ASTAnews SPECIAL REPORT: LEGISLATIVE ROUND-UP DOL proposal could have big impact on agencies


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Eben Peck, ASTA’s SVP of government affairs, examines the impact of the DOL’s proposed overhaul of overtime regulations


ON JULY 6, the US Department of Labor (DOL) issued proposed updates to the regulations governing which employees are entitled to overtime pay protections under the Fair Labor Standards Act. Te most important change proposed by the DOL is to increase the salary level under which virtually all workers qualify automatically for overtime pay, from the current $23,660 to $50,440. Te proposal also calls for automatically


increasing this level annually, based on the Consumer Price Index or a similar mechanism. Tese rules apply to employees of all businesses that have an annual gross volume of sales of $500,000 or more. Given that average travel agency salaries fall


well below the new threshold, this proposal could prove extremely disruptive to our industry. First, agencies face the potential for sharply increased payroll costs. Beyond costs in extra pay, payroll systems will have to be updated to convert salaried employees to an hourly rate and track time. In the words of the Partnership to Protect Workplace Opportunity, of which ASTA is a member, “At a time when more and


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more workers seek additional flexibility in their schedules and an ownership stake in their work, the department’s proposal will return us to a 1940s mentality of clock-punching for all but the most highly paid employees. Tis result is bad for employees, bad for employers and bad for the economy.” Comments on the DOL proposal were due


September 4. In its filing, available for members to download on asta.org, ASTA warned that such sharp increase in employee overtime eligibility ‘will have an unsustainable negative impact on the travel agency industry. It will lead to significant diminution in employed workers and reduce the ability of consumers throughout the country to obtain the advice and other assistance of experts in the purchase of complex travel services.’ Te proposal will also lead to ‘reduced employment


opportunities for travel agents at a time when the industry is struggling to find young workers to enter the business and when the firms are already under increased financial pressure from regulatory changes imposed or threatened by both the Department of Transportation and the Department of Justice.’ ASTA requested that any significant change


in the overtime eligibility threshold ‘be accompanied by a thorough modernization of the exemption regulations and a phase-in of the threshold increase of at least five years.’ Te next step is for the DOL to review the


Such a sharp increase in employee overtime eligibility will have an unsustainable negative impact on the travel agency industry


almost 290,000 comments submitted from companies and individuals across the country and issue a final rule that could be effective as early as mid-2016. Tere is a chance that the rules could be challenged in court or through legislation in Congress but, given the department’s clear authority to set these salary levels and the current political balance between Congress and the Obama Administration, such challenges are likely to fail. Still,


ASTA will ensure it is on


hand to protect the travel agency community from the worst impacts of this proposal. Members should stay tuned to asta. org/AdvocacyAction for the latest updates and calls to action.


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