WASHINGTON, DC – American workers and businesses will face more regulation, mismanagement, and waste from Washington should the Senate confirm Julie Su as Labor Secretary, warned House Republicans today. In a letter to President Biden, Ways and Means Committee Chair Jason Smith (MO-08), Education and the Workforce Committee Chair Virginia Foxx (NC-05), Speaker Kevin McCarthy (CA-20), Representative Michelle Steel (CA-45) and Republican members of the California congressional delegation called on the Biden Administration to withdraw Deputy Secretary Su’s nomination for the lead post at the department, citing the severe operational failures that happened under her tenure as Secretary of California’s Labor Workforce Development Agency (LWDA) and her track record of promoting radical policies that undermine workers and businesses.

Today’s letter by House Republicans cites Deputy Secretary Su’s record of mismanagement, reckless decision making, and poor accountability when given a similar leadership role in California and potential disastrous ramifications at the federal level if Ms. Su becomes Secretary:

“As the head of LWDA, Ms. Su oversaw the Employment Development Department (EDD), which manages UI claims and other benefits programs for the state. In that role, Ms. Su presided over severe operational failures at EDD. A January 2021 report issued by the California State Auditor found significant weaknesses in EDD’s approach to fraud prevention, which led to billions of dollars in improper UI benefit payments. According to the report, EDD paid $10.4 billion on claims that it later determined may be fraudulent. The report specifically stated that $1 billion of this $10.4 billion was due in part to a decision to streamline EDD’s process by removing a basic safeguard against paying individuals with unconfirmed identities…While EDD later estimated the amount of fraud to be $20 billion, an analysis from Lexis Nexis Risk Solutions estimated total fraud of $32.6 billion when other benefit programs administered by EDD were also considered.”

Additionally, Republicans pointed to Deputy Secretary Su’s continued support of policies she pursued in California that nationwide would exacerbate the negative impact of Biden Administration policies on supply chains and workers:

“[D]uring her tenure at LWDA, Ms. Su supported problematic public policies that have only magnified the supply chain crisis in the United States. California law AB-5 implemented a statewide ‘ABC test’… Such a test severely restricts the ability of many types of independent workers, including gig workers, to continue doing the work they wanted, in the way they wanted. In fact, the bill’s passage was so unpopular that lawmakers had to carve out dozens of exemptions to favored industries because the law’s requirements were unworkable and unrealistic in today’s economy. In addition, California voters overwhelmingly supported a ballot initiative called Proposition 22 to further roll back the reach of AB-5.” 

Read the letter here.

Background:

• As head of California’s Labor Workforce Development Agency, Deputy Secretary of Labor Julie Su presided over an estimated $32.6 billion in fraudulent unemployment insurance and other fraudulent benefit claims.
• Deputy Secretary Su is a long-time proponent of policies that weaken supply chains and unfairly target gig workers, contractors, and other workers seeking flexible, independent employment arrangements.
• Deputy Secretary Su’s policy positions were roundly rejected by the citizens of California who voted overwhelmingly to rollback her restrictive labor policies.
• On February 28, 2023, the Ways and Means Committee approved legislation to jumpstart recovery efforts on hundreds of billions of dollars of COVID unemployment insurance that was misspent or stolen through fraud. ONE-PAGER: Protecting Taxpayers and Victims of Unemployment Fraud Act
  • ONE-PAGER: Protecting Taxpayers and Victims of Unemployment Fraud Act