Independent Travel Agencies

You may not think of this as important when vetting out your host agencies, but making sure the host agency follows the independent contractor rules of the government is as important of a question as how much it costs to join or what the commission split is. Being an independent contractor travel agent and an employee is important to differentiate.

Why Should Misclassification Concern You?

If the host agency is audited and found to have misclassified their independent contractor travel agents, the fines and back taxes add up to a huge price tag. It’s not pretty. A has a company that misclassed 18 workers getting a $328, 500 penalty bill. Most host agencies have more than 18 home based agents working under them. Catch my drift? A host agency that isn’t protecting themselves from misclassification could easily go bankrupt with fines this high.

Increased Audits

The government loses millions of dollars in taxes from misclassified workers. As the government continues to see record deficits, there has been a crackdown on independent contractor classification.

Independent Contractor Classification

I wish I could tell you independent contractor classification is cut and dry, but it’s murky waters. Beyond the fact that there is room for interpretation in the existing independent contractor laws, the laws vary by state and there are also the federal government’s independent contractor laws. However, your host agency should be well-versed in what they’re doing to protect themselves and their agent network so don’t be afraid to ask. In this case, knowledge is power. Being aware this is even an issue and properly screening your host agency is the first step. Next step, avoid any pitfalls by looking for major red flags. Be aware that you may not be an independent contractor if the host agency:

• Requires you work certain hours
• Requires you to be at a certain location
• Requires you work in a certain way
• Gives you benefits

Making sure your host agency has a written contract indicating that you are an independent contractor and your responsibilities is another foundation that is important to lay.