Washington Report

Advocacy Updates from Washington D.C.

NAR Supports New Legislation Protecting Independent Contractor Status

On September 12, 2023, the “Direct Seller and Real Estate Agent Harmonization Act,” (H.R. 5419) was introduced by Reps. Walberg (R-MI), Cuellar (D-TX), Cardenas (D-CA), and Moore (R-UT), on behalf of the millions of direct sellers and real estate agents around the country who are classified as independent contractors.

Qualified real estate agents and direct sellers have been defined as independent contractors under the Internal Revenue Code (“IRC”) for federal tax purposes since 1982. This language demonstrates the federal government’s long-standing recognition of the unique nature of the direct selling and real estate industries. Of the 1.5 million members of NAR practicing across the country, approximately 87% are classified as independent contractors. This important legislation would harmonize the Fair Labor Standards Act (“FLSA”) with the IRC so that direct sellers and qualified real estate agents are consistently defined as independent contractors across both statutes.

While the ability to work as an independent contractor is recognized and protected under the IRC and many state laws, class action and wage and hour lawsuits, new state legislation, and new federal rules expanding the definition of employee, continue to threaten a worker’s ability to be classified as an independent contractor. The United States Department of Labor is currently finalizing a rule on independent contractor status under the FLSA, which may result in unnecessary classification confusion. Aligning the FLSA with the IRC would ensure professionals in the real estate and direct selling industries can continue to operate their businesses and support economic growth with legal certainty.

NAR, alongside members of the Direct Selling Association (DSA), advocated for this legislation that supports the ability to work as an independent contractor in these industries, empowering entrepreneurship for more Americans.

Read the joint thank you letter (PDF: 95 KB) and the REALTOR® Magazine article for more information.

Stay tuned to nar.realtor/independent-contractor-status for the latest updates.