At least six Republicans had said they weren't ready to back Puzder and were waiting for his confirmation hearing. CNN reported earlier Wednesday that top Senate Republicans urged the White House to withdraw Puzder's nomination because at least four, and as many as 12, GOP senators planned to vote against confirmation.
In the 52-48 Senate, three Republican defections would have doomed Puzder if all 48 Democrats voted to deny him.
Puzder is head of the fast food conglomerate CKE Restaurants Inc. that includes Carl's Jr. and Hardee's. His withdrawal comes after a week that saw party-line confirmations in the Senate and a tie-breaking vote cast by Vice President Mike Pence to confirm Education Secretary Betsy DeVos. That 51-50 tally was the first time a vice president ever broke a tie on a cabinet nomination.
Trump has already lost one senior member of his administration. He dismissed Mike Flynn as national security adviser on Monday because the administration said he may have misled the president and vice president about his communications with a Russian envoy.
Puzder acknowledged early this month that he employed an undocumented immigrant as a housekeeper until learning of the worker's immigration status. Senate Majority Leader Mitch McConnell, a Kentucky Republican, had said last week that allegations of hiring undocumented workers have sunk other Cabinet nominees, but not always.
"We're always looking for nominees who have never made a mistake," McConnell told reporters at the time. "He realized the mistake. He fixed it and I think is eminently qualified for the job."
Opponents also seized on multiple news reports that Puzder had been accused by Lisa Fierstein, his first wife, of domestic abuse. Puzder denied the allegations. Fierstein, in a Jan. 18 letter to lawmakers, said that she had made such allegations against Puzder but later withdrew them, saying "Andy is not and was not abusive or violent."
Republican Sen. Susan Collins of Maine -- one of those who expressed doubts about Puzder earlier this week -- said she had viewed an episode of Oprah Winfrey's talk show dealing with domestic violence in which Fierstein appeared. "I am reviewing the other information that has come to light and I'm sure all of this has been explored thoroughly," Collins said at the time.
Puzder had agreed to divest an ownership stake worth as much as $50 million in his closely held fast-food company if he was confirmed as the next labor secretary, according to his federal financial disclosure and ethics agreement.
Democrats sharply criticized Puzder's nomination, as Minority Leader Chuck Schumer of New York said he "is so anti-working people that it's appalling."
Puzder opposes efforts to raise the minimum wage. He also has written that legal immigration was an asset to the nation and that it would be unworkable to deport the 11 million undocumented people in the U.S., as Trump promised repeatedly during his campaign.
But he also said Trump's proposals to build a border wall, stiffen enforcement and defund cities that provide sanctuary to undocumented immigrants were reasonable.