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Freedom Fridays

February 8, 2019 – Letting Bookers Book

FF

While Arizona weather may be beautiful this time of year, that is not the case for those living in much of the rest of the country.  When temperatures are cold, Americans travel in droves to the warmer-weather states—including, of course, our own—and bring with them some much-appreciated tourism dollars. 

Travel agencies are more than happy to facilitate those trips, but their efforts have unfortunately been complicated by an unreasonable Department of Labor (DOL) restriction.

 

What is the problem?

The Fair Labor Standards Act generally mandates that employers must grant overtime pay to employees who work more than 40 hours per week.  However, certain industries are eligible for an exemption from overtime regulations if:

  • They are engaged in retail activities;
  • They dedicate no more than 25 percent of their annual sales to resale; and
  • They pay employees at least one-and-a-half times the applicable minimum wage, and the employees themselves receive over half their earnings from commissions.

Even though many travel agencies could easily be structured to qualify for an exemption on these grounds, the DOL took the inexplicable step in 1970 of categorically blocking the entire sector from utilizing it, arguing—cryptically—that travel agencies “lack a retail concept.”  That nonsensical restriction remains in place today.

If travel agents aren’t engaged in a retail activity, then what exactly are they doing when they sell airline tickets or book a hotel room?  In 1997, the travel agency blacklisting was challenged in federal court, which determined that the DOL’s targeted restriction was “arbitrary” and “made without any rational basis.”

 

Why should the travel agency blacklisting be eliminated and what am I doing about it?

Travel agency employers should be able to structure their own operations and payroll as freely as possible, and I am not convinced that industry employers would be inclined to take advantage of employees if they were no longer subject to the DOL’s arbitrary restrictions.  Instead, I believe that most travel agents enter the profession knowing that they will occasionally have to work long or unpredictable hours, and can usually expect to be compensated accordingly.

Last year, I cosigned a bipartisan letter to the DOL led by my colleague Congressman Francis Rooney (R-FL) urging the agency to end the travel agency blacklisting.  In the coming weeks, I will also be cosponsoring legislation to achieve the same result.