The California travel trade is being urged to fight Assembly Bill 5, which could have a chilling effect on the travel agency business model.
An urgent call has been made to mobilize and show a wave of support for the role of independent contractors.
The California Assembly passed the bill which could severely restrict the ability of California businesses to use IC’s, which goes far beyond just the travel industry.
Industries which rely on independent agents such as Insurance and real estate have been given an exemption, and a grass roots effort spearheaded by ASTA is seeking such an exemption for the travel trade.
ASTA is working with the California Coalition of Travel Organizations, consortia and host agency partners to urge as many Californians as possible to call on their their state senators to amend the bill.
California will impose the so-called ‘ABC Test’ to differentiate an employee from an IC. Of most concern for the industry is the requirement ‘that the worker performs work that is outside the usual course of the hiring entity’s business.’
An IC selling travel would very likely fail the ABC Test based on this wording, which has wide-ranging ramifications across the industry in California.
That could make agencies liable for a host of employee expenses, such as worker’s pay, overtime and parental leave. The likelihood is that many would not be taken on as permanent staff due to high onboarding costs.
"It is critical that this legislation be amended to protect the independent advisor model that has existed in our industry for decades and provides opportunities for thousands of small business owners," ASTA says.
ASTA and the California Coalition of Travel Organizations are working hard to secure an exemption. All industry players as well as California residents are urged to act now and help force action from lawmakers to protect the current travel agency business model.
