Push continues for legislation to help independent contractors in California

The California Coalition of Travel Organizations (CCTO)
continues to work on behalf of members to lobby for legislation that would make
it easier for agencies to classify workers as independent contractors (ICs).

Earlier this year,
the California Supreme Court ruled in the case of Dynamex Operations West Inc.
v. Superior Court of Los Angeles County that courts, when evaluating wage
claims, can no longer apply a common-law test when determining whether a worker
is an employee or an IC. 

The common-law test, employed by many states and the
Internal Revenue Service, entails considering a number of factors to determine
a worker’s status. Instead, California courts now must apply an “ABC Test,”
under which it’s more difficult to classify a worker as an IC. The ABC Test has
three parts, and for travel agencies, the second part is the most problematic.
It dictates that to be called an IC, a worker must perform work outside of the
hiring entity’s usual course of business.

The CCTO has been lobbying for legislation that would change
the law to be more favorable to agents who want to classify as ICs. It has also
joined another coalition of affected industries, the I’m Independent Coalition, which is also petitioning the legislature to
change the law established with the Dynamex decision.

At the end of August, the CCTO and members of the I’m
Independent Coalition made a concerted effort over several weeks to lobby
legislators and the governor’s office to change or put on hold the Dynamex
decision, according to Jerry Desmond, and attorney with Desmond & Desmond
and legislative advocate for the CCTO.

No legislation emerged from that effort, he said, but a
resolution
was introduced that urged the governor to suspend the Dynamex decision and
convene a special session to amend the decision. 

No action was taken on the resolution, Desmond said, but the
CCTO is hopeful those lobbying efforts will pay off when the legislature
reconvenes in 2019.

“In effect, we’ve raised the awareness of many
legislators,” Desmond said. “There are many who, we think, are
telling us that there’s concern about the impact of the Dynamex decision on
many businesses and the ability of workers who like to be independent, to
continue to work as independent agents, independent contractors.”

Diane Embree, president of the CCTO, owner of Bali Barong
Tours in Westlake Village, Calif., and an IC with Michael’s Travel Center, said
the coalition is hopeful action will be taken next year.

“Obviously we don’t know for certain, but we are
expecting that there will be a bill or multiple bills introduced with regard to
the Dynamex decision, because the number of industries that reaches is so far
flung it’s incredible,” she said.

The I’m Independent Coalition estimates there are 2 million
ICs working in California in all industries.

“Two million is a lot of workers who could potentially
have their livelihoods affected, and we know that in the travel industry just
in California, there are thousands [of ICs],” Embree said.

The issue remains the No. 1 concern for the CCTO going
forward. “Everything else is going on the backburner at this point,”
Embree said.

While some legislators have given the coalition positive
feedback, Embree said, organized labor in the state is strong and remains a
hurdle to overcome. But, Embree said, especially in travel, workers who are ICs
have chosen to be such, and most times do not want to be classified as
employees.

Going forward, Desmond said the CCTO will provide members
with resources and information to approach legislators in California to ask for
help.

Legislators will reconvene for a few days starting Dec. 3
before breaking for the holidays. The CCTO is hoping action will be taken in
2019.

ASTA has been working to harmonize the number of tests used
to determine whether a worker is an employee or an IC at the federal level. 

General counsel Peter Lobasso recently spoke to the topic
during the Professional Association of Travel Hosts’ annual conference, stating
that a bill was introduced last year. If it was adopted, Lobasso said, the IRS’s
common-law test would be adopted across all federal agencies; ASTA continues to
lobby for its passage.

Lobasso also addressed the situation in California, and said
given the Dynamex decision’s impact on so many industries, there is a
reasonable chance a legislative fix will be attempted. ASTA is supportive of
the CCTO’s work, he said.

 

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