Deputy Labor Secretary Julie Su, who President Joe Biden nominated to replace Labor Secretary Marty Walsh, will defend her previous support of a controversial law in California that cracked down on freelancers as she seeks confirmation in the Senate.
California Assembly Bill 5 entered into effect last year after a prolonged series of court battles, inducing protests from owner-operator truckers and a subsequent rebuke from the state government to “move forward” and “comply with the law.” The statute said that workers are often “exploited” through their classification as independent contractors; some 16% of Americans have nevertheless completed independent contracting work, according to a survey from Pew Research, which noted that many enjoy the flexibility such arrangements provide.
Su, who led the California Labor and Workforce Development Agency when Assembly Bill 5 was signed into law four years ago by California Democratic Governor Gavin Newsom, vowed in an interview with CalMatters that she would enforce the statute. “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 remarked. “So we can issue citations and demand both wages and taxes and other kinds of penalties.”
Interest groups have noted the support of Assembly Bill 5 from the official ahead of her Senate confirmation hearing on Thursday. Americans for Tax Reform previously contended that Su has an “extensive record of anti-freelancer, anti-independent contractor views and is more than willing to use government power to impose her radical agenda on American workers.”
Democratic lawmakers and senior Biden administration officials have sought to implement measures similar to Assembly Bill 5 at the federal level. A new rule proposed by the Labor Department last year would prompt regulators to consider whether contractors are “economically dependent” on their employers or are truly conducting business for themselves. Democrats have attempted to pass the Protecting the Right to Organize Act, also known as the PRO Act, which would likewise narrow the definition of an independent contractor.
“While independent contractors have an important role in our economy, we have seen in many cases that employers misclassify their employees as independent contractors, particularly among our nation’s most vulnerable workers,” Secretary of Labor Marty Walsh said at the end of last year. “Misclassification deprives workers of their federal labor protections, including their right to be paid their full, legally earned wages.”
Su directed the California Labor and Workforce Development Agency, which oversees the state’s Employment Development Department, while at least one-tenth of the $114 billion in pandemic relief claims handled by the agency involved fraudulent activity. The massive fraud could inhibit her confirmation as lawmakers examine the extent to which criminal actors abused federal pandemic relief initiatives.
Sen. Joe Manchin (D-WV) reportedly informed the White House that he is hesitant to confirm Su as he attempts to win re-election in his heavily Republican home state, a decision which could thereby sink the nomination. Sen. Kyrsten Sinema (I-AZ) and Sen. Jon Tester (D-MT) could also oppose Su as they create distance from the Biden administration amid their potentially difficult campaigns next year.