In response to recent litigation that threatens the ability of brokerages to classify workers as independent contractors, the National Association of REALTORS® (NAR) has produced a video, “Window to the Law: Independent Contractor Best Practices.”

Many salespeople prefer to work as independent contractors so that they can determine when, how and where to perform their work, according to NAR Senior Counsel, Director Legal Affairs Matt Troiani. In fact, 89 percent of NAR members are independent contractors.

A change in the classification from independent contractors to employees could increase costs, subject brokerages to fines, tax withholding, payment of minimum wages and reduce the independence of sales people. NAR recommends brokerages:

• use an independent contractor agreement
• pay salespeople on a commission basis
• require salespeople to own their own equipment
• require workers to cover their business expenses
• avoid mandating meetings or office coverage
• avoid referring to salespeople as employees.

Watch the video for more details.