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NAR submitted a comment opposing the Department of Labor’s proposed withdraw of the final rule on independent contractor status under the Fair Labor Standards Act (FLSA). This regulation, introduced by the previous Administration, never took effect and had no direct impact on real estate professionals’ classification under the Internal Revenue Code for federal tax purposes. However, the final rule provided helpful clarity and certainty for how an employer may classify a worker. It is anticipated DOL will rescind the rule based on this proposal, but has not yet released any replacement suggestions.
Many individuals are attracted to the real estate sales industry because of the ability to classify as an independent contractor, where one enjoys maximized workplace flexibility and autonomy within a dynamic and flourishing field. In light of the ongoing challenges posed to businesses across the country because of the pandemic, NAR encouraged the Department not to withdraw the final rule and also not erode any of the existing classification clarifications already in place at the federal and state levels for real estate professionals in any replacement proposals.
NAR will continue to resist any efforts by federal regulators or legislators that threatens real estate professionals’ ability to classify as an independent contractor, including by incorporating the ABC test. Preserving existing worker classification authority at the federal and state levels to allow real estate professionals to continue to provide excellent service to consumers is key to supporting the American Dream of homeownership and maintaining stability in the housing market.
Check out NAR’s advocacy efforts to protect independent contractors.