REALTORS® Weigh In on Independent Contractor Proposed Rule

November 6, 2020

In late September, the U.S. Department of Labor (DOL) issued a notice of proposed rulemaking revising its interpretation of independent contractor status under the Fair Labor Standards Act (FLSA) with a streamlined economic reality testing to promote certainty for stakeholders, reduce litigation, and encourage innovation in the economy.

In determining a worker’s status as an employee or independent contractor, the proposed rule examines a workers’ economic independence based on: (1) the nature and degree of workers’ control over the work (i.e. setting your own schedule; selecting your own projects; ability to work for others); and, (2) the workers’ opportunity for profit and losses based on workers’ investment (i.e. individual management of investment or capital expenditure on material to further work). Should additional analysis be needed, DOL proposed three additional guideposts for deciding a worker’s status based on: (1) the amount of skill required for work; (2) the degree of permeance of the working relationship between the worker and the potential employer; and, (3) whether the work is part of an integrated unit of production.

NAR submitted comment on the proposed rule, advocating for minimal disruption to the real estate industry that greatly benefits from the ability to be classified as an independent contractor. Many states and some federal laws have codified the ability of real estate professionals to be classified as independent contractors, but there continues to be ongoing scrutiny and challenges to this status. NAR supports DOL’s efforts to provide a clear and consistent standard for evaluating a worker’s status, while preserving existing worker classification authority that allows real estate professionals to be independent contractors.

More than 1,700 comments were submitted on the proposed rule during the public comment period that closed on October 26, 2020. DOL will now analyze this feedback and work to issue a final rule based on those comments by the end of the year. Depending on how long this takes, a final regulation could be subject to repeal under the Congressional Review Act or by a change in the Administration. Stay tuned to nar.realtor for the latest information.

If you have any questions, contact Governmental Affairs Director Aaron Johnson at (404) 732-0631.

About the PBOR Market Brief

The Paulding Board of REALTORS® (PBOR)  Market Brief is compiled by First Multiple Listing Service (FMLS). For more information on details of this month's report, please contact the Board at 770.866.1397.

*Each month, the numbers reported for the previous month are updated to reflect additional recordings.

About the Paulding Board of REALTORS®

The Paulding Board of REALTORS® (PBOR) has been an instrumental factor in the growth of real estate in Paulding County, Georgia for more than a decade. PBOR serves as a central source of information for its members, with mainly focusing on real estate education, the promotion of professionalism in the industry and representing REALTORS® members with legislative initiatives to create positive change for the real estate community.

About First Multiple Listing Service

First Multiple Listing Service (FMLS) is the premier data services provider for real estate professionals in Georgia. FMLS was founded in 1957 by a group of Brokers who wanted to share their listings and connect buyers and sellers.  Today FMLS is the largest MLS in Georgia & the 4th largest MLS in the United States, serving nearly 54,000 real estate Agents & Brokers.  For additional information or to start a discussion about how to partner with FMLS please contact join@fmls.com.

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