On June 26, 2019, the Preserving Direct Seller Independence Act, H.R 3522, was introduced with bipartisan support. It reinforces the status of direct sellers as independent contractors by incorporating the specific language in Section 3508 of the Internal Revenue Service Code on direct selling independent contractor status into the Fair Labor Standards Act.
As Congress examines businesses using technology to facilitate new work arrangements, it is vital that longstanding models are protected. Since 1910, the Direct Selling Association (DSA) has developed and supported legislation which aids and protects direct sellers and independent contractors in their pursuit of entrepreneurship.
H.R. 3522’s lead sponsors, Reps. Tim Walberg (R-MI) and Josh Gottheimer (D-NJ), were joined by Reps. John Curtis (R-UT), Ben McAdams (D-UT), Lance Gooden (R-TX), and Henry Cuellar (D-TX) as original co-sponsors.
“Protecting and supporting independent contractor status has been and will continue to be a top priority for direct sellers,” stated Joseph N. Mariano, president of the Direct Selling Association. “We’ve made great strides to ensure we have bipartisan support from across the country to ensure the promotion and protection of entrepreneurship and independent work in today’s economy. With 1.3% growth in retail sales by direct sellers in 2018, we expect sustained growth over the next three years and protecting independent contractor status will be critical to that growth.”
“Michigan’s economy gets a big boost from direct selling. Last year in my home state, hundreds of thousands of entrepreneurial-minded direct sellers generated nearly $800 million in sales. By clarifying the law, we can ensure the necessary certainty to create more opportunities for entrepreneurs to succeed.” stated Congressman Tim Walberg (R-MI)
"In New Jersey, more than 385,000 people are involved in the direct selling businesses, like Mary Kay, totaling $958 million in annual sales. Direct sellers play an integral role in our economy and communities. They are their own bosses, like Jersey resident Tara Geraghty, who lives in my District and is a successful entrepreneur and Mary Kay Independent Beauty Consultant Sales Director. She and the other 8,500 Mary Kay Beauty Consultants in New Jersey are supporting their families and communities, and running their own small businesses, which are the lifeblood of our economy," said Congressman Josh Gottheimer (D-NJ). "Direct sellers like Mary Kay can be a full-time business, or a supplemental part-time job to increase a family’s income. I'm proud to help introduce this bipartisan legislation that will provide much needed clarity and help bring economic opportunities to more families in my District and grow this crucial part of our nation's economy and entrepreneurial spirit."
H.R. 3522 can be viewed here.
ABOUT THE DIRECT SELLING ASSOCIATION
The Direct Selling Association (DSA) is the national trade association for companies that offer entrepreneurial opportunities to independent sellers to market and sell products and services, typically outside of a fixed retail establishment. In 2018, direct selling took place across the United States, generating $35.4 billion in retail sales. More than six million entrepreneurs in the U.S. are selling products or services through the direct selling channel, providing a personalized buying experience for more than 36.6 million customers.
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