DSA-Impact

DSA represents the direct selling business model at the federal and state level. We continue championing policies that would clearly define our salespeople as independent contractors and consumer protection legislation that would clearly define ethical business practices. DSA supports policies that protect and promote the businesses of millions of Americans.

DSA Lobbying Success

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Federal

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H.R. 3522, The Preserving Direct Seller Independence Act

In June, Rep. Tim Walberg (R-MI) and Rep. Josh Gottheimer (D-NJ) introduced H.R. 3522, the Preserving Direct Seller Independence ActThey were joined by Rep. John Curtis (R-UT)Rep. Ben McAdams (D-UT)Rep. Henry Cuellar (D-TX)and Rep. Lance Gooden (R-TX).

The legislation would clearly define direct sellers as independent contractors under the Fair Labor Standards Act (FLSA) by incorporating language from the Internal Revenue Service Code in place for over 35 years.

The introduction of this legislation with a bi-partisan group from across the United States was a major initiative for the Government Relations Committee and Independent Contractor Working Group. It builds upon longstanding success in 40 states that define direct sellers as independent contractors that has been and will continue to be a priority for DSA.

This comes at an extremely important time as Congress explores companies in the gig/sharing economy that are utilizing independent contractors in new and different ways. Bi-partisan support of language differentiating our use of independent contractors from those in the new economy is vital to ensuring that our model and independent salespeople are protected. Enactment of legislation on Capitol Hill for all legislation remains difficult, but the bill will ensure a clear alternative is presented and allows DSA and our members to have a clear position in conversations.

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Removal of Problematic Language from National Defense Authorization Act

In July, the United States House of Representatives passed the National Defense Authorization Act (NDAA) with an amendment offered by Rep. Robin Kelly (D-IL) that would have instructed the Department of Defense to provide a report detailing programs they provide to military members and their spouses on the “risks of multi-level marketing.”

During conference negotiations with the United States Senate, that would ultimately produce a final bill, DSA spoke with members of Congress integral to these negotiations to ensure the language did not make it into the final bill passed by Congress in December.

State

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DSA had lobbying success in seven states all across the country in 2019. The DSA team along with the great support of our members in state capitols passed and defeated legislation ensuring our businesses and that of our salespeople continue to thrive. 

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Arkansas Anti-Pyramid

In March, Arkansas became the 25th state with DSA-supported anti-pyramid legislation.

The language is consistent with the 2004 Council of State Governmentsmodel legislation supported by DSA that clearly delineates between illegal pyramid schemes and legitimate direct selling companies.

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California Independent Contractor

DSA gained an exemption under California Assembly Bill 5, which codified the 2018 California Supreme Court decision Dynamex into statute.  Without the exemption, the bill would have created an uncertain framework for more than 2.2 million Californians involved in direct selling. 

The language in the bill incorporates state Unemployment Insurance Code Section 650, which has classified direct sellers as independent contractors for over 20 years.

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Illinois Cooling Off

DSA worked with contacts in Illinois to successfully amend a bill that would have required all sales occurring in the home to consumers age 65 years and older would have a 15 day right of cancellation as opposed to federal standard and that in many states of 3 days.

The bill as amended only applies to home contractors.

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Indiana Independent Contractor

In April, Indiana signed legislation into law that clearly defines direct sellers as independent contractors under all state wage and hour laws.

The language is similar to the direct seller provision under the federal Internal Revenue Code 26 USC § 3508. 39 states now clearly define direct sellers as independent contractors under the unemployment insurance code.

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Massachusetts Independent Contractor

In May, the Massachusetts Department of Family and Medical Leave issued guidance that would have required entities with more than 50 1099-MISC individuals in the state would be subject to reporting and contribution requirements.

DSA worked with the Massachusetts Department of Family and Medical Leave to ensure direct sellers were not covered by these provisions. In July, they issued guidance that individuals who are independent contractors under the unemployment compensation law in the state are not covered by the Paid Family and Medical Leave Act.

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New Jersey Independent Contractor

In November, only weeks prior to the new legislature convening in January a bill was introduced in New Jersey that would have codified the ABC test into state statute.

DSA opposed the bill and was part of a broad business coalition ensuring it did not pass.  

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Washington Independent Contractor

DSA worked with a business coalition in Washington state to stop legislation that would have imposed the strict ABC test and a presumption of employment on all independent contractors in the state. Instead, a working group was convened to study the issue.

Federal Trade Commission Engagement and Updates

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June Meeting with FTC Chairman Simons

In June, Joe Mariano and Adolfo Franco were joined by Peter Marinello, Vice President of the Council of Better Business Bureaus and Executive Director of the Direct Selling Self-Regulatory Council and Lee Peeler of the Advertising Self-Regulatory Council in a meeting with Joseph Simons, Chairman of the Federal Trade Commission at the FTC Headquarters in Washington, D.C. 

