Congress moves to strip wage protections from millions of direct sellers and real estate agents

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.
• State wage-and-hour laws may still apply, but federal floor protections would be removed, creating a patchwork where workers in low-wage states lose all protections.
• The exclusion may incentivize reclassification of existing employees into direct-seller or real estate agent categories to avoid FLSA compliance costs.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Workers classified as direct sellers or qualified real estate agents lose federal wage-and-hour protections, including minimum wage and overtime guarantees. The bill shifts risk and cost to workers by allowing employers to classify them as independent contractors, reducing labor standards protections for a broad category of workers.

Who stands to gain

• direct-sales companies and multi-level marketing organizations
• real estate brokerages and franchises
• companies employing independent contractor sales forces

Named in the bill

Fair Labor Standards Act of 1938, Internal Revenue Code § 3508(b), direct sellers, qualified real estate agents, House Committee on Education and Workforce

Where it stands

31 cosponsors: 20 Republicans, 11 Democrats.

• May 19, 2025 — Introduced · Congress.gov: “Introduced in House”
• May 19, 2025 — Referred to House Committee on Education and Workforce · Congress.gov: “Referred to the House Committee on Education and Workforce”
• Sep 17, 2025 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
• Sep 17, 2025 — Reported out of committee · Congress.gov: “Ordered to be Reported (Amended) by the Yeas and Nays: 19 - 16”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

7 lobbying clients named this bill on 9 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $15,010,762 in lobbying spend. A filing names 3 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 86% of bills with at least one filing.

Kevin Kiley, the sponsor, reported $400,510 in PAC receipts in the 2026 cycle.

• National Association of Realtors — $14,580,000 on 1 filing
• Alticor Inc — $310,000 on 2 filings
• California Association of Realtors — $70,762 on 1 filing
• Doterra International LLC — $20,000 on 1 filing
• Usana Health Sciences Inc. — $20,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.