ASTA preps for more IC battles

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A meeting at Travel Leaders Group's New York headquarters about pending state legislation that could affect how workers are classified. Photo Credit: Jamie Biesiada

Travel advisor Barbara Colombo enjoys the freedom of being an independent contractor with Protravel International. 

The Harrison, N.Y.-based agent, a 40-year industry veteran, can come and go as she pleases. She picks her own schedule. If she chooses to go into the office, she doesn't sign in or out. She is independent.

But employment situations like hers could come to an end if the industry isn't able to secure an exemption to proposed legislation in New York state that seeks to change the way workers are classified.

New York is one of two states that have introduced worker-classification legislation following California's successful passage of Assembly Bill 5. ASTA and the California Coalition of Travel Organizations were successful in securing an exemption in AB 5 for sellers of travel before the bill hit the governor's desk, an effort the Society has now undertaken in several more states.

"If this goes through, this is going to completely change the industry,” said Colombo, who is also the president of ASTA's New York City chapter. "You're going to find a lot of independent contractors saying, 'I don't want this anymore.' ... For them, this would be a disaster."

The Society has been expecting states to introduce legislation like AB 5 and has been gearing up for those fights for some time.

The bill in New York and another in New Jersey are similar to AB 5 in that they attempt to institute an ABC Test to determine which workers are employees and which are ICs. In order to qualify as an IC, a worker would have to satisfy each of the test's three prongs.

In the New York bill, those prongs are defined as the following:

A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for performance of the work and in fact.

B) The person performs work that is outside the usual course of the hiring entity's business.

C) The person is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.

The problematic part for travel agents is the second, or B, prong. It is widely believed that "pure" host agencies, or those that just support ICs and do not themselves sell travel, would pass muster against that prong. However, agencies that sell travel and also engage ICs would not.

Pompton Plains Travel in Pompton Plains, N.J., is one of those agencies. Its owner, Joanne Hunt, also ASTA's New Jersey chapter president, sells travel at her storefront. She also engages three ICs. 

However, unlike in New York, it appears New Jersey's bill will no longer pose a problem to travel advisors. The Society said the bill's sponsor, state Senate president Stephen Sweeney, a Democrat, recently made comments suggesting that he would adjust the bill's B prong. New Jersey already uses a different ABC Test for worker classification, and with the adjustment that Sweeney said he would make, the current law's B prong would be used. That would enable workers to be classified as ICs if "the service is performed outside of all the places of business of the employer for which the service is performed."

The Society continues to monitor the legislation to ensure that agencies will be protected in its final form.

But in New York, the fight continues. Eben Peck, ASTA's executive vice president for advocacy, said the legislature will reconvene in January, but the Society is urging residents to contact their legislators now.

"We learned from California, comparing it to that, you've got to start early," Peck said. "If it turns into a big California-style fight in New York, we don't want to wait until March or April to get started. We want people to be making contact now."

The Society has created an online, grassroots portal to get in touch with legislators. Several hundred messages have already been sent. The industry is also responding in other ways. For example, Travel Leaders Group is working with ASTA and has set up meetings with advisors and agency owners to brief them on the situation. Travel Leaders has also asked advisors to sign petitions asking that their independent status be protected.

In a statement, CEO Ninan Chacko said, "The situation is rapidly evolving. We are sharing with them information on how to make their voices heard and plan to engage them in grassroots activity as appropriate. Our aim is to keep them informed and ready to act when the timing is right."

California's AB 5 was spurred by a 2018 California Supreme Court ruling stipulating that when evaluating wage claims, courts could no longer use a common-law test but instead had to use an ABC Test. Peck said he believes the New York and New Jersey bills' introductions were driven by organized labor after AB 5's success in California.

"I think it's been percolating for a while," he said. "And then organized labor has been energized by their win in California, and that's spreading to other states."

The Society anticipates that New Jersey and New York are just the latest in a series of states that will introduce legislation similar to AB 5. It specifically has its eyes on Illinois, Washington and Oregon. Especially in the first weeks of January, after legislatures reconvene, the Society will closely watch what legislation is introduced around the country, Peck said.

The Society feels prepared for more battles, thanks largely to its experience in California. Peck said the industry as a whole is already educated on the issue, eliminating the need to take precious time away from lobbying efforts when legislation is introduced. 

If a state were to pass worker-classification legislation unfriendly to travel advisors, Peck said, it would be "disruptive" and "turn the clock back" on the way the industry has evolved in the past 15 to 20 years, during which the IC population has proliferated.

"We don’t know exactly what the impact will be, but it won’t be good," Peck said. "For agencies that engage ICs and people who sell travel as ICs, it would be very bad and potentially catastrophic."

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