Mr. Peeler and Mr. Marinello provided an overview of the DSSRC and its initial six months of operations. They also described the transparency measures the DSSRC will use to provide insight into the program’s activities to foster consumer awareness as well as promote accountability among direct selling companies. Chairman Simons and the staff were highly engaged in the discussion, inquiring as to the number of actions, the degree of participation from the industry as well as financial support of the program from direct selling companies. Chairman Simons was laudatory of the program and expressed interest to receive reports on the DSSRC’s progress in the months ahead. 
 
DSA offered an overview of direct selling and its contributions to the growth of the American economy, and also discussed the Commission’s enforcement posture and views of the industry. 

Chairman Simons underscored he did not want uncertainty or instability in the marketplace.

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October Meeting with FTC Associate Director of Marketing Practices Lois Greisman

In October, DSA met with Lois Greisman, Associate Director of Division of Marketing Practices of the FTC.  Ms. Greisman reaffirmed that the FTC considers direct selling and multi-level marketing compensation plans to be legitimate, irrespective of the number of levels in such plans, provided that compensation is based on the sale and consumption of products and services by ultimate end users, and not based on recruitment unrelated to sales and consumption. 

However, if such compensation types effectively reward, encourage, or incentivize product purchases without regard to sales to ultimate consumers, they will be considered indicative of recruitment-based compensation and pyramiding.

Ms. Greisman also noted that ultimate consumers could include salespeople, and that internal consumption of product is legitimate.  But, a plan that depends significantly or exclusively on sales to those within the network might not be sustainable and could be rewarding salespeople for recruitment rather than product sales to ultimate users.

Department of Labor

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DSA Signs Pledge for America’s Workers

In July, Executive Vice President Adolfo Franco signed the Pledge for America’s Workers at the United States Department of Labor on behalf of DSA.

The pledge is a priority of the Trump Administration and commits DSA to working with its member companies to invest in the advancement of current and future workforce by providing individuals with opportunities to develop skills that will help them succeed in their careers.

Over the coming five years, DSA will find ways to work with its membership to create new opportunities for 200,000 individuals through training that help salesforce members advance their businesses. 

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DSA Meets with Senior Officials from Department of Labor Wage and Hour Division

In December, DSA met with senior officials from the United States Department of Labor Wage and Hour Division including Deputy Administrator Keith Sonderling.

The Wage and Hour Division is the primary agency of the federal government implementing policies on independent contractors.

Deputy Administrator Sonderling expressed his gratitude for the opportunities provided by direct selling and agreed to work with DSA to clarify independent contractor status.

Direct Selling Advocacy Center

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DSAC

DSA seeks to increase the involvement of DSA member companies and their distributors in advocacy by engaging directly with elected officials. DSA worked on many events this year to facilitate those conversations through a combination of corporate visits and district events with salesforce.

Company Visits

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Rep. Raja Krishnamoorthi (D-IL) Visit to Pampered Chef

In February, United States Congressman Raja Krishnamoorthi (D-IL) visited The Pampered Chef in Addison, IL.

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Rep. Richard Hudson (R-NC) Visit to ACN

In April, United States Congressman Direct Selling Caucus Co-Chair Rep. Richard Hudson (R-NC) visited ACN, Inc. in Concord, NC.

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Rep. Andy Barr (R-KY) Visit to Scentsy

In August, to get a first-hand view of business activity in his district, United States Congressman, Andy Barr (R-KY) met with employees at the Scentsy warehouse facility in his hometown of Lexington, Kentucky.

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Rep. Virginia Foxx (R-NC) Visit to Princess House

Also during the August recess, United States Congresswoman Virginia Foxx (R-NC) visited the 60 employees at the Princess House Distribution Center located in Rural Hall, NC.

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Rep. Greg Stanton (D-AZ) Visit to Isagenix

In November, Isagenix hosted Rep. Greg Stanton (D-AZ) at their headquarters in Gilbert, AZ. In addition to a meeting with several Isagenix executive leadership team members including CEO Travis Ogden, CLO Justin Powell, CSO Joshua Plant, and Interim CIO Gary Gallant.

Women's Entrepreneurship

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Women’s Entrepreneurship Roundtables with Members of Congress

DSA hosted two women’s entrepreneurship roundtables with Members of Congress.

Representative Debbie Lesko (R-AZ) and Rep. Cathy McMorris Rodgers (R-WA) sat with direct sellers in their districts to hear stories from salesforce and discuss women getting involved in entrepreneurship, and the importance of family, freedom and flexibility to operate independent businesses.

