Legislation would protect the freedom and flexibility to pursue independent businesses
Washington, DC (August 19, 2021) – The Direct Selling Association, a national trade association representing direct selling companies, supports re-introduction of the Preserving Direct Seller Independence Act of 2021 H.R. 5038, introduced by Reps. Tim Walberg (R-MI) and Henry Cuellar (D-TX). The legislation would clearly define direct sellers as independent contractors under the Fair Labor Standards Act (FLSA) consistent with the Internal Revenue Service Code.
DSA President Joseph N. Mariano commended the introduction of this important legislation, saying “The independent contractor status of direct sellers was vital to the 13.9% growth in the industry last year. Many Americans were looking for ways to earn some modest extra income while staying safe at home during the pandemic and direct selling to friends, neighbors and relatives was and is an attractive option for millions of Americans. The business served as an attractive option for millions of Americans. I applaud Reps. Walberg and Cuellar for introducing this important legislation that recognizes direct sellers’ unique status under federal law. As Congress and the Administration debate the merits of independent work in our recovering economy, we hope that the independent contractor status of direct sellers as America’s Original Entrepreneurs will continue to be supported.”
The independent contractor status of direct sellers has been core to the business model for over 100 years. It was affirmed in the Internal Revenue Code in 1983 and specifically recognized under 43 state laws. H.R. 5038 would incorporate the IRS Code language in the FLSA and reinforce the historical treatment of direct sellers as independent contractors under federal labor law.
“America is filled with remarkable entrepreneurial spirit, and few understand that better than folks who are involved in direct selling on their own terms. These hardworking men and women make significant contributions to Michigan’s economy, generating over $990 million in sales last year alone. I am pleased to introduce this bipartisan legislation to provide certainty in the law, protect direct sellers’ independence, and allow economic opportunity to flourish.” says Rep. Walberg.
Protecting and supporting independent, direct sellers is a top priority of mine. In Texas’ 28th Congressional District, there are nearly 8,600 small employer businesses, approximately 88,000 small business employees and more than $2.7 billion directed towards the small business payroll,” said Congressman Cuellar. “This COVID-19 pandemic has shown all of us that small businesses are the fabric to our communities and that entrepreneurs are critical to our nation’s recovery. It is crucial that Congress remain above partisanship and pass common-sense economic policies like these to invest in our nation’s future. I will continue to champion small businesses, and entrepreneurship.”
Direct selling offers a low-risk way to participate in a recovering economy. Independent contractors involved in direct selling typically share and sell goods and services they love to their neighbors, friends and relatives on a part-time basis, and earn a modest, supplemental income. H.R. 5038 allows these independent salespeople to continue engaging in this active retail channel.
ABOUT DIRECT SELLING ASSOCIATION
For more than a century, the Direct Selling Association (DSA) has served as 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 2020, direct selling took place across the United States, generating $40.1 billion in retail sales and 7.7 million entrepreneurs in the U.S. sold products or services through the direct selling channel, providing a personalized buying experience for 41.6 million preferred customers and discount buyers.
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