California IC Bill: State Senate Could Vote on Bill July 3

Man signing law
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Both the American Society of Travel Advisors (ASTA) and the California Coalition of Travel Organizations (CCTO) are urging advisors to take action regarding AB 5, a bill that would change how independent contractors (ICs) in the state of California are defined, resulting in a complete shakeup in the way agencies are run. If the bill is passed, tens of thousands of ICs—across a spectrum of industries—will lose their jobs and “countless” travel agencies will lose business and/or go out of business, the CCTO says.

According to ASTA, the California Senate could be voting on the bill as soon as Wednesday, July 3. Last month, the California Assembly passed legislation (AB 5) to "codify" the holding in the Dynamex decision by a vote of 59 to 15.

The proposed bill would require California travel agencies to convert their ICs into full-time employees. Workers would then be eligible for benefits, such as unemployment insurance, paid parental leave, overtime pay, and workers’ compensation, driving up expenses for travel agencies. The ICs would also lose the ability to set their own hours, schedules and rates; select the customers with whom they will work; market their own brands; affiliate with more than one host agency and more.

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“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 on its Advocacy page.

The CCTO adds, “During the floor discussion, prior to the passage of AB 5 by the state Assembly, the bill's author, Assembly Member Lorena Gonzalez, reiterated her intention to address additional industries and situations with amendments, as the bill moves forward. But, so far, nothing has changed.”

On ASTA’s Advocacy Portal, advisors can send auto-generated messages to their respective state senator telling them to vote against the bill. The CCTO also provided a link for finding your state representative to send additional messages.

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