On Tuesday, December 1, NJ Realtors® CEO, Jarrod Grasso, and General Counsel, Barry Goodman, spoke in front of the NJ Real Estate Commission to ensure the continued ability for real estate licensees to be independent contractors.
New Jersey Realtors® has closely monitored proceedings around the country surrounding the ability for Realtors® to continue to be classified as independent contractors. New Jersey Realtors® strongly supports the ability for real estate licensees to retain their status as independent contractors so that both real estate brokers and the agents they oversee have the flexibility to represent their clients to their fullest potential and ability within the confines of existing real estate law and regulations. In addition, we support the preservation of the independent contractor status for those in the real estate profession because of possible tax implications associated with a potential loss in this status. We also believe that real estate licensees should be considered professionals as defined in the Affidavit of Merit statutes in New Jersey and that the New Jersey Real Estate Commission should continue to be the main agency that regulates the real estate profession and protects the public.
Because of the nature of the real estate profession, the ability for brokers to classify the real estate agents they supervise as independent contractors is vital for several reasons. First and foremost is the distinction between an employee and an independent contractor. In the employer-employee relationship, employers traditionally dictate how their employees do their jobs — from the hours they work to their job responsibilities and the tasks they must perform. In an independent contractor relationship, real estate brokers do supervise their agents, but typically give them latitude in how they represent their clients, not dictating specific hours they work or assigning them tasks.
An independent contractor agreement outlining the terms of the relationship between a real estate broker and a real estate agent must be signed. Additionally, in an independent contractor relationship, there are tax implications at the federal level regarding federal income taxes not being withheld from an independent contractor’s earnings, so long as certain criteria are met.
The NJ Real Estate Commission will be promulgating independent contractor status over the next few months. NJ Realtors® will keep our members up-to-date on any new information as it becomes available.
