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Travel Advisors to Department of Labor: Independent Contractor Proposal Should Be Withdrawn


 

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“Rather than trying to fix something that isn’t broken, the proposal should be withdrawn.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

 

 

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ABOUT ASTA
Rebranded in 2018 as the American Society of Travel Advisors, ASTA is the leading global advocate for travel advisors, the travel industry and the traveling public. Its members represent 80 percent of all travel sold in the United States through the travel agency distribution channel. Together with hundreds of internationally-based members, ASTA’s history of industry advocacy traces back to its founding in 1931 when it launched with the mission to facilitate the business of selling travel through effective representation, shared knowledge and the enhancement of professionalism. For more information about the Society, visit our mission statement.  

 

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