The common practice of paying real estate agents as independent contractors and denying them the benefits of employment is under legal fire. A class action lawsuit now awaiting decision at the Massachusetts Court of Appeals tests whether the real estate industry can continue to ignore a law that effectively bans the use of contractors in Massachusetts.
In a rather surprising decision in July, a superior court judge decided that they can. He relied on a Massachusetts statute that permits brokers to employ their real estate agents “either as an employee or as an independent contractor.” Noting a conflict between this language and the terms of the Independent Contractor Statute (Mass. Gen. L. ch. 149, §148B ), the court opted to ignore the latter law. The state legislature, it concluded, intended that agents be contractors despite provisions to the contrary in the Independent Contractor Statute. [Read more…]