ASTA Opposes Employee Classification Rule Change

The American Society of Travel Advisors is urging the U.S. Department of Labor to scrap a proposed new rule on independent contractor classification, claiming it will create more ambiguity around determining who is an employee and who is an independent contractor.

The DOL’s proposed rule, announced in October, would overturn a rule issued near the end of the Trump administration that cut determination of a worker’s status to only two factors: how much control the worker has over their work—such as setting their hours and choosing projects—and how much the worker’s earnings are dependent on their time or skills investment. Other factors, such as required skill level for the job or whether work is part of an “integrated unit of production,” receive less weight.

The new rule would “ensure that all factors are analyzed without assigning a predetermined weight to a particular factor or set of factors,” according to DOL, and reduce misclassification of employees.

In a December letter as part of the public comment period on the proposal, ASTA encouraged DOL to stick to the 2021 rule, which it said provided needed clarity in the process.

“A return to an unstructured totality-of-the-circumstances interpretive approach where no single factor predominates in the analysis practically ensures that the decades-long confusion among stakeholders and inconsistency among the federal circuits interpreting the [Fair Labor Standards Act] … will only continue,” ASTA SVP and general counsel Peter Lobasso said in the filing.

Among ASTA members, three-quarters of agencies work with at least one independent contractor, and agencies who use them average 12 contractors per agency, according to Lobasso. In total, independent contractors account for about 40 percent, or nearly 65,000 contractors, of the total industry workforce, he said.

The DOL will issue its final rule in mid- to late 2023, according to ASTA.