Lawsuit to Challenge Status of Real Estate Agents
A case going forward in Los Angeles County Supreme Court may have widespread consequences for real estate agents throughout the country. This case, dubbed Bararsani v. Coldwell Banker Residential Brokerage Company, challenges that the accused brokerage company falsely classified its real estate agents as independent contractors when they were actually acting as employees. In doing so, the company failed to reimburse their contractors for their business-related expenses.
It’s common practice in the United States for brokerage companies to maintain their real estate agents as independent contractors instead of employees. The companies find this to be beneficial, as keeping their total employees under a certain number saves them from significant paperwork and expenses. Many of the agents themselves also find it to be an agreeable situation, as their contractor status allows them to be their own bosses and not have taxes withheld from their paychecks.
Though federal law allows for real estate agents to act as contractors, these laws may have to be re-analyzed depending on the outcome of this trial.
