Today, the California Business and Industrial Alliance (CABIA) took out a full-page ad in USA Today condemning President Biden’s decision to tap California Labor Chief Julie Su for the number two role at the Department of Labor.
The ad, which ran in today’s Washington, D.C. edition of USA Today, asks viewers “Would You Hire Julie Su?” and lists the most recent “accomplishments” on her resume.
“Oversaw massive failure of California’s unemployment insurance (UI) system”
- As California’s Labor Secretary, Julie Su oversaw the state’s Employment Development Department (EDD) which is responsible for unemployment insurance claims. Su admitted back in April that the state’s UI system was in trouble, but problems have continued, with tens of thousands of Californians caught in a backlog of unpaid UI claims. The UI disaster even triggered an emergency audit, which found the EDD is putting millions at risk for fraud.
“Estimated $30 billion UI fraud on her watch, including UI checks sent to death row inmates”
- A recent state audit found that the amount of fraudulent payments made by the California EDD is over $11 billion. Su herself said “that the amount could go up to as much as $30 billion after clearing an extra 1.4 million claims flagged for fraud.” Another report discovered that the EDD sent as much as $1 billion in fraudulent payments to California prison inmates, including convicted murderer Scott Peterson. Fraudulent payments were also made out to Senator Diane Feinstein, and a Hollywood Hills-based rapper openly bragged about “getting rich” from fraudulent benefit payments.
“Called out in a state audit for bad decisions that led to these failures”
- The state audit on the EDD’s failings reported that “the EDD’s inefficient processes and lack of advanced planning led to significant delays in its payment of UI claims.” The report specifically called out Julie Su for her direct role in the crisis: “In spring of 2020, the secretary of the Labor and Workforce Development Agency directed EDD to pay certain claimants UI benefits without making key eligibility determinations and to temporarily stop collecting biweekly eligibility certifications…consequently, EDD now faces a very large impending workload of eligibility certifications that threatens its ability to operate effectively.”
“Failed to fix harmful laws like PAGA, encouraging frivolous lawsuits”
- The Private Attorneys General Act (PAGA) is a misguided law that’s been on the books for years in California. Each year, this law opens up countless employers to frivolous lawsuits for even small or accidental violations of California’s 1,100 page Labor Law Digest — including a typo on a paystub. Su has made no attempts to reform or even pause this harmful law, despite the added burden it’s placed on Golden State businesses that are trying to survive the pandemic. Failure of the Labor and Workforce Development Agency to properly review all PAGA claims has directly led to the current broken system.
The fraud in California’s UI system has gotten out of control under Julie Su’s watch. That’s on top of misguided labor laws she has failed to fix, like PAGA. If Su plans to export California’s broken bureaucracy to other places in the country, the outcome could be disastrous for employers and workers alike.