April 30, 2010
New legislation introduced late last week is expected to greatly raise the stakes for businesses that misclassify independent advisors
The Employee Misclassification Prevention Act would amend the Fair Labor Standards Act (FLSA) to require employers to keep records on their workers, and notify them of their employment or independent advisor classification and their right to challenge that classification. Under the legislative initiative, a worker would be presumed an employee if the business does not satisfy the bill’s record-keeping or notification requirements.
In an unprecedented move, the bill allows for an employer to be charged with a federal offense if it “fail[s] to accurately classify an individual as an employee.”
In its current form the legislation would implement the following measures:
Another pending legislative initiative is the Taxpayer Responsibility, Accountability, and Consistency Act of 2009. In addition to significantly increasing the amount of penalties associated with filing tax returns with incorrect information related to an employee’s status, the bill would revise the “safe harbor” provisions of the Revenue Act of 1978 making it more difficult for employers to designate certain workers as independent advisors for employment tax purposes.
Both forms of federal legislation would significantly increase operation costs for travel agencies. ASTA has allied itself and is advocating with a coalition of associations and business groups that have a common interest in mitigating the impact of both federal bills.
ASTA owns the federal copyrights in the information which it has created above. If you are a dues-paid member of ASTA you may, as a privilege of ASTA membership, use the information above in that business and may share the information with the management and staff, BUT you MAY NOT REDISTRIBUTE OR DISCLOSE BY ANY METHOD the information to ANY PERSON OR FIRM THAT IS NOT AN ASTA MEMBER. Your use of this information constitutes your agreement that if you violate the distribution restriction set out above, you will be liable to ASTA, as liquidated damages, in the amount of $7,500.