From realtor.org —
“Worker classification laws at the federal and state levels as well as state real estate license laws will apply to a brokerage’s classification of its salespeople. At the federal level, the Internal Revenue Service has carved out a special statutory non-employee status for real estate professionals, qualifying them as independent contractors when all of the following requirements are met:
a. The individual must be a licensed real estate professional;
b. Substantially all of their payments must be directly related to sales or other output, rather than the number of hours worked; and
c. Their services must be performed under a written contract providing that they will not be treated as employees for federal tax purposes.
State statutes for worker classification and real estate licenses vary in regards to determining proper classification of real estate licensees. Some states explicitly recognize real estate licensees as independent contractors when certain conditions are met, and other states are silent as to real estate licensees so the courts must apply the applicable test for determining proper classification. This is why it is vital for real estate professionals to know the laws that pertain to worker classification in their states.”
Read the full story at Independent Contractor Status Frequently Asked Questions