A new rule that will make millions of salaried, full-time
workers eligible for overtime pay has left many in the travel industry
concerned about the added work it could create for travel agency owners.
However, some agencies, in many cases larger ones, said
their compensation-management systems will leave them largely unaffected. On
Dec. 1, the Department of Labor will raise the salary cap under which most
full-time workers qualify for overtime pay from $23,660 to $47,476.
ASTA panned the new rule outright.
“While we believe employees should be compensated fairly
... an increase of this magnitude with little lead time will cause significant
disruption to our members’ business operations and the travel agency community
as a whole, which will be felt ultimately by the traveling public,” ASTA CEO
Zane Kerby said in a statement.
The department hadn’t changed the standard salary level
for overtime since 2004, when it was set at $455 per week or $23,660 a year.
ASTA took issue with a provision of the rule that the
standard salary level be updated every three years as well as “the lack of
accounting for cost-of-living variations in different parts of the country,”
both of which Kerby said would put a burden on small businesses.
John Werner, president of the Mast Travel Network, said
that since most agents make less than the new annual minimum to be exempt,
agency owners would have to adjust how they pay their employees.
He identified two “headaches” the rule could give agency
owners.
One, the rule sets new regulations on the percentage that
commissions can contribute to a worker’s base salary of up to 10% of the new
standard level.
“For most agencies paying a base salary plus commission,
earnings from commissions make up more than 10% of compensation,” Werner said.
Two, schedule management could pose a problem under the
rule with agents “frequently” working past normal hours.
“How are agency owners going to keep track?” Werner said.
“This will be a burden for small agencies in particular because they don’t have
the manpower to redistribute the workload or make changes to work schedules
very easily.”
Some agencies said they already have adequate systems in
place to monitor compensation and aren’t worried about the new rule.
“I can’t speak for the agency community as a whole, but I
can’t think of a single agency in TAMS [Travel Agency Management Solutions] or
any that I do business with, that isn’t sensitive to the 40-hour-a-week policy
with overtime pay beyond 40 hours per week,” said Robert Joselyn, the CEO of
the Joselyn Consulting Group and TAMS. “Obviously, this would not be an issue
for them.”
ASTA, while continuing to ask the Department of Labor for
relief from some of the rule’s regulations, will educate its members on
compliance. A webinar is scheduled for July 27 at 2 p.m. Eastern time.