Committee advances bill clarifying independent-contractor status of direct sellers and real estate agents under FLSA

The House Committee on Education and Labor voted to report HR 3495, the Direct Seller and Real Estate Agent Harmonization Act, to the House after adopting an amendment in the nature of a substitute.

Representative Wahlberg (speaking as chair in the bill explanation) said the legislation would adapt the Fair Labor Standards Act’s definition of “employee” for direct sellers and qualified real estate agents to match longstanding tax-code treatment, ensuring those workers are treated as independent contractors under the FLSA.

Opponents, including members who asked for hearings and analysis, said the committee had not held a hearing on the bill and that it appears to carve out occupations categorically from the FLSA. Representative Macbeth, Representative Manion, and Representative Scott raised concerns that the change could be unnecessary for many real estate professionals and direct sellers and could open the door to unintended consequences for other workers who perform similar tasks.

Supporters argued the bill provides certainty to millions of independent contractors and preserves a business model relied on by real estate agents and direct sellers. Opponents warned that the FLSA already includes exemptions and that categorical exclusions could weaken workers’ access to minimum wage, overtime and other employment protections under particular fact patterns.

The committee adopted an amendment in the nature of a substitute and the chair moved to report HR 3495 to the House. A recorded vote returned a tally of 19 yeas and 16 nays; the committee’s motion carried and the bill will be sent to the House.

Debate emphasized the lack of prior committee hearings, differing views on the scope of the problem the bill purports to fix, and potential impacts on brokers and workplace control in the real estate industry.