ASTA officially asked the Department of Labor to abandon plans to impose regulations that would make it more difficult for travel agencies to categorize workers as independent contractors (ICs).    

ASTA on Dec. 13 filed comments with the DOL. 

In October, the DOL had filed a draft of a new regulations regarding IC classification that would use an economic reality test to determine a worker’s status. It includes six factors, and the new regulation would put equal weight on all of those factors. The factors are the extent to which the work performed is an integral part of the employer’s business, opportunity for profit and loss depending on managerial skill, investments by the worker and the employer, degree of permanence of the work relationship, the nature and degree of control of the worker, and skill and initiative. 

The proposed rule is similar to the DOL’s employee/IC test under the Obama administration. Under the Trump administration, two rules had more weight: the control exerted over the worker and the worker’s opportunity for profit and loss.

“Rather than trying to fix something that isn’t broken, the proposal should be withdrawn,” ASTA president and CEO Zane Kerby said in a release. “For decades, the usage of independent contractors in our industry has grown steadily because it provides substantial benefits for both workers and agencies in situations where a traditional employment relationship doesn’t make sense.

“In our view, as compared with the interpretation currently in place, DOL’s proposal represents a clear, if modest, step backward that would increase uncertainty as to a worker’s status as either an employee or an independent contractor,” Kerby added.

In its comments, the Society noted that the IC model is prevalent and growing in the agency community. ASTA senior vice president and general counsel Peter Lobasso also noted ASTA’s longstanding desire to see a harmonization of federal tests that establish which workers are employees and which are ICs.

ASTA is not alone in asking the DOL to do away with its proposed regulations. Nearly 50 legislators from the Senate and House of Representatives signed a letter encouraging the same.

Industry experts have said it’s unlikely the DOL would audit travel agencies if the proposed rule was implemented, but encouraged agencies to shore up their IC agreements regardless.

The public comment period on the proposal closed last month. A decision, ASTA said, is expected in mid-to-late 2023.

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