California REALTORS®, Tell Congress to Protect Independent Contractor Status

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Your Fight For Real Estate Begins Here

A hard time for real estate professionals is threatening to go from bad to worse. And by worse, we mean absolutely devasting. Since 1982, real estate agents have enjoyed certain protections clarified by the Internal Revenue Code (IRC) allowing us to set our own professional terms as independent contractors. It’s an attractive status for a lot of agents. So attractive, in fact, that nearly 85% of agents in California operate as independent contractors. But just when you thought it was safe to transact in the real estate industry, recent lawsuits are tangling with state legislation and federal rulings that could ensure you never work as an independent contractor again. How can they do this? And is there anything you can do about it?

CONTENT :

Four Decades of Real Estate Industry Gone in a Blink :

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At the beginning of 2024, the U.S. Department of Labor (DOL) issued its final rule on independent contractor status under the Fair Labor Standards Act (FLSA). Through this ruling, they declared that anyone laboring with a financial dependence on an employer is not an independent contractor. The factors for financial dependence as stipulated by the DOL include:

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This final rule contradicts protections for independent contractors that the IRC established in 1982.

In addition, it conflicts with the California State Assembly Bill 5 , established in 2020, which states that real estate professionals enjoy non-employee status when:

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In effect, four decades of industry have been built upon the secure foundation of these protections. Now, the DOL’s final rule is combining with California’s Assembly Bill 5 and recent lawsuits to pull that foundation out from beneath an entire industry.

Independent Contractor Status is Crucial for Real Estate Professionals

At JohnHart Real Estate, we’ve built a reputation with our efforts to redefine the real estate industry. But it’s never involved completely razing it to the ground. And that’s exactly what this upheaval of independent contractor classification would do. Can you imagine 85% of the state’s real estate agents being forced to transition from independent contractors to employees overnight? It’s no exaggeration to say that this would completely decimate real estate in California as we know it. Welcome back to the Wild West.

When we look around our offices, we see how the independent contractor classification enriches our agents' lives and allows them to best serve their clients. It’s how our agents safely pick their children up from school or take time off during the summer to connect with their families. Or how they work into the evenings on twilight open houses to get beautiful homes into buyers’ eyes in a relaxed and celebratory atmosphere. Our agents use independent contractor status to negotiate their own contracts and propel their careers forward in a manner befitting their hard work and determination. It gives them the freedom to build their business the way they see fit without the confinement of micromanagement and oppressive oversight.

This could take all of that away from them.

Think about that for a moment. Does that seem just or fair; to deprive these professionals of the independence they’ve worked their whole lives to achieve? To rob their clients of that kind of commitment, unfettered by pointless restrictions?

How Can You Fight for Your Professional Freedom?

At JohnHart Real Estate, we’re committed to fighting for our agents. Because this has always been more than a job for them. It’s their calling; their life’s purpose. And this final rule could take that away from them. We don’t want to even imagine that world.

That’s why we ask you to join us in fighting to protect independent contractor status for real estate agents in the state of California. You can start by filling out the form at the accompanying link, which will redirect you to the official NAR website. The form you need to sign is to the right of that page. When you sign this form, consider it your way of fighting for your professional freedom. This includes:

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Signing this form sends a message to Congress that you support H.R. 5419, the Direct Seller and Real Estate Agent Harmonization Act. It’s a bill that bolsters protections for your independent contractor status under the FLSA, ensuring you can continue to provide the best service to your clients while maintaining your professional lifestyle without harassment.

Help Your Colleagues Out - Let Them Know

Once you’ve signed the form, share, share, and share. We need every REALTOR® and real estate agent to know what’s coming for them. Get the word out to your colleagues like your livelihood depends on it… because it does.

The National Association of REALTOR®s (NAR) stands behind protections for independent contractors.

JohnHart Real Estate stands behind protections for independent contractors.

Will you stand with us?

Our only chance of rising above this attack is to work together. Let’s not waste another moment. Sign the form now and share with everyone who needs to see it.