ASSEMBLY, No. 6206

STATE OF NEW JERSEY

219th LEGISLATURE

 

INTRODUCED DECEMBER 6, 2021

 


 

Sponsored by:

Assemblyman  BENJIE E. WIMBERLY

District 35 (Bergen and Passaic)

Senator  PATRICK J. DIEGNAN, JR.

District 18 (Middlesex)

Senator  STEVEN V. OROHO

District 24 (Morris, Sussex and Warren)

 

Co-Sponsored by:

Senators Pou and O'Scanlon

 

 

 

 

SYNOPSIS

     Codifies right of real estate broker-salespersons and salespersons to define relationship with broker as one between broker and independent contractor or employee and enforces current and previous written agreements addressing relationship.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning real estate broker-salespersons and salespersons, and amending P.L.2018, c.71.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    Section 3 of P.L.2018, c.71 (C.45:15-3.2) is amended to read as follows:

     3.    a.  No broker-salesperson or salesperson shall commence business activity for a broker and no broker shall authorize a broker-salesperson or salesperson to act on the broker's behalf until a written agreement, as provided in this subsection, has been signed by the broker and broker-salesperson or salesperson.  Prior to an individual's commencement of business activity as a broker-salesperson or salesperson under the authority of a broker, the broker and broker-salesperson or salesperson shall both sign a written agreement which recites the terms under which the services of the broker-salesperson or salesperson have been retained by the broker.

     b.    Notwithstanding any provision of R.S.45:15-1 et seq. or any other law, rule, or regulation to the contrary, a business affiliation between a broker and a broker-salesperson or salesperson may be that of an employment relationship or the provision of services by an independent contractor.  The nature of the business affiliation shall be defined in the written agreement required pursuant to subsection a. of this section.

     If a current or previously written agreement exists or existed between the broker and the broker-salesperson or salesperson that defines, sets forth, identifies, or provides that the broker-salesperson or salesperson is or at any time has been an independent contractor of the broker, the broker-salesperson or salesperson shall be deemed to be or have been an independent contractor during the period in which the agreement is or was effective and shall not be classified as an employee for any purpose under any law, rule, or regulation for that period of time, except that the broker-salesperson or salesperson shall satisfy the test set forth in R.S.43:21-19(i)(7)(K) in order to be deemed an independent contractor under R.S.43:21-1 et seq. The broker-salesperson or salesperson shall not be required to satisfy any other test for any other law, rule, or regulation, including, but not limited to, the tests set forth at or applied to P.L.1965, c.173 (C.34:11-4.1 et seq.) and P.L.1966, c.113 (C.34:11-56a et seq.) to be deemed an independent contractor as provided in this section for purposes of any other law, rule or regulation.

(cf: P.L.2018, c.71, s.3)

     2.    This act shall take effect immediately and shall apply retroactively to enforce but not change any written agreement between a broker-salesperson or salesperson and a broker where the written agreement defines, sets forth, identifies or provides that the broker-salesperson or salesperson is or was an independent contractor.

 

 

STATEMENT

 

     This bill provides that, in the case of a written agreement defining a broker-salesperson or salesperson of a broker as an independent contractor, the broker-salesperson or salesperson is deemed to be an independent contractor during the period that the written agreement is or was effective. The broker-salesperson or salesperson is not to be considered an employee for any purpose under any law, rule or regulation during that period, except that the broker-salesperson or salesperson must satisfy the test set forth in R.S.43:21-19(i)(7)(K) in order to be deemed an independent contractor under the unemployment compensation law, but does not have to satisfy that test or any other test for any other law, rule or regulation, including, but not limited to, the State’s wage payment law, P.L.1965, c.173 (C.34:11-4.1 et seq.) and the State’s wage and hour law, P.L.1966, c.113 (C.34:11-56A et seq.) to be deemed an independent contractor, for the purposes of any other law, rule or regulation.

     The bill reaffirms the intent of the Legislature, as stated in the existing law (P.L.2018, c.71) regarding the licensing of real estate brokers, that broker-salespersons and salespersons who agree with a broker to be independent contractors are not to be and historically have not been deemed employees of the broker under any law, rule or regulation, and retroactively enforces any past written agreements regarding same, but the bill makes the clarification that, in the sole case of the unemployment compensation law, the agreement to regard them as independent contractors must also be in compliance with the specific requirement of that law for them to be regarded as independent contractors, which is that they must be compensated wholly on a commission basis.