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Direct Selling Caucus Women’s Entrepreneurship Briefing

In December, the Congressional Direct Selling Caucus hosted a luncheon briefing titled, “Women’s Entrepreneurship and Direct Selling: A Pathway to Independent Business,” in Washington, D.C. Attendees learned more about the benefits of direct selling for women entrepreneurs including flexibility, the importance of independent work and the ability to learn from a community of peers.

Events

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DSA seminars and events are also a forum to provide companies with opportunities to engage in advocacy and learn from policymakers how to best make our businesses thrive in the marketplace.

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Direct Selling Day on Capitol Hill

In September, direct selling executives and independent salesforce members from across the U.S. met with legislators for DSA's Annual Direct Selling Day on Capitol Hill.

More than 125 people representing 19 DSA member companies met with Members of Congress to emphasize the importance of protecting independent workers and discuss how direct selling offers a flexible, and low-risk pathway to entrepreneurship for millions of Americans.

Attendees urged almost 100 Members of Congress to consider the implications and importance of maintaining the independent contractor status for all direct sellers. Emphasizing that direct selling offers individuals a low-risk way for to participate in today’s fast-growing economy.

We hope to see many of you at our 2020 Direct Selling Day on Capitol Hill!

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Fall Legal and Regulatory Conference

On October 7-8, the Direct Selling Association (DSA), hosted its annual Legal and Regulatory Seminar in Washington, D.C.  The seminar brought together industry leaders to discuss legal and regulatory issues impacting the direct selling business and how companies and the Association are best positioned to respond.

Attendees heard from Andrew Smith, Director of the Bureau of Consumer Protection at the Federal Trade Commission while also discussing enforcement procedures and standards DSA is working with the FTC to clarify.

A wide range of other government officials from departments and agencies with jurisdiction over issues important to direct selling addressed the more than 130 attendees. Sharon Lindan Mayl, Senior Advisor for Policy, Office of Food Policy from the Food and Drug Administration presented the current legal status and the agency’s path forward on use and consumption of CBD; Nazak Nikahtar, Assistant Secretary for Industry and Analysis, United States Department of Commerce, International Trade Administration, updated attendees on trade agreements and the administration’s trade policy; and Alison Kilmartin, Deputy Assistant Secretary for Policy, United States Department of Labor listed the impressive accomplishments of the department on independent work and upcoming actions.

The Seminar also had a discussion of independent work from founding members of the Coalition for Workforce Innovation; legal thought leaders discussed recent FTC enforcement actions; direct selling-focused attorneys discussed pressing legal issues; independent work professionals discussed updates on independent contractor status; and the Direct Selling Self-Regulatory Council (DSSRC) examined the first year of the program and next steps.  

In addition to the content-rich program, industry General Counsels and company compliance leads were able to participate in roundtable discussions discussing what’s keeping them up at night and how they are addressing these issues.

Political Engagement

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DSA-Pac

The Direct Selling Association Political Action Committee’s primary goal is to support and enhance the effectiveness of the Direct Selling Association’s (DSA’s) lobbying and political advocacy efforts.

By collecting voluntary political contributions, members of DSA are able to pool their resources to educate and ultimately gain support from federal legislators for the Association’s policy positions.

The goal is to have $2,500 in individual contributions by every member company. This will be extremely important in the 2020 election year.

We would like to thank those individuals that donated to DSAPAC or supported events in 2019:

  • AdvoCare PAC
  • Alticor PAC
  • Isagenix PAC
  • Nu Skin PAC
  • Deborah Ashford, Hogan Lovells
  • Henri Bonan, The HB Group
  • Dan Chard, Medifast
  • Mike Christensen, Visible Supply Chain Management
  • Angela & Phil Chrysler, Team National
  • Dee Corry, Visible Supply Chain Management
  • Ted Dion, E.A. Dion
  • Steve Elshoff, Mills James
  • Marjorie Fine, Shaklee
  • Alexis Ginn, Primerica
  • Paul Greenberg
  • Kevin Guest, USANA Health Sciences
  • David Holl, Mary Kay Inc.
  • William Kinney, METRICS GLOBAL
  • William Le, Robinson Pharma
  • Pratik Malviya, PAWTREE
  • Michael Moad, Senegence International
  • Walter Noot, USANA Health Sciences, Inc.
  • Travis Stock, DirecTech Labs
  • Tyler Vissers, Robinson Pharma
  • John Whelpley, CUTCO/VECTOR
  • Travis Wilson, Noonday Collection

Click below for more information on DSAPAC and DSA political programs.

Learn more

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Special thank you to DSA’s 2020 Engage Supplier Partners for their generous support

Cvent-Sponsor
Global-Access-Sponsor
iacono-sponsor
InfoTrax-Sponsor
Jenkon-Sponsor
MIG-Sponsor
MW2-Sponsor
PCNametag-Sponsor
Robinson-Pharma-Sponsor
Thatcher-Sponsor
Visible-SPonsor