An exemption for travel advisors appears to have been secured for new legislation in California that dictates which workers are employees and which are independent contractors (ICs).

The California Coalition of Travel Organizations (CCTO) and ASTA on Friday night said they are appreciative that a new provision to Assembly Bill 5 (AB 5) will enable travel agencies to use a long-standing rule to categorize workers instead of a new test that would make it difficult for existing ICs to remain as such.

The Los Angeles Times reported on Friday that travel advisors were one of a handful of new industries listed as exempt in the bill.

"We look forward to seeing the bill text, but the fact that this exemption was added to the bill is a tremendous victory for our industry," ASTA executive vice president of advocacy Eben Peck said in a statement. "We commend [Assembly member Lorena Gonzalez, the bill's sponsor] for her decision to include it and to the many ASTA and CCTO members who put in so much work over the past few months to make this day a reality."

AB 5 codifies the Dynamex decision in California, which changed the method of determining whether a worker is an IC or an employee. Last year, the California Supreme Court ruled in the case of Dynamex Operation West Inc. v. Superior Court of Los Angeles County that an "ABC test" should be used to determine a worker's status.

The ABC test has three parts, one particularly problematic for agencies that dictates that a worker must perform work outside the hiring entity's usual course of business to be considered an IC.

With an exemption to AB 5, travel agencies will use the old test used to determine a worker's status, which uses a common-law approach. That test takes into account a number of factors when determining which workers are employees and which are ICs.

The industry has lobbied for an exemption to the new rules for some time. ASTA and CCTO members have testified in person and met with legislators. ASTA has also seen unprecedented response to its grassroots campaign in favor of the exemption.

CCTO president Diane Embree said the organization was pleased with the exemption and thanked ASTA, CCTO members and the USTOA, Student Youth Travel Association, Signature Travel Network, Westa, Ensemble Travel Group, PATH, Travel Leaders Network and Virtuoso.

"The text of the specific amendments made today to AB 5 will not be in print for a few days," Embree said. "Once we have this confirmation, CCTO will support AB 5 and will urge California senators and assembly members to vote in support of the legislation, and we will also request the Gov. Newsom sign AB 5 into law." 

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