The threat to the status of independent contractors (ICs) has moved to the East Coast, with new bills recently introduced in New York and New Jersey. In September, California passed a law regulating the status of ICs, but included an exemption for travel agents after serious lobbying efforts from the American Society of Travel Advisors (ASTA) and the California Coalition of Travel Organizations (CCTO). This was a huge win for independent agents in the state.
ASTA is already at work on the New York bill, though the state’s legislature is currently out of session, so any developments on the issue will come in January. The bill, according to ASTA, is very similar to the California bill and does not have any exemptions in it, meaning agents in New York who are ICs may have to become full-time employees of the agency they work for or terminate their businesses.
New Jersey also introduced a bill regulating the independent contractor business model. ASTA is calling on travel advisors in New Jersey to “reach out to the State Senate and advocate for an amendment to the bill, which, as it stands, could eliminate the ability for travel advisors to act as independent contractors,” according to a recent Facebook post from ASTA.
The main reason for introducing these bills is to hold companies accountable to classify workers accurately and prevent them from passing on their business costs to taxpayers and workers. By classifying an employee as an IC, companies aren’t obligated to offer health insurance, pension, unemployment obligations and other employee benefits. They can also pay less in taxes. Though these are not reasons why the IC model is so popular and works so well in the travel industry.
ASTA’s success in securing an exemption for agents in California bodes well for New York and New Jersey, as they now have a legal precedent to refer to when stating their case for the new bills.