The DOT Policy Will Impact Airlines and Cruise Operators

Airlines Cash In as Flexible Work Changes Travel Patterns in the US

By Jim O’Neill and William D. Cohan

May 24, 2013

Airlines and cruise operators have been making and losing fortunes as well as many other things over the past decade and now the US Department of Transportation (DOT) has adopted a new policy regarding flexible work arrangements. Many carriers have been forced to reevaluate their business plans in light of the DOT policy.

The new requirements, implemented in March, require that carriers provide the same health, dental, and disability benefits for employees who use flexible work hours as those who can work normal hours, as long as the employer maintains the same level of medical or other benefits.

For example, if an employee’s job requires him to work normal hours but is open to accommodating a flexible work arrangement, the employer must provide the same level of benefits. That includes health insurance, dental, prescription drug and dental, and other job-related benefits. But the carrier is allowed to make some flexibility and charge employees the same, or less, than the company would for employees who had to work normal hours.

The DOT policy is an example of some key elements of the new administration’s economic plan for the US economy, which requires the government to cut regulations, reduce unemployment via a more generous welfare system and, in some instances, cut taxes or reduce the personal tax burden. The new regulations will be phased in over the next few years and a final rule will be promulgated in 2015.

The DOT regulation is expected to result in a net loss of $1.4 billion to the airlines in the next five years, according to a recent Bloomberg report. The DOT policy is designed to provide “more economic and financial certainty” to business and to protect consumers from unexpected health care costs for people who need to use their health benefits but aren’t able to use their full schedule and may opt to use fewer hours per week to work. It will have a major impact on the number of people who will opt to work fewer hours to make ends meet or to save money.

The new policy will be implemented in the private sector with the support of

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