California Governor Signs AB 5 With Travel Agency Exemption

California Governor Gavin Newsom has signed AB 5, a California bill that redefines how independent contractors are treated in the state, into law with an exemption for the travel agency industry intact. 

“CCTO is thrilled with this outcome, but we remain vigilant,” a spokesperson for the California Coalition of Travel Organizations (CCTO) tells Luxury Travel Advisor. “We expect that there will be multiple bills in January, which will seek to amend the law. We will be working hard to make sure that none of those bills negatively impact what we’ve managed to achieve by way of the travel industry exemption in AB 5.”

“As previously written, AB 5 threatened the business model of travel agencies in California that rely on ICs to sell travel, and securing an exemption for our industry was by far this biggest legislative challenge we have faced in recent memory,” says Zane Kerby, president and CEO for the American Society of Travel Advisors (ASTA). “Thanks to the hard work of California ASTA members and allies like the California Coalition of Travel Organizations, the Professional Association of Travel Hosts and our consortia and host agency partners, massive disruption to our industry in California and beyond has been avoided.”

Travel advisors were added to the bill’s 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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