“Today’s Senate Health, Education, Labor, and Pensions hearing demonstrated Julie Su is not qualified to lead the U.S. Department of Labor.
Su refused to accept responsibility for the staggering $32 billion unemployment fraud allowed on her watch. Yet the independent state auditor, California Democratic lawmakers, and the law enforcement officials who uncovered the fraud have all blamed mismanagement at Su’s department.
Su’s statements regarding AB 5 were even more disingenuous. Far from being a neutral administrator of the law, she enforced it in the most aggressive way possible in order to destroy as many California livelihoods as possible. There is no doubt she would do the same thing with the independent contractor rule currently proposed by the Department of Labor rule.
If Julie Su is confirmed, the livelihoods of millions of American workers will be at risk.”
– Congressman Kevin Kiley, Chair of the Workforce Protections Subcommittee
Background: During today’s confirmation hearing, Julie Su made numerous statements contradicted by a State Auditor report, law enforcement officials, California Democrats, and the experience of millions of Californians who suffered under her mismanagement as Secretary of the California Labor and Workforce Development Agency. Although Su attempted to shift the blame for the largest case of fraud in California history, a 2021 State Auditor report found that “despite repeated warnings, [Su’s] EDD did not bolster its fraud detection efforts until months into the pandemic.” In contrast, Su claimed to the Senate that “in California, as soon as we knew that there was fraud happening, I shut the front door to that fraud.”
The State Auditor’s report went on to cite numerous other deficiencies that led to the fraud, including allowing claimants with suspicious addresses to collect unemployment insurance benefits, removing a key fraud safeguard without understanding its significance, and failing to assess whether the EDD’s fraud detection and prevention tools were effective. In fact, claimants weren’t even checked against the state prison rolls. The district attorney of Sacramento County called the EDD’s response to the fraud “slow and nonexistent.” Even California Democrats placed the blame squarely with Su’s EDD. Assemblywoman Cottie Petrie-Norris, who chaired the Assembly Committee with jurisdiction over EDD oversight, stated Su’s department failed to follow “simple and obvious steps that are implemented across the country.”
While Su, at today’s hearing, attempted to distance herself from California’s notorious AB 5 law, she was in fact responsible for using audits, fines, penalties, and threats to give the law the broadest possible impact. She promised as much right after AB 5 was signed, stating that her Department would proactively conduct audits and investigations of businesses. She continued: “That will be on both wages and tax because AB 5 expands the ABC test that way. So 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. So we can issue citations and demand both wages and taxes and other kinds of penalties.” Su’s department continued these audits even after the COVID-19 business shutdown, during which California often had the highest unemployment rate in the country.