ASTA says overtime rules could hurt travel agencies. // © 2016 iStock
Last month, the U.S. Department of Labor announced it was raising the threshold under which most full-time workers qualify for overtime pay, from $23,660 to $47,476. The American Society of Travel Agents (ASTA) has voiced concern that this will hurt small businesses, including travel agencies.
Why it Matters:
The Department of Labor hasn’t changed these standards in over a decade, and according to ASTA, the new regulations — which will go into effect Dec. 1 — would mean a significant restructuring of compensation at many agencies. For instance, the rule sets new regulations on the percentage that commission can contribute to a worker’s base salary of up to 10 percent of the new standard level. But industry experts say that agents often make more than 10 percent of their overall compensation in commission. ASTA is continuing to discuss the changes with the Department of Labor, as well as launching a series of webinars to educate members on the new rules.
- ASTA will hold its first webinar on the overtime rule on July 27 at 2 p.m. Eastern time.
- The Department of Labor hadn’t changed the standard salary level for overtime since 2004, when it was set at $455 per week or $23,660 a year.
What They Are Saying:
“We are disappointed with the Department of Labor’s final overtime rule, announced today, which will more than double the salary threshold below which workers will be eligible to receive overtime pay,” said Zane Kerby, president and CEO of ASTA. “While we believe employees should be compensated fairly, in the public comments we filed last September we expressed our grave concerns that an increase of this magnitude with little lead time will cause significant disruption to our members' business operations and the travel agency community as a whole, which will be felt ultimately by the traveling public.”