Congress moves to strip wage protections from millions of direct sellers and real estate agents
H.R. 3495 — Direct Seller and Real Estate Agent Harmonization Act · Filed by Kevin Kiley (I-CA) · 31 cosponsors · Introduced May 19, 2025 · Reported out
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What it does
This bill amends the Fair Labor Standards Act to exclude direct sellers and qualified real estate agents from the legal definition of 'employee.' By referencing the Internal Revenue Code's definitions, it means these workers would not be entitled to federal wage-and-hour protections (minimum wage, overtime, paid breaks) that apply to regular employees. The bill benefits direct-sales companies and real estate brokerages by allowing them to classify these workers as independent contractors rather than employees.
Why we flagged it
The bill's operative mechanism is a narrow exemption from federal wage-and-hour law for two specific worker categories. It does not expand protections or create new rights; it removes existing legal protections from a defined class of workers, benefiting employers in those sectors.
What the text implies
- Workers in direct sales and real estate may lose access to overtime pay, minimum wage guarantees, and mandatory rest breaks — protections that have applied to them under current FLSA interpretation.
- The bill references IRC § 3508(b) definitions without restating them, meaning the scope of the exclusion depends entirely on how the IRS defines 'qualified real estate agent' and 'direct seller' in the tax code — changes to those definitions would automatically change labor protections.
The full analysis lists 4 implications of this text.
Who stands to gain
direct-sales companies and multi-level marketing organizations; real estate brokerages and franchises; companies employing independent contractor sales forces