As ordered reported by the House Committee on Education and Workforce on September 17, 2025
H.R. 3495, Direct Seller and Real Estate Agent Harmonization ActAs ordered reported by the House Committee on Education and Workforce on September 17, 2025
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|---|---|---|---|---|---|---|---|---|---|---|---|
By Fiscal Year, Millions of Dollars | 2026 | 2026-2030 | 2026-2035 | ||||||||
Direct Spending (Outlays) | * | * | * | ||||||||
Revenues | * | * | * | ||||||||
Increase or Decrease (-) in the Deficit | * | * | * | ||||||||
Spending Subject to Appropriation (Outlays) | 0 | 0 | not estimated | ||||||||
Increases net direct spending in any of the four consecutive 10-year periods beginning in 2036?
| No
| Statutory pay-as-you-go procedures apply?
| Yes
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Mandate Effects
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Increases on-budget deficits in any of the four consecutive 10-year periods beginning in 2036?
| *
| Contains intergovernmental mandate?
| No
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Contains private-sector mandate?
| Yes, Under Threshold
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* = between -$500,000 and $500,000.
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On This Page
H.R. 3495 would amend the Fair Labor Standards Act (FLSA) to exclude any direct sellers and real estate agents from the definition of “employee”. That change would align the definition of employee for those individuals in both the FLSA and the Internal Revenue Code.
The FLSA authorizes the Department of Labor (DOL) to impose and collect civil monetary penalties from employers that repeatedly and willfully violate the law’s minimum wage and overtime provisions. The penalties are recorded in the federal budget as revenues, and a portion can be spent without further appropriation. DOL typically collects less than $20 million per year in such penalties for all FLSA violations, according to agency enforcement statistics.
Enacting the bill would result in fewer entities being subject to those penalties. Under H.R. 3495, CBO estimates that the reduction in amounts collected would be small and that the decrease in revenues and direct spending, and the resulting net increase in the deficit would be less than $500,000 over the 2026-2035 period.
Mandates
H.R. 3495 would impose a private-sector mandate, as defined in the Unfunded Mandates Reform Act (UMRA), on workers who would no longer be covered by the FLSA and therefore would not have legal grounds to seek financial compensation for violations of that act.
The cost of the mandate on workers would be the value of financial settlements that they would have received for violations of the FLSA in the absence of the bill. Using data from DOL on back wages and financial compensation for FLSA violations, CBO estimates that the cost of this mandate is below the threshold for private-sector mandates established in UMRA ($206 million in 2025, adjusted annually for inflation).
H.R. 3495 contains no intergovernmental mandates.
The CBO staff contact for this estimate is Susan Beyer (for federal spending) and Erich Dvorak (for mandates). The estimate was reviewed by Christina Hawley Anthony, Deputy Director of Budget Analysis.
Phillip L. Swagel
Director, Congressional Budget Office