Are you an employee or an independent contractor? The Internal Revenue Service, Rhode Island Division of Taxation, and Rhode Island Department of Labor and Training know the difference. Do you?
Federal and Rhode Island law presume that all workers, including associate brokers and salespeople, are employees unless they meet the legal requirements to work as an independent contractor. Employees sign W-2’s and are subject to tax withholding, workers’ compensation, minimum wage, unemployment compensation and other laws. To have the flexibility to work legally as an independent contractor, make sure to have the following documents or risk these and other penalties. http://webserver.rilin.state.ri.us/Statutes/TITLE28/28-36/28-36-15.HTM
- Independent contractor agreement: To be treated as an independent contractor, real estate licensees must sign an independent contractor agreement with their broker; and be paid commissions based on “sales and output” instead of by the hour. http://webserver.rilin.state.ri.us/Statutes/TITLE28/28-29/28-29-7.1.HTM
- 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”). www.dlt.ri.gov/wc/icmain.htm
- 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”). www.dlt.ri.gov/wc/icmain.htm
Search the DLT public database to see which licensees have registered properly. http://www.dlt.ri.gov/wc/iclists.htm
Questions? Contact Monica Staaf, General Counsel, RIAR/State-Wide MLS at 401-432-6945 or email.