(NewsNation) - ForPoliticization in Washingtonover who should lead the U.S. Department of Labor is more important: the tug of war for protecting workers versus the concern that regulation is holding back the U.S. economy.
Central statisticsJulia Su, former California secretary of labor and only cabinet secretary in the Biden administration unconfirmed by the U.S. Senate. The things Su is best known for affect millions of Americans: from everyone who drives an Uber to fast food workers who think their bosses cheated them out of their daily pay.
Depending on your point of view, a Department of Labor under Su would either win billions of dollars in wages and benefits for American workers, or it would hurt the economy and weaken America's delicate supply chain.
Date Sua confirmation vote is takenas the Biden administration tries to even out votes in the Senate. It could beis happening this week.
This is how this political debate affects all of America.
Transforming the concert economy
Su supported and forcedCalifornia lawwhich set strict limits on when companies can classify employees as "independent contractors".
Known as AB5, it was aimed specifically at so-called gig economy companies like Uber and Grubhub, as well asfreight transportindustry. These companies labeled their drivers as independent contractors, and as a result these workers were not eligible for benefits such as unemployment insurance and health care.
For Su and other attorneys, the law protected people who worked full-time but did not receive benefits—and in many cases werepaid below the minimum wage. However, opponents claimed that these giantsthey loved the flexibility of their job and now they wanted to lose it.
If the California law is ever fully enforced, so will companies like Uber and Lyftspend hundreds of millions of dollars annuallyprovide employees with benefits.
But months after it was passed, California voters approved a new measure backed by contract firmsbasically reverse AB5. Both principles make their way through California's legal system.
The Biden administration isreview similar restrictions for businesses that currently employ freelance workers. It includes a move to define workers as those who are "financially dependent" on their employer, which would limit who can be classified as an independent contractor.
Su, if confirmed, will enforce this new rule.
"Wage Steal Master"
Business groupsshe opposed Su's nomination, citing her work as California Secretary of Labor, where she aggressively prosecuted labor violations, including pay theft.
Wage theft may persistseveral forms: from asking employees to work outside of working hours to refusing to pay overtime.
Su has long been at the forefront of the fight for a fair wage and was the first to make herself knownwork for low-wage and guest workers. She took off"Stealing wages is a crime"campaign aimed at educating low paid workers about their rights and providing them with information on how to report abuse at work.
The Ministry of Labor is responsible for enforcing the anti-wage theft legislation along with the Ministries of Labor and Attorney General and the legal system. In 2017-2020, these offices are joint$3 billion recoveredfrom unpaid wages.
While low-income workers aremost affecteddue to wage theft can occur in all industries. It also affects the national and local economy when employers fail to pay for programs such as unemployment insurance that workers depend on.I found a studythat at the federal level, payroll theft in the form of non-payment of taxes accounted for $91 billion in lost tax revenue.
Business groupsthey arguedpassing more wage theft laws will hurt private businesses and commercial real estate.Some also arguedSu's efforts to combat wage theft were part of a special campaign by the unions.
franchise employees
Su is also part of a fierce movement to change the way California fast food workers are paid that is already spreading across the country. This could change the way restaurant franchises are run across the country.
She supportedFAST Act, which set up a 10-member board to regulate everything from wages to working conditions for fast food workers. Every business in California with 100 stores statewide will have to answer to the council, including union members, fast food workers and employers.
The Act is primarily intended to address this factfast food workers live close to the poverty line. The municipality is expected to raise the minimum wage for fast food workers$22 an hour.
But the California Department of Financeagainst the actdue to increased costs. Meanwhile, the US Chamber of Commerce points out that the law would make franchisors such as McDonald's Corporation liable for violations committed by smaller companies that operate their restaurants as franchisees. This will also increase the costsaid the hall.
The law is suspended untilvote of residents in November 2024whether the measure is to be approved or not. Meanwhile, Virginia and New York are nowconsidering their own versions.
The Biden administration also pushed for rules that would make large franchises such as McDonald's collectively responsible for pay and working conditions at individual locations owned by local business owners. Proponents argue that the current model allows large companies to avoid liability for poor conditions by shifting the burden to individual franchisees.
End of "tip credit"
are Americanspush backin exchange forTips. But there is a bigger question: should companies be able to use tips to pay lower hourly wages.
Forty-two states have a "tip credit" that allows employers to pay tipped employees, such as waiters and bartenders, less than the minimum wage.
CitiesItellnationwide tipkredit is rethinking. Su's opponents say she would focus on tipsbased on some of her previous comments(although she was not involved in any specific legislation).
As many as 5.5 million workers have jobs that qualify for a tip credit. If an employee does not receive enough tipsMake a difference, the employer must pay money to bring the worker up to the minimum wage. But employees say that's not the case.
That's what proponents of tip credit saylet the workerstake home more than the minimum wage and claim that efforts are being made to eliminate itsteal from employeestheir livelihoods. Instead of helping the staff they say removing the tip will cause ajob lossbecause employers wouldn't hire as many workers if they had to pay the minimum wage.
However,research has shownthat eliminating tips did not result in more restaurants closing, and customers did not leave fewer tips. They also argue that tipping disproportionately affects workers of color who are more likely to work in lower cost companies, while white workers tend to work in industries such as fine dining where tipping tends to be higher.
Some researchstates found without tipping actually saw greater job growth than those that allowed the tipping system.
While the Biden administration has not moved forward in abolishing tipping altogether, there have been attempts to tighten the rules around it.The most perfect, which includes a rule that limits the amount of tipping time for untipped work, such as cutlery rolling or other housework, and requires employers to pay the full minimum wage for time spent on untipped tasks.