WASHINGTON – Today, U.S. Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, delivered a speech on the Senate floor expressing concern over the nomination of Department of Labor (DOL) Deputy Secretary Julie Su to be Secretary of DOL. This comes after President Biden formally sent her nomination to the Senate on March 14th.
Specifically, Cassidy criticized a proposed DOL rule released under Su’s leadership that would limit Americans’ ability to classify themselves as independent contractors and set their own hours. He also raised concerns over Su’s tenure as Secretary for the California Labor and Workforce Development Agency, where she oversaw the implementation of AB 5, a law that removed the flexibility of individuals to work as independent contractors.
“Deputy Secretary Su has a troubling record and is currently overseeing the Department of Labor’s development of anti-worker regulations that will dismantle the gig economy,” said Dr. Cassidy. “This does not inspire confidence in her current position, let alone inspire confidence that she should be promoted.”
“The priority of the Biden administration should not be whatever makes it easier to forcibly and coercively unionize workers while undermining the business model of the establishments they work for. It should be to increase individual freedom and opportunity,” continued Dr. Cassidy. “Su’s record now and in her previous position as Secretary for the California Labor and Workforce Development Agency deserves scrutiny. I look forward to a full review and hearing process for her nomination.”
Click here to watch Cassidy’s full speech.
Last Tuesday, President Biden formally nominated Julie Su to be Secretary of the Department of Labor.
Now, as ranking member of the committee that oversees her nomination, I felt it was important to express some concerns that have only grown since her previous nomination.
Deputy Secretary Su has a troubling record and is currently overseeing the Department of Labor’s development of anti-worker regulations that dismantle the gig economy. This does not inspire confidence in her current position, let alone inspire confidence that she should be promoted.
Ms. Su’s record now and in her previous position as Secretary for the California Labor and Workforce Development Agency deserves scrutiny. I look forward to a full review and hearing process for her nomination.
In California, Ms. Su was a top architect of AB 5—a controversial law that removed the flexibility of individuals to work as independent contractors.
Independent contractors, or what we call freelancers, make their own hours and choose the type of work they wish to do. I was taking a Lyft, and the driver told me he was able to clear 500 dollars a day by having the Uber, Lyft, and even Door Dash driver apps on his phone. He flips between them, he chooses a job to take from whichever one is immediately available, and through it all, he clears 500 dollars a day. If he is working 5 days a week, that’s ten thousand dollars a month.
Independent contractors are shielded from forced or coerced unionization that would strip that flexibility away. This of course has made eliminating this classification a top priority for large labor unions who benefit from more workers being forced to pay mandatory union dues.
Important to note, even in California, AB 5 is extremely unpopular. 59 percent of California voters supported a measure to exempt rideshare drivers from AB 5. The law is so flawed the governor and state legislature had to pass multiple laws to exempt over 100 occupations. In fact, the statutory exemptions are longer than the text of AB 5 itself.
But Ms. Su has taken her support for this anti-worker, pro-union policy to the Department of Labor.
During her tenure as Deputy Secretary of Labor, essentially the agency’s “Chief Operating Officer,” the Biden Administration pushed to eliminate independent contracting via federal executive rulemaking.
There was no hope of ever getting an AB 5-like law through Congress, so they pursued their goals through regulation.
This regulation would undermine the business model of services like Uber, Lyft, and Door Dash that provide valuable services and give drivers the ability and freedom to set their own hours and even hop between states and between companies based upon where they wish to be and which company provides them with the best opportunities.
By the way, truckers will be severely impacted. Many truckers are independent owner-operators, and many own their own trucks. This regulation could devastate the freedom of these truckers, and it could potentially impact the supply-chain in the process as trucking moves more than 72 percent of goods in the United States every year.
We don’t need the application of law from one of the most liberal states in the nation on a national level. A law rejected in California is not a policy that we should be pursuing on a federal level. We need to support the rights of workers and their ability to choose what's best for them, not put them in a straitjacket serving other people's goals.
I also want to hear Ms. Su’s position on DOL’s effort to uproot the franchise model which employs over 8 million Americans. Deputy Secretary Su has made public comments indicating that she will pursue attempts at DOL to forcibly impose the joint employer classification on the almost 800,000 franchises operating in our communities the same as any other small business.
Saddling franchisers with liability for thousands of franchise owners that actually operate the small business would be a sure way to destroy the system of franchising. This model has allowed those underrepresented in the business community, such as women and people of color, the ability to live the American dream, becoming successful small business owners as they help create jobs lifting other workers out of poverty.
No one is surprised that the joint employer rule is a major priority for large labor unions. It’s easier for them to pressure one company to unionize to increase their union dues than to pressure thousands of independent businesses.
The priority of the Biden Administration should not be whatever makes it easier to forcibly and coercively unionize workers while undermining the business model of the establishments they work for. It should be to increase individual freedom and opportunity.
In addition to her policies, we should ask questions about how Ms. Su presided over a mismanaged California unemployment insurance program during the pandemic, and why California paid $31 billion in fraudulent claims while she chose to suspend the eligibility determination process. Some of these payments went to inmates and known domestic and international criminals.
To put into context, DOL’s requested budget is $15 billion dollars and employs more than 17,000 people. This means that Ms. Su lost more than double the annual budget of the agency she will be responsible for managing in Washington D.C. This calls into question her qualifications as a manager.
Unfortunately, there are many reasons to be concerned about Ms. Su’s nomination to head the Department of Labor.
I look forward to a full hearing process to further discuss.