Federal Legislation
Congress Amends FLSA for Direct Sellers and Real Estate Agents
February 11, 2026
Congress has passed H.R. 3495, the Direct Seller and Real Estate Agent Harmonization Act, which amends the Fair Labor Standards Act (FLSA) to exclude direct sellers and qualified real estate agents from the definition of "employee." This legislative change aligns FLSA with the Internal Revenue Code's treatment of these workers as independent contractors, thereby limiting FLSA wage-hour protections and enforcement actions for these categories of workers. The amendment impacts labor classification and compliance requirements for businesses operating in direct selling and real estate sectors, affecting how government agencies and contractors manage workforce classifications and related procurement policies.
- Why this matters: Procurement professionals should be aware that this change reduces FLSA coverage for direct sellers and real estate agents, potentially altering contractor labor cost structures and compliance obligations.
- Agencies and contractors engaging with direct selling or real estate services must reassess labor classification policies to ensure alignment with the updated legal framework.
- This amendment may influence contract terms, wage-hour compliance monitoring, and risk management strategies related to independent contractor engagements.
- Organizations involved in workforce compliance, labor law consulting, or related professional services may find new opportunities to support clients adapting to these changes.
The term 'employee' does not include any direct seller or qualified real estate agent (as such terms are defined in section 3508(b) of the Internal Revenue Code of 1986).
— H.R. 3495 text amendment
Agencies
Department of Labor, Wage and Hour Division, Committee on Education and Workforce, National Association of REALTORS, Direct Selling Association
Vendors
Amway, Herbalife, Mary Kay
Locations
Sources
- H. Rept. 119-494 - DIRECT SELLER AND REAL ESTATE AGENT HARMONIZATION ACT · congress · Feb 11
- H. Rept. 119-494 - DIRECT SELLER AND REAL ESTATE AGENT HARMONIZATION ACT · congress · Feb 11