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Thune: Julie Su is the Wrong Choice to Lead the U.S. Department of Labor

“I hope that at least some of my Democrat colleagues will join Republicans in acknowledging the serious concerns about both her qualifications and her policy positions and urge the president to withdraw her nomination.”

April 20, 2023

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WASHINGTON — U.S. Sen. John Thune (R-S.D.) today discussed his concerns with the nomination of Julie Su to serve as the secretary of the U.S. Department of Labor. Thune highlighted Su’s time serving as secretary of labor for the state of California where she enabled massive fraud during the pandemic by directing the department to stop checking key eligibility requirements for individuals making unemployment claims.

Thune’s remarks below (as prepared for delivery):

“Mr. President, this morning the Senate Health, Education, Labor, and Pensions Committee is considering the nomination of Julie Su to be secretary of labor.


“Before joining the U.S. Department of Labor as deputy secretary under President Biden, Ms. Su previously served as labor secretary for the state of California.


“And in that post she was perhaps most notable for presiding over massive unemployment fraud during the COVID crisis.


“Mr. President, unemployment fraud was a significant problem during the pandemic.


“But even with widespread fraud, California stood out for the scope of its problem.


“During the first six months of the pandemic, California had an ‘improper payment’ rate of 36.6 percent.


“Let that sink in for a moment.


“An ‘improper payment’ rate of 36.6 percent.


“Ultimately, the state paid out around $30 billion in fraudulent claims between the start of the pandemic and last spring. 


“Now, Mr. President, certainly states faced an influx of unemployment claims during the pandemic that put additional pressure on unemployment agencies.

“But California’s fraud situation was not simply a result of an increased workload during the pandemic.

“It was also in part the result of Ms. Su’s decision to remove safeguards intended to help prevent fraudulent claims.


“During the early days of the pandemic, Ms. Su directed the California Employment Development Department to – in the words of the California state auditor – ‘pay certain claimants UI benefits without making key eligibility determinations and to temporarily stop collecting biweekly eligibility certifications.’


“These directives unquestionably helped smooth the path for widespread unemployment fraud as well as a significant number of improper payments.


“Mr. President, it’s difficult to know what President Biden was thinking when he decided to nominate someone who presided over massive unemployment fraud to be the next labor secretary.


“If that’s what happened when Ms. Su was the labor secretary for a single state, it’s difficult to see her as a qualified nominee to head the labor department for an entire country.


“But my concerns with Ms. Su don’t end there.


“In addition to questions about her ability to effectively administer a Cabinet department, I have serious concerns that Ms. Su would use her national platform to continue promoting policies that are hostile to workers.


“During her time in California government, Ms. Su was a proponent of Assembly Bill 5, a piece of legislation that reclassified many workers who had been considered independent contractors as employees through a set of criteria known as the ABC Test.


“That test proved to be so unpopular and unworkable that ultimately dozens of occupations were exempted from the measure – so many that the list of exemptions ended up being longer than the text of the original bill.


“Even California voters recognized how problematic it was, which is why they approved Proposition 22, which specifically designated app-based rideshare and delivery drivers as independent contractors.


“People tend to think of Uber or Lyft as the prime example of gig work, but in actual fact gig workers and independent contractors make up a sizable percentage of the labor force and are part of a wide range of professions, from hair dressing to truck driving to insurance adjustment.


“And a lot of gig workers and independent contractors are big fans of the freedom and independence that independent contracting provides – and are not looking to be reclassified as employees.


“A 2017 report from the Bureau of Labor Statistics found that a whopping 79 percent of independent contractors preferred their work arrangement to a traditional work arrangement.


“Less than 10 percent expressed a preference for a traditional job.


“The truth is that laws like California’s arise not from a groundswell of gig worker dissatisfaction but from liberals’ commitment to Big Labor, which would like to see the majority of workers forced to pay union dues.


“Laws like California’s Assembly Bill 5 are supported by unions because they would put more workers in a position where they might end up joining unions – even if gig workers and independent contractors themselves don’t want to find themselves in that position.


“And Ms. Su’s anti-gig-economy, anti-independent-contractor positions aren’t limited to her time in California.


“During her time at the Department of Labor, Ms. Su has continued to attack independent contracting and gig work. 


“She presided over the Biden administration’s proposed new worker classification rule last fall, which would force independent contractors and gig workers, who typically receive 1099 income, to reclassify as W-2 employees.


“Gig workers who receive 1099 taxable income have the ability to deduct business expenses like mileage (in the case of an Uber or Lyft driver), equipment rental costs, and home office needs. 


“Forcing gig workers to reclassify as W-2 workers would mean that they could no longer avail themselves of some of these deductions, putting this significant sector of our economy at a financial disadvantage and reducing worker flexibility. 


“This new rule would, however, offer opportunities for labor unions to collect new members, which is presumably Ms. Su’s and the Biden administration’s goal.


“President Biden, of course, is a big fan of Big Labor, and has done everything he can to advance Big Labor’s priorities.


“Ms. Su said as much last year to a group of labor activists. 


“‘The Department of Labor stands with you,’ she said. ‘The Biden-Harris administration stands with you. ... And you have a president who has vowed to be the most pro-worker, pro-union president in history.’


“The president’s and Democrats’ ultimate goal is passage of the PRO Act, which Ms. Su supports. 


“This legislation – a major priority of Big Labor’s – would implement a national version of California’s Assembly Bill 5 (only without the California bill’s exemptions) as well as a number of other provisions designed to appease union bosses.


“And if the PRO Act passed, its anti-independent-contractor provisions could wreak havoc on whole industries like trucking, which would not only be bad for affected workers but for our entire economy.


“The last thing we need during a time of supply chain problems, for example, is an unnecessary reduction in the number of truckers carrying food and goods around our country.


“I’ve introduced legislation in the past to help gig workers, and I was proud to join Senator Tim Scott this week in introducing his Employee Rights Act, legislation that would protect both union AND non-union workers and preserve the freedom of independent contractors to maintain their preferred work arrangements.


“And I will continue to support measures to ensure that Americans have the freedom to choose the work arrangement that works for them, instead of being forced into arrangements preferred by the Democrat Party and Big Labor.


“Mr. President, before I close I also want to mention the hostility Ms. Su has demonstrated to franchises and the franchising model, which has provided economic mobility for so many in this nation. 


“She is a supporter of another disastrous California idea, the FAST Recovery Act – legislation passed by the California state legislature and signed by the governor that would give government appointees authority to micromanage franchised restaurants throughout California, including setting wages and working hours, among other decisions.


“That law is so unpopular in her own home state that a million Californians signed a petition to add it as a ballot initiative in 2024 so that they can vote on whether the law should actually be implemented. 


“And the opposition is not surprising, when you consider that the measure would raise costs for restaurants and, according to the International Franchise Association, could increase prices at affected restaurants by as much as 20 percent.   


“Mr. President, Julie Su is a poor choice for secretary of labor.


“And I hope that at least some of my Democrat colleagues will join Republicans in acknowledging the serious concerns about both her policy positions and her ability to effectively administer the Labor Department, and will urge the president to withdraw her nomination.


“Mr. President, I yield the floor.”