Sponsors (32)
The bill reduces costs and compliance burdens for businesses that use direct sellers and certain real-estate agents by treating them as independent contractors, but it does so by stripping those workers of wage-and-hour protections and benefits and increasing the potential for classification disputes.
Small businesses and brokerages that use direct sellers or commission-based real estate agents will pay lower labor costs because those workers are treated as independent contractors (no employer overtime/minimum-wage obligations, payroll taxes, or employer-side benefit contributions).
Firms that rely on direct sellers or commission-only agents face fewer FLSA compliance requirements and reduced liability risk from wage-and-hour claims.
Direct sellers and qualifying real-estate agents will lose FLSA protections and many employer-provided benefits — exposing those workers to no guaranteed minimum wage or overtime, higher out-of-pocket tax/benefit costs, and less job security.
Narrowing the FLSA worker definition could increase misclassification disputes and shift the burden of resolving disputes and enforcement to the Department of Labor and courts, creating legal uncertainty for workers, employers, and state governments.
Based on analysis of 2 sections of legislative text.
Official title: To amend the Fair Labor Standards Act of 1938 to clarify the definition of employee as it relates to direct sellers and real estate agents, and for other purposes.
Introduced May 19, 2025 by Kevin Kiley · Last progress May 19, 2025
Excludes "direct sellers" and "qualified real estate agents," as those terms are defined in the Internal Revenue Code, from the Fair Labor Standards Act (FLSA) statutory definition of "employee," narrowing who is covered by FLSA wage and hour protections. It also sets an official short title for the Act (short title not repeated here).