Independent Contractor Law Provides Greater Certainty & Legal Protection for REALTORS®

On April 19th, Governor Inslee signed into law one of our priority legislative issues – defining “independent contractor” in real estate license law (RCW 18.85).

Under the federal tax code and various state laws, real estate licensees are considered independent contractors. However, Washington’s real estate law did not include a statutory definition of “independent contractor,” which created uncertainty for both our industry and how it was regulated.

The legislation (SB 5125) signed by the Governor, and which REALTORS® strongly supported, provides a statutory definition that reflects the structure of the real estate industry, rather than leaving this question to the courts to define. In the absence of a written employment agreement to the contrary, a real estate licensee affiliated with a brokerage firm is defined as an independent contractor.