DOL Labor Overtime Rule Late To Work

by Richard D’Ambrosio


The American Society of Travel Agents (ASTA) may find more support from the current Congress and Administration in its continuing work to eliminate a controversial Department of Labor (DoL) rule that would increase overtime pay for an estimated 4.2 million American workers, including many travel agency employees.

President Obama approved the rule in May 2016, increasing the salary threshold at which a business needs to pay overtime, from $23,660 to $47,476 per year, with automatic increases in future years. Industry estimates place the average travel agent salary at about $38,000, so agency owners could see more of their employees eligible for overtime under the rule.

The rule had been scheduled to go into effect Dec. 1, 2016, but a preliminary injunction was granted at the last minute by U.S. District Judge Amos Mazzant, Eastern District of Texas.

This year, a Republican administration and conservative hold in both houses might make the environment more favorable to abolishing labor rules that add expenses to businesses, as well as other Labor regulations underpinning it, ASTA said.

For example, there is a long-standing Retail or Service Establishment (RSE) exemption in current law that in theory would protect travel agencies from paying overtime. The RSE, which ASTA frequently refers to as “the blacklist,” states that overtime would not apply if an employee works at an establishment “recognized as retail…in the particular industry,” where at least 75% of annual sales are “not for resale,” and the employee is paid at least 1.5 times the applicable minimum wage, more than half of it in commissions.

On Aug. 9, 2016, ASTA formally petitioned DoL for removal of travel agencies from the blacklist. Labor responded to ASTA early in late December, stating that removing one industry would be a “significant undertaking requiring the Department to consider multiple industries beyond the travel agency industry.” DoL also said that ASTA’s interpretation of some case law does not favorably apply to removing agents from the blacklist.

ASTA said it will resubmit its petition to DoL once new Labor Department leadership is in place.

In a conference call with the press last week, Eben Peck, ASTA senior vice president of government and industry affairs, said the organization is trying to find sponsors in the Senate and House of Representatives to begin legislation to have travel agents removed from the RSE, hopefully in advance of ASTA’s June 7, Legislative Day.

He said ASTA is also consulting with members of the Senate Health, Education, Labor and Pensions (HELP) Committee and the House Committee on Education and the Workforce, which handle labor issues in Congress.

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