The Direct Seller and Real Estate Agent Harmonization Act (H.R. 3495) represents a critical step forward in clarifying the status of direct sellers and real estate agents under U.S. labor laws. Recently passed out of the committee by the House Committee on Education and the Workforce, the bill aims to solidify the independent contractor status of these workers under the Fair Labor Standards Act (FLSA), aligning federal law with existing tax code definitions.
The passage of H.R. 3495 out of committee has been hailed as one of the most significant legislative wins for the direct selling industry in over 40 years. The bill’s primary objective is to confirm that direct sellers and real estate agents are independent contractors, not employees, ensuring that their status remains consistent with the Internal Revenue Code (IRC).
This legal clarity is expected to reduce confusion regarding worker classifications and protect the entrepreneurial freedom of millions of Americans in the direct selling and real estate sectors.
A key force behind the advancement of H.R. 3495 is the Direct Selling Association (DSA), led by Dave Grimaldi. The DSA, which represents more than 100 companies in the direct selling industry, has been instrumental in promoting the bill. Through direct advocacy efforts, including the Direct Selling Day on Capitol Hill, 85 direct sellers and executives from 14 DSA member companies met with over 100 elected officials to push for the bill’s passage. These efforts were a crucial part of ensuring that lawmakers understood the importance of supporting independent entrepreneurship.
The direct selling industry plays a vital role in the U.S. economy, contributing $34.7 billion in annual retail sales. Beyond the direct sales, the industry generates a $111 billion total economic impact and $15.5 billion in tax revenue. By advocating for H.R. 3495, the DSA aims to reinforce the economic power of the industry while maintaining a regulatory framework that allows independent entrepreneurs to thrive.
H.R. 3495 is expected to have profound impacts on the direct selling and real estate sectors by clarifying the legal status of workers in these industries. The bill aligns federal law with the IRS’s definition of independent contractors, reducing legal ambiguity and ensuring that direct sellers and real estate agents are recognized for what they truly are: independent entrepreneurs.
This certainty will allow businesses to focus on growth without worrying about misclassification, fostering a stronger entrepreneurial ecosystem.
At the heart of H.R. 3495 is the commitment to supporting micro-entrepreneurs—individuals who rely on direct selling or real estate for their livelihood. The DSA’s advocacy for this bill highlights the need for a regulatory environment that supports innovation, consumer protection, and the freedom of entrepreneurship.
The bill emphasizes that independent contractors contribute significantly to the economy and should continue to enjoy the flexibility that independent work offers.
H.R. 3495 represents a historic shift in the legal landscape for direct sellers and real estate agents, offering them a more secure and certain path forward. By ensuring that these individuals are classified as independent contractors under the Fair Labor Standards Act, the bill seeks to reduce legal uncertainty and strengthen opportunities for entrepreneurial success.
The Direct Selling Association’s ongoing support and advocacy for this bill underscores the importance of protecting micro-entrepreneurs and promoting a regulatory environment that champions innovation and freedom. As the bill moves forward, it could mark a critical turning point in how the U.S. views and supports independent workers across various sectors.
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