The law calls for the creation of a standard that is universally applicable to certified real estate professionals and direct sellers. The measure must be implemented consistently in accordance with the Fair Labor Standards Act.

Agents in the real estate industry are considered independent contractors in the Internal Revenue Code for federal tax purposes. However, the status isn’t always used to all laws particularly within the Fair Labor Standards Act. A new law that’s currently on Capitol Hill aims to change the status of independent contractors.

The Direct Seller and Real Estate Agent Harmonization Act(link external) (H.R. 5419) (H.R. 5419), which is being introduced by the House on Tuesday, aims for amendments of the Fair Labor Standards Act of 1938 to clarify the meaning of “employee” by incorporating the Internal Revenue Code recognition of direct sellers as well as qualified real estate brokers to be “independent contractors.” Proponents of the bill, led by Rep. Tim Walberg (R-Mich.) claim that it provides a more clear and universal standard for statutory law.

Read more: FAQs on independent contractor status in real estate

“While the ability to work as an independent contractor is recognized and protected under the IRC and many state laws, new federal rules and state legislation expanding the definition of ’employee’ continue to threaten workers’ ability to be classified as independent contractors, including for many real estate professionals and direct sellers,” the National Association of REALTORS® and the Direct Selling Association said in a joint statement supporting the bill. The associations are working together to clarify the misinformation and inconsistencies around independent contractor status for the real estate and direct selling industries.

The majority of the country’s 1.5 million REALTORS(r) (r) have been NAR member, as well as more than 7.3 million directly selling agents are categorized as self-employed contractors. Direct sellers have contributed $42.7 billion in the U.S. economy in 2021 while the property market is $3.9 trillion or one-third of total economy.

“This classification is essential to the real estate and direct selling industries,” NAR and the DSA declared in their joint statement. “A clear statutory standard is critical to protecting the livelihoods of direct sellers and real estate agents supporting consumers across America.”

A further obstacle for homeowners: One of six potential buyers from different races and ethnicities have faced discrimination, according to NAR’s research. More than half Black (63 percent), Asian (60%) and Hispanic (52 percent) buyers who have reported experiencing discrimination believe they were targeted due to the race they belong to or their ethnicity. A majority of complaints revolve around how they are treated or the requirements to qualify to get a loan.

NAR offers a range of tools and resources to its members to ensure that there is no discrimination in a property transaction. These include:

• Fairhaven(link to external), an interactive training simulation based upon real fair housing situations.
• “Bias Override: Overcoming Barriers to Fair Housing,” an implicit bias course that provides suggestions on how to combat bias-based thinking.
• At Home with Diversity A certification course focused around serving consumers from different backgrounds.
• The fair housing toolkit(link is external) to help state and local associations utilize grants to help promote fair housing initiatives in their communities.