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Mike, I tried to rep you for that most excellent post, but apparently I've repped you too recently to do that. (I always rep the post, not the poster, so I lose track of who I've repped recently.)
Yes, and if you did all of the above for my company, I COULD NOT JUST GIVE YOU A 1099!!!! You would have to GO ON THE BOOKS!!!! Again, why?.
You just need professional help like a better accountant or tax attorney if they are telling you that you cannot engage independent contractors within the law and still have independent contractors for payroll purposes.
I am an independent contractor, right down the list.
There is no doubt in my mind.
This is not my first gig as an independent contractor. I have see it done wrong and done right.
We are doing it right.
The flip side of the coin is the largest restaurant in my area has hundreds of people working for him. He has to pay worker's compensation on each one of them. he has to have taxes deducted for each worker's check. he has to carry health insurance and 401k's and his insurance is extremely high because of the hi risk factor of someone getting hurt. Are you getting this? Or do you just not want to admit you have such an edge on the rest of us business owners?
Consider these questions:
Can the restaurant employees show up at work whenever they want?
Can they go on vacation whenever, or for how ever long they want?
Can they choose who they want to serve, or wait on?
Can they choose how they go about their work, or what the outcome is?
Do they have to bring in their own chairs, tables, linens and silverware for their customers?
Can the waiters decide to only serve beef dishes, but not chicken?
Well, I agree that Silverfall answered A PART of the question. However, what about the offices who require floor time and phone hours? Aren't they "controlling or directing" your time? And what about when the broker refuses to let you take a listing for reduced commission? Aren't they "controlling or directing" the outcome of your bottom line? What about NOT allowing you to work for several brokers? One of the prongs of the independent contractor status is that you NOT work for one employer specifically.
While I don't think it's a conspiracy or something evil, I do think that under closer scrutiny, real estate agents fail the independent contractor status test on a few levels.
Requiring phone time and floor time seems like it could fall into employee category. I don't know any local companies that require it. The agents are free to sign up when it works for them. I know a couple of real estate companies have gotten dinged and had to pay back employee taxes because they did indeed put many restrictions on the business practices of their independent contractors that they were no longer contractors.
The broker can refuse to let you take a reduced commission because according to STATE laws the listing is with the broker. The agent, the independent contractor, is acting on behalf of the broker.
As for not allowing you to work with several brokers, there are agency issues at play there and that is a state law issue. If you have an agent working at brokerage ABC and they have a client who wants to write an offer on a home that the same agent has listed with company XYZ, then you have some really icky agency issues to deal with in terms of representation of the clients. I know an agent that works with a firm in Portland Oregon and a different company in Vancouver Washington. Agents can work for different firms. Most just don't want to.
There is IRS tax law and then state laws. Agents follow both.
I agree that there are ways to pigeonhole into the independent contractor status. I did it myself. I was no more "independent," than most employees. Like in restaurants. Waiter has a shift. He doesn't have to show up as long as he gets someone to cover it. They pay less than minimum wage in some states and they're free to work at as many restaurants as they want. They get bartenders and busboys, but they have to pay them out of their tips. So that "service" is a job expense. They schedule a meeting when a person isn't scheduled to work, you don't get paid to attend the meeting. The meeting isn't "mandatory," so no reqmt to pay you. It goes on and on.
I think the whole concept of "independent contractors," is for like consultants who have a specialty and they go from company to company working for a short period of time on a project.
When you have an agent who only works for Century 21, they're an employee even if they do "meet the criteria."
I think what Angel is trying to say is that there are a lot of industries who treat their "employees," the same way as independent real estate agents but they also call them employees and offer them benefits and wages and support, et cetera, because they feel like they are employees.
Her post was how the RE industry got started with this practice of independent contractors v. employees and why. I think the why of it is simple. It's cheaper and most cost effective for them. It's more costly for the consumer.
If agents were employees, they wouldn't make six figures a year.
I think where you saw that posted (if it's the same place I did) was that the courts somewhere determined that that was the going rate for a real estate agent to be paid for appearing as an expert in court or something. But I could be misremembering the details, I suppose.
I don't have to offer proof. And I would be proud to fall into the "Angel category." Just as long as you don't put me in the "other" category.
Look, this is a discussion board. If you don't like the post, don't read it.
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