Alexandria, VA, January
10, 2023 – Last
month, the American Society of Travel Advisors (ASTA) strongly urged the U.S. Department of Labor (DOL) to
withdraw its proposal for determining employee or independent contractor
(IC) classification under the Fair Labor Standards Act (FLSA).
“Rather than trying to fix
something that isn’t broken, the proposal should be withdrawn. For decades, the
usage of independent contractors in our industry has grown steadily because it
provides substantial benefits for both workers and agencies in situations where
a traditional employment relationship doesn’t make sense,” said Zane Kerby,
ASTA President & CEO. “In our view, as compared with the interpretation
currently in place, DOL’s proposal represents a clear, if modest, step backward
that would increase uncertainty as to a worker’s status as either an employee
or an independent contractor.”
In October, DOL issued
its draft new interpretive regulation which, if adopted as proposed,
would rescind the prior Administration’s rule seeking to modernize and simplify
determination of worker status under the FLSA. DOL proposes instead to a return
to the more ambiguous totality-of-the-circumstances approach that has resulted
in inconsistent judicial precedent, depriving businesses of the predictability
the law should provide.
In ASTA’s filing, Peter Lobasso, the Society’s Senior Vice President
& General Counsel, says that the current guidance DOL is seeking to
overturn “provides businesses and other stakeholders, particularly those
operating in multiple states, with the confidence to expand their businesses,
resulting in growth of the economy as a whole. A secondary benefit…is the
reduced likelihood…of conflicting determinations when the same facts are
evaluated under different worker classification tests used by other federal
agencies.” In contrast, “A return to an unstructured
totality-of-the-circumstances interpretive approach where no single factor
predominates in the analysis [as DOL is now proposing] practically ensures that
the decades-long confusion among stakeholders and inconsistency among the
federal circuits interpreting the FLSA…will only continue.”
Forty-four U.S. Senate and
House members filed a letter in the docket similarly asking DOL to do away with
the proposal entirely, saying, “We urge DOL not to move forward with its
proposed rule for determining independent contractor classification due to this
negative impact on workers and businesses, the test’s lack of clarity, and the
devastating consequences for the U.S. economy. The proposed rule will
jeopardize millions of individuals’ independent contractor status under the
FLSA.”
The public comment period on the
proposal closed on December 13, 2022, and DOL will now consider stakeholder
concerns and issue a final rule sometime in mid-to-late 2023.
ASTA’s full comments can be
viewed here.