California Bill Impacting ICs Moves Closer to Becoming Law

by Richard D’Ambrosio
California Bill Impacting ICs Moves Closer to Becoming Law

Experts estimate that hundreds of thousands of independent contractors working in California could be impacted, including drivers for Uber and Amazon, salon workers and others. Photo: Shutterstock.com.


A bill that would require California travel agencies to convert their independent contractors (ICs) into full-time employees inched closer to law this week, as the State Assembly approved a bill including rules to apply to properly classify workers.

California AB5 is based on the April 2019 California Supreme Court’s “Dynamex” decision, which states that to declare a worker an IC, a business must prove that the worker: 1) is free from company control; 2) performs work not central to the company’s business; and 3) has an independent business in their industry. All three of these conditions must be met to classify the worker as an IC.

Experts estimate that hundreds of thousands of independent contractors working in California could be impacted, including drivers for Uber and Amazon, salon workers and others. These workers would then be eligible for benefits such as unemployment insurance, paid parental leave, overtime pay, and workers’ compensation, which would drive up expenses for travel agencies. (California estimates it loses $7 billion in tax revenue each year from employees classified as ICs.)

Key travel agent advocates were closely monitoring the bill’s progress, and continuing campaigns to defeat the bill as it currently stands, or at a minimum, ensure that travel agencies would receive an exemption.

“We are opposed and engaged,” the American Society of Travel Advisors (ASTA) said in an email statement to Travel Market Report. ASTA and the California Coalition of Travel Organizations (CCTO) have renewed their campaigns against the bill with vigor.

“We continue to encourage all ICs and travel agency owners to contact their assembly members and state senators,” said Diane Embree, CCTO President.

Concern about the bill has been growing since April, when the CCTO issued a “call to action,” urging California travel agencies, tour operators, and independent agents to contact their state senators and assembly members. ASTA also is urging all California travel agents and industry colleagues to write to their representatives.

Might travel agencies be exempted?
When AB5 passed, the bill exempted a number of licensed professions — like doctors, dentists, lawyers, insurance and real estate agents, financial advisers, and hairstylists who rent booths at salons. The travel industry has not received an exemption, so far.

Embree noted how, during the Assembly’s floor discussion, prior to the passage of AB5, the bill's author, Assembly Member Lorena Gonzalez, restated her intention to address additional industries and situations with amendments as the bill moves forward.

“CCTO is working hard to get an exemption and we are in regular contact with Gonzalez's office. We continue to advocate for the inclusion of provisions stating that, under the California Seller of Travel Law, independent agents are independent contractors. We remain hopeful that as AB5 is amended, the travel industry will be exempted,” she said.

“It is disappointing that it doesn’t currently include an exemption that would cover travel advisors,” ASTA said in a statement. The bill still needs to go through the Senate, ASTA noted, “and further amendments are likely — and expected — before it’s signed by the governor.”

  1
  0
TMR THIS WEEK
http://services.travelsavers.com/AMGService.svc/REST/GetImage?ImageID=64b3c7ec-38ec-e911-9b23-782bcb667b27)

Top 5 Conversation Starters About Travel Insurance

Most travelers understand the need to have travel insurance, and most will agree to purchase it, if the option is presented in a clear way by their trusted travel advisor.

TMR Recommendations
Top Stories
What Travel Agents Need to Know About California Consumer Privacy Act Regulations

Learn what all travel agencies need to know about how the proposed new laws may affect the collection and use of personal information, and how to comply with the regulations.

Online Hotel Booking Scams Cost Consumers $5.7 Billion Annually

Nearly one in four consumers are deceived by online booking scams and dishonest marketing practices by fraudulent and misleading travel websites.

AIG Travel Guard Insurance Plan Changes Upset Advisors

The major travel insurance provider has altered its core offerings and eliminated commission protection, causing many agents to reconsider selling their plans.

Travel Advisors Say They’re Unafraid of Biometrics

Despite heightened privacy concerns, travel agents are enjoying the benefits of current facial recognition technology used for security purposes, and they look forward to more.

First Travel Agency In-House Video Production Studio Opens in Toronto

The studio helps luxury travel advisors connect with their clients through high-end, professionally produced video content.

Advisors Have to Work Harder to Deliver Authentic Culinary Travel Experiences

With more companies offering more standardized experiences, satisfying high-end culinary travelers has become more difficult.

News Briefs
Tip of the Day

“There is still a lot to be said for the human connection and the personal touch for travelers who want to ensure they have a good experience away from home.”

Roxanne Boryczki

AZ Trails Travel

Daily Top List

Top Holiday Destinations

  1. The Peloponnese, Greece
  2. Matera, Italy
  3. Perth, Western Australia
  4. The Scottish Highlands
  5. St. Barth’s Caribbean

Source: Conde Nast Traveller

TMR Outlooks