The California Coalition of Travel Organizations (CCTO) is
calling on travel agencies, tour operators and agents in California to contact
their legislators so independent agents can continue to be categorized as
independent contractors (ICs), not employees.
The status of ICs was put in jeopardy one year ago,
when the state's Supreme Court ruled in the case of Dynamex Operations West
Inc. v. Superior Court of Los Angeles County that when evaluating wage claims,
courts in California can no longer apply a common-law test that takes a number
of factors into consideration when deciding if a worker is an employee or an
IC.
The common-law test was replaced with a three-pronged "ABC
Test," which makes it more difficult to classify a worker as an IC. One of
its three parts is problematic for agencies: It dictates that to be called an
IC, a worker must perform work outside of the hiring entity's usual course of
business.
If a wage claim was made against an agency and the worker was found to be improperly classified as an IC, the agency would be liable for any unpaid minimum wages or overtime, as well as interest and penalties.
"In the 42-plus years that I've been in this business,
I think that this has the potential to have the biggest impact on travel agents'
livelihoods as anything I've seen in the past, and if we don't get it exempt
that impact is going to be very negative," said Diane Embree, CCTO
president and the owner of Bali Barong Tours in Westlake Village, Calif., an IC
with Michael's Travel Centre.
"This is one time when the independent contractors
themselves have to step up ... This is not [a situation where] someone else
will take care of it," Embree added. "Every single one of them has to
step up and contact their legislators."
Assembly Bill 5,
currently sitting with the assembly's appropriations committee, addresses the
Dynamex decision and exempts some professions. The bill was introduced in late
2018 by Assemblywoman Lorena Gonzalez (D-80).
If the bill is amended to include agents as an exempt
profession, Embree said the CCTO would support it. The organization has been
lobbying for the exemption and last week met with the assemblywoman's
representative.
"We presented our case to her and she seemed to be very
positive," Embree said. "It's not ultimately her decision to make,
but she seemed to be very positive that we met the criteria that assembly
member Gonzalez accepts for businesses to be exempt."
The CCTO believes including that "independent agents
under the state's Seller of Travel Law are independent contractors" would
effectively exempt agents. The bill currently exempts licensed insurance
workers, licensed physicians and surgeons, registered securities broker-dealers
and investment advisors, and direct salespeople.
In addition to its in-person lobbying efforts, the CCTO is
calling on agencies, tour operators and ICs in California to contact their
legislators to add to the CCTO's efforts. Jerry Desmond Jr., a legislative advocate for the
CCTO, said he believes the next 2 to 3 weeks are "critical" for
grassroots efforts to build on the CCTO's work.
The organization has created scripts that members of the
travel industry can use when contacting legislators.
The IC script states, "I have the freedom to set my own
hours and schedules, set my own rates, select the customers with whom I will
work and market my own brand. Few, if any, of these important factors would be
available to me if I were to be forced into an unwanted employee relationship."
The CCTO is also involved with a broader movement to exempt
certain professions from the Dynamex decision. A number of affected industries,
ranging from real estate to insurance to construction, have banded together to
form the I'm Independent Coalition to fight the
change.
If both the CCTO's efforts with Gonzalez's current bill and
the I'm Independent Coalition's efforts are unsuccessful, Desmond said the
organization would likely work to get specific legislation for the travel
industry introduced during next year's legislative session.