Why two developments in Washington could reshape federal protections for direct sellers.
Direct selling is moving on two fronts in Washington.
In a major development, Senator Mike Lee has introduced Senate companion legislation to H.R. 3495, the Direct Seller and Real Estate Agent Harmonization Act. The bill would give qualifying direct sellers specific recognition under federal wage-and-hour law. Its introduction marks one of the most consequential Senate developments for the channel in decades and advances one of DSA’s two long-running priorities in Washington.
The other is advancing at the Department of Labor, which has submitted its draft final independent contractor rule for White House review, the final major step before publication.
Together, they put the same defining question before Congress and the administration: will federal law preserve the independent relationship on which direct selling is built?
That independence begins with choice. Direct sellers decide whether, when and how they participate. They determine the scale of their involvement and build customer relationships through their own efforts. Companies provide products, tools and support, but sellers decide how to put them to work in businesses of their own.
Redefine that relationship, and you change more than a company’s compliance obligations. You change how it can engage with its salesforce, how sellers can operate and whether the model can continue as intended.
The wrong law or rule could end the business model on which your company was built.
That risk begins long before a law or rule takes effect, while lawmakers are negotiating statutory language and agencies are defining employment. By the time a company sees the final text, the most consequential decisions may already have been made.
That is why DSA is standing watch.
DSA engages while those decisions are still being shaped: bringing direct sellers’ experiences into the process to show how direct selling works, challenging language that could mischaracterize the relationship between companies and sellers and advancing policies that recognize genuine independence.
The Senate introduction and White House review reflect years of that work.
In Congress, DSA has led the effort to secure specific recognition of direct sellers under federal wage-and-hour law. Congress has recognized qualifying direct sellers and real estate agents as independent contractors for federal tax purposes for decades. H.R. 3495 and its Senate companion would extend that recognition to the Fair Labor Standards Act.
At the Department of Labor, DSA has worked with channel leaders and the Utah Direct Selling Coalition to press for a standard that reflects how direct sellers operate. The Department’s February proposal addressed many of the concerns we raised, including the importance of an individual’s control over the work and opportunity for profit or loss.
The two paths reinforce each other. The Department’s rule would improve the broader standard used to evaluate independent work today. The legislation would give qualifying direct sellers specific recognition in federal law, so their status would no longer depend entirely on a general test that can change from one administration to the next.
Neither outcome is secured yet. The legislation must advance through Congress, and the Department’s final rule has not yet been published. DSA will review the rule’s final text closely and continue pressing for the recognition direct sellers need.
DSA’s responsibility is to ensure that direct selling is not legislated or regulated out of business. We are stewards of the business model our members have built, and we will continue protecting the independence at its foundation wherever laws and regulations are being shaped.
DAVE GRIMALDI is the CEO of the Direct Selling Association, known for bringing fresh energy and impactful leadership to one of America’s most influential trade organizations. With a distinguished career spanning advocacy, policy-making and strategic leadership, Dave is uniquely equipped to champion the direct selling community at every level. Under Dave’s direction, the DSA is leveraging his deep legislative experience, extensive Capitol Hill relationships and strategic foresight to elevate the direct selling profession’s advocacy.
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