New Act Strips Minimum Wage and Overtime Protections for Real Estate Agents and Direct Sellers

This new piece of legislation, titled the Direct Seller and Real Estate Agent Harmonization Act, makes a very targeted but significant change to federal labor law. It amends the Fair Labor Standards Act (FLSA)—the law that guarantees you minimum wage and overtime pay—to explicitly exclude two groups of workers: direct sellers and qualified real estate agents. Essentially, the bill codifies their status as independent contractors under federal labor law, meaning they are generally no longer considered "employees" for the purposes of wage and hour protections.

The Fine Print: Who Loses FLSA Coverage?

If you're a real estate agent or you work in direct sales (think multi-level marketing or door-to-door sales), this bill clarifies that your company does not have to pay you the federal minimum wage or overtime, no matter how many hours you work. The definitions for "direct seller" and "qualified real estate agent" are pulled straight from Section 3508 of the U.S. Code, which are the same definitions the IRS uses for tax purposes. For companies, this provides much-desired legal clarity, locking in a business model that relies on commission-only, independent contractor arrangements. They won't face lawsuits claiming these workers should have been treated as employees.

What This Means for Your Wallet and Your Schedule

For the millions of people in these two fields, the impact is straightforward: you are trading labor protections for flexibility. If your commissions are great, the independent contractor status offers tax benefits and scheduling freedom. However, if you are struggling to close sales or spending 50 hours a week training, driving, and meeting clients without closing a deal, you are no longer guaranteed the federal minimum wage floor. This is a risk transfer: the risk of low earnings shifts entirely from the employer to the worker. For a new real estate agent spending months working full-time hours just to get started, or a direct seller putting in long hours for minimal return, this bill ensures there is no federal safety net to catch them.

Clarity vs. Safety Net: The Trade-Off

While the bill does provide legal certainty for the industries involved—which they argue is necessary for their business models—it removes fundamental protections from a large segment of the workforce. For the workers themselves, the bill reinforces the reality that their income is purely commission-based and entirely dependent on sales, without the basic wage and hour protections afforded to traditional employees. This is a clear win for the companies seeking reduced payroll liability and a potential loss for agents and sellers who rely on the promise of a federal minimum wage when sales fall short.