HR 3495: Direct Seller and Real Estate Agent Harmonization Act

HR 3495 in plain English: This bill would exclude real estate agents and direct sellers of consumer products from being classified as employees under the Fair Labor Standards Act (FLSA). As a result, these workers would not be subject to FLSA requirements such as federal minimum wage and overtime pay protections.

Stated purpose

This bill aims to clarify that real estate agents and direct sellers of consumer products are not considered employees under the Fair Labor Standards Act, aligning the FLSA's definition with how these workers are already classified under the tax code.

Key points

• Excludes real estate agents from the FLSA definition of 'employee'
• Excludes direct sellers of consumer products from the FLSA definition of 'employee'
• Workers excluded from FLSA employee status are not entitled to federal minimum wage or overtime pay under that law

Arguments supporters make

• Real estate agents and direct sellers already are treated as independent contractors under the tax code, so this bill simply makes federal labor law consistent with that existing classification instead of creating confusion.
• Most real estate agents and direct sellers set their own hours and work independently, so applying employee wage rules to them does not match how they actually work and could disrupt flexible business arrangements they prefer.
• Bringing the FLSA in line with the tax code removes legal uncertainty for businesses and workers alike, making the rules clearer for everyone.

Arguments opponents make

• Removing minimum wage and overtime protections leaves real estate agents and direct sellers with no federal wage floor, which could allow companies to underpay workers who have little bargaining power.
• Some direct sellers and real estate agents may function more like employees in practice — working set hours or under close supervision — and a blanket exclusion denies them protections they may genuinely need.
• Using the tax code's definitions to determine labor rights sets a precedent that could weaken worker protections in other industries, since tax classifications were not designed with wage protection in mind.

Tradeoffs

The bill trades federal wage and overtime protections for these workers in exchange for regulatory consistency and flexibility for independent working arrangements; the core tension is between protecting potentially vulnerable workers from wage exploitation and avoiding rules that may not fit workers who operate as their own bosses.

Current status in Congress: In committee.

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