Are Realtors independent contractors?

Are Realtors independent contractors? It depends.

In New Jersey, if the written agreement between the Realtor and the broker states that the Realtor is an independent contractor, then they are, regardless of whether they meet what’s called the ABC test.

What is the ABC test for independent contractors and why don’t Realtors have to follow it?

A worker who is properly classified as an independent contractor must meet three criteria:

  1. The worker must be free from control or direction over the performance of the work.
  1. The work must be outside the usual course of business for which the service is performed, or it is performed outside the premises of the business.
  2. The worker must be customarily engaged in an independently established trade, occupation, profession or business.

So, why are Realtors different from other workers?

New Jersey Supreme Court decided that the New Jersey Real Estate License Act, or what’s commonly known at the Brokers Act, trumps any other rules or regulations.

So, if the Realtor and broker agree that the Realtor is an independent contractor in a written agreement, no further analysis is required.

This blog is for informational purposes only. It is not offered as legal advice, nor is it intended to create an attorney-client relationship with any reader. Consult with competent local employment counsel to determine how the matters addressed here may affect you.


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