According to a National Association of Realtors white paper about the topic, real estate agents occupy a unique legal status. Real estate agents must be supervised by a broker, so they don’t meet the “hallmark characteristic” of an independent contractor: freedom to operate their business how they want and when they want, without oversight.
However, in many other ways, real estate agents are treated as independent contractors. For example, the Internal Revenue Service (IRS) asks agents to follow self-employment tax laws, with a few exceptions.
This means that real estate agents are caught in a kind of legal middle ground. They have some control over their business practices — quite a bit more than a typical employee. But every agent is still accountable to a broker as well as clients.
The authors discuss Bararsani v. Coldwell Banker and Monell Pads LLC, cases in which the real estate agents claim they were not properly classified as independent contractors. They also the response by the California Association of Realtors and the National Association of Realtors both of whom support the current system.
Read the full story at Real Estate Independent Contractor Lawsuits, Explained