ASTA on Friday filed a petition with the Department of Labor,
asking for travel agencies to be exempt from the department’s new overtime rule.
Effective Dec. 1, Labor has widened the number of salaried
workers who are eligible for overtime pay (one-and-a-half times the regular
hourly rate).
The new maximum salary level at which full-time employees
must be paid overtime will be $47,476, more than double the previous salary
level of $23,660. Thus, most salaried workers making $47,476 or less must
receive overtime pay if they work more than 40 hours per week.
Labor has in place a Retail Service Establishment (RSE)
exemption to the rule, and ASTA believes some agencies are eligible for the
exemption, based on their business model and how they compensate employees.
However, since 1970 travel agencies have been on a
“blacklist” alongside other industries excluded from the RSE exemption because
Labor said they “lack a retail concept.”
The petition for rulemaking asks that Labor remove travel
agencies from the blacklist. It also asks that while the petition is being
processed, Labor issue a formal interpretation that it will follow a 1997 court
decision and allow qualifying agencies to use the RSE exemption.
That court decision stemmed from the Reich vs. Cruises Only
case in Florida.
“They [Cruises Only, an agency] had attempted to assert the
Retail and Service Establishment exemption when they were audited by the
Secretary of Labor and they lost initially, but the District Court found in
their favor, holding that they were in fact able to avail themselves of the
exemption because they met all of the statutory requirements for it,” said
Peter Lobasso, ASTA’s general counsel.
Eben Peck, ASTA’s senior vice president of government and
industry affairs, said Labor will establish a comment period — either 60 or 90
days — during which any member of the public can comment on ASTA’s petition.
ASTA is encouraging agencies to comment in its favor. Once
that comment period is closed, Labor can choose whether to act on the petition.
Peck said it is unclear when the comment period will begin,
but ASTA’s petition will become part of the Federal Register and will be put on
Regulations.gov.
Peck said it does not appear Labor often receives petitions
like ASTA’s.
“We’re kind of in uncharted waters, but we’re confident that
we’re going about this the right way,” he said. “This is a long-term play for
sure.”
If Labor does not act on the petition, ASTA will turn to
Congress in the hopes of finding a legislator to introduce legislation to
remove agencies from the blacklist. Peck said ASTA has already sought counsel
from legislators from the House and Senate’s labor committees, who unanimously
advised ASTA to start with Labor before seeking Congress’ help.
In April of this year, ASTA had met with Labor, and Peck
said it seemed it was the first time the department had heard of agencies’
issue with the RSE exemption.
“They were definitely noncommittal,” he said, but he added
that the legislators with whom ASTA met seemed to agree that the Society had a
strong case.
“In the exhaustive research that we’ve done on this, we
didn’t uncover anything that would shed any light or lend any support to why
travel agents were placed on the blacklist in the first instance,” Lobasso
said. “We feel stronger than ever that we have a very persuasive argument, and
it’s just a question of getting the DOL to take some action, and that can
obviously be the bigger challenge.”