZ) and Joe Manchin (D-WVA) voted to block Biden’s nomination of Dr. David Weil to be chief of DOL’s Wage & Hour Division, a position he had served in during the Obama administration.
In a situation similar to Su’s, He was rejected because of his similarly extreme position condemning the very idea that the independent contractor concept could in any way be legitimate.
When he served at DOL under Obama, Weill had gone so far as to publicly declare that there were no such things as independent contractors; they all were simply misclassified employees (a phrase that was later repeated by Hillary Clinton during her 2016 presidential run).
In the immediate aftermath of the April 20 hearing, Kelly, Sinema, Manchin and Sen. Jon Tester (D-MT) who earlier expressed doubts about her nomination had not yet said how they intend to vote on her nomination.
In her role as head of California’s state employment agency, Su vigorously enforced an anti-contractor measure, she also raised the ire not just of employers, but also of the independent contractors and gig workers who were hurt by her enthusiastic embrace of AB 5, the state’s law seeking to eliminate most forms of contractor status.
She went as far as to condemn the use of contractors for leading to what she tartly termed “the day labor-ization of our economy.”
In a 2019 interview she explained, “we will be doing investigations and audits so that those who want to comply with the need to reclassify can do so and those who don’t will understand that’s not the kind of economy we want in California.”
She began this process by adjudicating about 1,000 cases in the port trucking industry that she said resulted in finding millions of dollars owing to truck drivers who judged to be misclassified.
During her April 21 Senate hearing, Su noted that there is no new independent contractor rulemaking currently on DOL’s agenda and declared that she had no intention of adding one absent a law from Congress directing her to do so.
What is on DOL’s agenda is a rulemaking seeking to preempt the department’s Trump-era independent contractor rule and substitute it with one that is similar to the Obama-era rule that it had replaced. DOL’s official agenda says the new rule is scheduled to be issued this August.
Although members of the House of Representatives have no vote on Su’s confirmation, House Speaker Kevin McCarthy (R-CA) and prominent House Republicans sent a letter to President Biden have expressing their unhappiness with her nomination.
“Because of her misguided record in California, we have major concerns about potential disastrous ramifications at the federal level if Ms. Su becomes Secretary,” they declared.
