You might be classifying your real estate team as independent contractors for various reasons. But whether the misclassification is intentional or unintentional, it can be a costly liability. It can even lead your company to bankruptcy.
Read below to learn how oustourcing Real Estate pay rolling can help alleviate the confusion, liability and costly burden of managing Real Estate teams.
1. My Real Estate Assistant is also a licensed Real Estate Agent and earns commissions. Why would I want to pay him or her through a third vendor as a W-2 employee?
Per the IRS, an employee whose job duties and responsibilities are controlled and directed by a supervisor should likely be a W2 employee. An third vendor helps mitigate risk to you and your business. Your Assistant can still earn commissions as a 1099.
The IRS is looking closely at the Real Estate industry for possible misclassification of workers. For example, if your Assistant is only a 1099 employee, you are not paying State Unemployment taxes. Should that Assistant file for unemployment you may be liable due to: worker misclassification, for unemployment benefits if awarded, as well as any fines and back taxes for misclassifying that Assistant.
2. What is and how does payroll outsourcing work?
It is a solution to your employment processes. The Employer of Record (EoR) handles employer responsibilities such as processing payroll, applicable federal, state, and local withholding taxes, unemployment taxes, social security, state disability insurance and all other payroll charges. The EoR helps maintain labor law compliance, perform applicable HR functions, unemployment insurance claims, and health benefits if required.
3. Will my Assistant have benefits with an Employer of Record service?
Yes, Checks and Balances, Inc. offers excellent benefits. C&B, Inc. is ACA compliant, offering medical coverage that meets all requirements; it also offers Dental Insurance, 401(k) and Flexible Spending Accounts.
4. Can my Assistant still earn commissions if they are on third-party real estate payrolling?
The Assistant can be a W-2 employee handling Administrative duties while you are directing their work. Should the Assistant be eligible to earn a commission related to sales or listings, the commissions can be paid as directed by your Agency relationship.
5. How does a Employer of Record vendor help me with risk mitigation?
EoR Solutions provide options for all employees and workers, whether W2 or Independent Contractors (1099) including Freelancers, Interns, Retirees or Alumni. Our structured onboarding program ensures proper employee classification thus assisting in mitigating risk. We carry a comprehensive business insurance package for all clients, such as professional liabilities, errors and omissions and workers compensation.
6. How does utilizing outsourced Real Estate Payrolling save me time and money?
Tracking time, processing payroll and maintaining compliance is time consuming, taking away from revenue generating activities. As your certified payroll practitioner, we provide HR functions and outsourcing such as timely reporting and monitoring ever-changing state regulations, all to keep you more productive and profitable.
Want to make sure you're paying your real estate team members legally? Checks and Balances, Inc. has a Real Estate Solution.