Federal and Rhode Island law presume that all workers are employees who are subject to tax withholding, workers’ compensation, minimum wage, unemployment compensation and other laws.  In order to treat affiliated real estate salesperson and associate brokers as independent contractors, principal brokers must have the following documents or risk these and other penalties. 

See RI law: http://webserver.rilin.state.ri.us/Statutes/TITLE28/28-36/28-36-15.HTM

1. Independent Contractor agreement: There is an exemption for real estate licensees who (a) sign an independent contractor agreement with their broker; and (2) are paid commissions based on sales and output instead of hourly work.
2. Notice of Designation of Status of Independent Contractor form: Rhode Island law requires all independent contractors to file a Notice of Designation as an Independent Contractor form with the RI Department of Labor and Training (“DLT”).
3. Notice of Withdrawal of Designation as Independent Contractor form: Rhode Island law requires all independent contractors to file a Notice of Withdrawal of Designation as an Independent Contractor form with the RI Department of Labor and Training (“DLT”).  TIP:  Search the DLT database to make sure that the licensee has registered and withdrawn after leaving.
4. Office Policies: State law and/or the REALTOR® Code of Ethics require brokers to adopt office policies to address topics, including, but not limited to, termination, confidentiality of client records, records retention, and others. Please refer to the separate handout about office policies for more information.

Questions?  Contact Monica Staaf, General Counsel, RIAR/State-Wide MLS at 401-432-6945 or email [email protected].