The National Association of REALTORS® is voicing strong support for a proposed federal rule that could bring greater clarity and consistency to how real estate professionals are classified. In a letterpdf to the U.S. Department of Labor (DOL), NAR backed a new independent contractor framework issued by the DOL, calling it a step toward a more predictable standard for workers across industries, including real estate.
The proposal, released in February, outlines a revised approach under the Fair Labor Standards Act for determining whether a worker is an independent contractor or an employee. At the center of the rule is an “economic reality” test, which evaluates five factors to assess the nature of a working relationship. Among those, two are designated as core: the degree of control over the work and the worker’s opportunity for profit or loss.
NAR says this structure better reflects how independent contractors operate in today’s economy.
For the real estate industry, where independent contractor status is foundational, the proposed rule offers a more practical and consistent framework than previous interpretations. NAR emphasized that the clarity provided by the rule would help brokers and agents better understand their obligations while reducing uncertainty that can arise from shifting regulatory standards.
“The real estate industry represents approximately 20% of the U.S. economy, and real estate professionals are essential to its function,” the letter by 2026 NAR President Kevin Brown reads. “NAR supports clear, consistent, and pragmatic regulations that provide predictability and ease compliance for the many real estate professionals who are small business owners. By contrast, overly broad or burdensome regulations create challenges for both businesses and consumers.”
At the same time, NAR urged the Labor Department to go a step further. In its comments, the association called for an explicit exemption for real estate professionals, aligning federal labor law with existing tax treatment of agents as independent contractors. Such alignment, NAR argues, would eliminate inconsistencies and reinforce long-standing industry practices.
“NAR fully supports the ability of agents to be classified as independent contractors, and to be empowered to be entrepreneurial and innovative in working to advance homeownership for all,” says Shannon McGahn, NAR’s executive vice president and chief advocacy officer. “As the rulemaking process continues, NAR plans to stay engaged on behalf of our members with policymakers and keep the membership informed of any changes.”
For agents who are REALTORS®, the outcome could shape how the profession operates for years to come, making clarity and consistency in classification rules all the more critical.
