Welcome
Daily Labor Report ®

Biden Picks California’s Julie Su for Deputy Labor Secretary (1)

Feb. 10, 2021, 2:58 PM; Updated: Feb. 10, 2021, 4:36 PM

California Labor Secretary Julie Su is President Joe Biden’s nominee to serve as second-in-command at the U.S. Labor Department, the White House announced Wednesday.

Progressive organizations and Asian-American lawmakers had promoted the veteran civil rights and employment attorney for the top DOL job, but Biden instead selected Su to serve as deputy labor secretary alongside Boston Mayor Marty Walsh, the nominee for U.S. labor secretary.

Su’s path to winning approval in the Senate will intersect with mounting criticism of her role in overseeing a California agency responsible for paying out at least $11 billion in fraudulent jobless benefits claims.

Late last month, a day after Bloomberg Law reported that Biden planned to pick Su for deputy labor secretary, a California audit report revealed that a state subagency Su oversees was unprepared for the surge in unemployment claims prompted by the pandemic. The report faulted her leadership, and a subsequent audit report detailed how California regulators were slow to respond to problems in how it processed unemployment claims, increasing the potential for improper payments.

If confirmed as DOL’s No. 2 official, Su would arrive at a department Biden has tasked with several important responsibilities in the economic recovery effort, including a mandate to revise guidance for states on the processing of unemployment insurance claims.

Fighting for Workers

The daughter of Chinese immigrants, Su earned accolades during a 25-year career in civil rights and worker rights advocacy, including fighting for vulnerable workers—first at a nonprofit public interest organization and then in state government over the last decade.

Biden’s choice of Su for deputy labor secretary “sends a clear message that experience and compassion have returned to our government,” Rep. Judy Chu (D-Calif.), who chairs the Congressional Asian Pacific American Caucus, said in a prepared statement.

“From her time as a workers’ attorney at Asian Americans Advancing Justice through her current role as California Labor Secretary, Julie has fought for workers from all different unions and of all different backgrounds,” Chu added. “But she has been particularly involved in serving the under-served, those earning the least and being exploited the most.”

During her 2011-2018 tenure as California labor commissioner, Su was in charge of enforcing the state’s wage-and-hour laws, which are more protective of workers than the federal statute covering minimum wages and overtime pay.

In 2019, she was promoted by California Gov. Gavin Newsom to serve as secretary of the state’s Labor and Workforce Development Agency, a massive bureaucracy that includes divisions focused on worker safety, unemployment insurance, workers’ compensation, and public sector collective bargaining.

“Julie Su has an impressive record standing up and winning for working people. She understands that economic and racial justice are inextricably linked, and has stood up for immigrant communities that are too often demonized and preyed upon,” Mary Kay Henry, president of Service of Employees International Union, said in a statement.

“We have worked together on California’s Future of Work Commission, and I can attest to her dedication to improving the lives of working people and the fact that she hears the demands of essential workers to be respected, protected and paid,” Henry said.

Jobless-Aid Woes

But it’s her management of California’s jobless aid system—and the vast fraud perpetrated upon it—that’s generated attention throughout the pandemic.

While California is not the only state to fall prey to such schemes during the pandemic, the Labor and Workforce Development Agency’s apparent oversight failure will now face increased scrutiny from business lobbyists and GOP Senators. Republicans on the Senate Health, Education, Labor, and Pensions Committee could use the billions of dollars California has paid in fraudulent claims as ammunition to try to derail her confirmation.

The California Business and Industrial Alliance, an organization of state entrepreneurs, placed a full-page ad in the Washington edition of USA Today on Feb. 1 to oppose nominating Su to be DOL’s second-in-command. After highlighting California’s unemployment benefits “failures,” the ad claimed Su’s “abysmal track record in California shows she’s not up for the task.”

That doesn’t reflect the view of the state’s entire business community, however. Allan Zaremberg, president of California’s Chamber of Commerce, recently complimented Su on her “professionalism” and willingness to listen to employer concerns.

Her nomination comes after Walsh, a former union construction leader, sailed through his Senate confirmation hearing on Feb. 4, fielding few pointed questions from Republicans.

The Senate labor committee is scheduled to reconvene Thursday to vote on whether to advance Walsh’s nomination to the full Senate. Walsh will likely be confirmed with some GOP votes in his favor, based in part on his reputation as a pragmatist who’s prone to collaborating with employers and with Republicans.

Vice President Kamala Harris’ tie-breaking vote in the divided Senate means the chamber can approve Su without a single Republican in support. But some on the right view her as a vulnerable nominee, and are energized to create hurdles along her route to a Senate floor vote.

(Updated with additional reporting, starting in 6th paragraph.)

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com; John Lauinger at jlauinger@bloomberglaw.com

To read more articles log in. To learn more about a subscription click here.