'Confusion in the Real Estate Industry'

New Jersey law protects Realtors as independent contractors. Even so, they wrote to the Labor Department, the proposed rule is a problem.

About 89% of National Association of Realtors members are independent contractors. That’s a statistic we see a lot in independent-contractor policy debates all across the country.

Here in New Jersey, it’s a statistic the Realtors rolled out quite loudly about a year ago, after a New Jersey Supreme Court ruling went their way—in a really big way.

“This is the first case in the country to decide on this issue and could have a great effect around the country,” attorney Barry S. Goodman said at the time. “If they found that real estate agents were employees, many brokers have said they would let go salespersons who were not high producers. There would have been real-life consequences.”

That court ruling, combined with Realtors’ efforts to lobby state lawmakers and amend the New Jersey Real Estate License Act, now give Realtors in New Jersey a lot of protective armor compared to other professions whenever the freelance-busting brigade launches an attack against independent contractors.

And yet, even with all that armor in place, New Jersey Realtors still felt the need to write a public comment that expresses concern about the independent-contractor rule that the New Jersey Department of Labor & Workforce is considering.

The proposed rule, according to this public comment, omits that key New Jersey Supreme Court case. And this omission, according to the Realtors, means the proposed rule “is not accurate for the real estate brokerage industry.”

Here’s the two-page public comment in full:

‘This Proposal is Discriminatory’

The Realtors aren’t the only people involved with real estate who submitted a public comment. Another one came from NAIOP NJ, which is a commercial real estate association. That comment urges the state Labor Department to rescind the proposed independent-contractor rule in its entirety.

Among other things, the NAIOP public comment states that the proposal “greatly exceeds” the Labor Department’s authority:

“… as evidenced by previous failed attempts to enshrine this narrow application of the ABC test have been being rejected by the State Legislature. This proposal effectively bypasses the authority of our state's elected legislative representatives of both parties. A proposal that would effectively eliminate the ability for New Jerseyans to work as independent contractors is not within the authority of any unity of the Executive Branch of State Government.”

Here’s the two-page NAIOP public comment in full:

To understand what NAIOP means about truckers, read this.

To understand what NAIOP means about the U.S. Labor Department, read this.

And to understand what NAIOP means about the federal bill known as the Modern Worker Empowerment Act, see this press release or watch my opening statement that urged Congress to pass it in July, when I testified before the U.S. Senate.

More to come tomorrow about the overwhelming 99% opposition comments to New Jersey’s proposed independent-contractor rule.