N.Y. State the latest to attempt reclassification of independent contractors

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Independent contractor
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The New York State Senate has introduced a bill that aims to reclassify more workers as employees, not independent contractors. If passed as introduced, the bill would jeopardize travel agencies' ability to classify workers in New York as ICs.

The Society has opened an online portal for contacting N.Y. state lawmakers considering the bill.

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The bill is similar to one that was signed into law earlier this year in California, although that bill was amended to include a carve-out for travel agencies, thanks to the lobbying efforts of ASTA, the California Coalition of Travel Organizations and others in the industry. ASTA said it was expecting the New York bill's introduction and has already started preparations to fight for an exemption for agencies.

"We suspect other industries are already at work trying to get exempted, so now is the time to act, even though the legislature doesn't come back into session until January," ASTA wrote in its Travel Advisor Daily newsletter. "If you live in New York, please take two minutes to tell your state senator to amend this legislation and protect New York small businesses!"

Like the California bill, the New York bill, as written, requires the hiring entity to satisfy three factors to deem a worker an IC:

  • 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 the performance of the work and in fact.
  • The person performs work that is outside the usual course of the hiring entity's business.
  • The person is customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed.

Like California's bill, the portion problematic for agencies is the second factor, that a person performs work outside the usual course of the hiring entity's business.

Any agency that sells travel and also uses ICs to do the same would not satisfy that factor. It is largely believed, though not legally tested, that host agencies that only offer support services to agents, and don't sell any travel of their own, would satisfy that point.

"It is critical that this legislation be amended to protect the independent advisor model that has existed in our industry for decades and provides opportunities for thousands of small business owners," ASTA said.

Peter Lobasso, ASTA's general counsel, has said that a number of different three-pronged tests, often called "ABC Tests," exist around the country. But what sets those tests apart from the one in California -- and, now, the proposed test in New York -- is that they have two different ways to satisfy the element problematic to agencies.

Either the worker must perform work outside the hiring entity's usual course of business, or they must perform that work someplace other than the hiring entity's place of business. Unlike the language used in the California and New York worker-classification tests, that language is friendly to travel advisors, many of whom are home-based.

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