California IC Bill Passes With Travel Agent Exemption

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AB 5, a bill that would redefine how independent contractors are defined in the state of California, has passed the state’s Assembly and Senate with an exception for travel advisors intact. The bill now heads to California Governor Gavin Newsom, who has previously expressed support for the legislation. 

The California Coalition of Travel Organizations (CCTO) tells Travel Agent says that the governor must sign, veto or let the measure take effect without action by October 13. If it becomes law, the bill will go into effect January 1, 2020. 

Eben Peck, executive vice president, advocacy for the American Society of Travel Advisors (ASTA), tells Travel Agent that the bill was passed with “only a small change” to the Professional Services exemption that covers travel advisors, among other industries, and that the change works in travel advisors’ favor. 

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“[The change] allows ICs to perform services at the engaging party’s location as long as they ‘maintain a business location, which may include the individual’s residence, that is separate from the hiring party,’” Peck says. 

Travel advisors were added to the Professional Services exemption shortly before Labor Day following an intensive grassroots campaign by the CCTO, ASTA and California travel advisors and travel agencies. Two hundred and thirty people participated in a joint lobbying day, while 2,752 people called or emailed legislators through ASTA’s advocacy portal. 

As previously written, the bill had threatened the independent contractor model for travel advisors in California, requiring California travel agencies to convert their independent contractors to full-time employees – something that a majority of both independent contractors and agency owners said that they would not do. 

The exemption means that independent travel advisors in California will be covered under the preexisting standard, so long as they are in compliance with the California Seller of Travel law, either by registering or qualifying for the exemption from the registration requirement. 

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