ADRE Model Broker Policy Manual-Employees

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All Employment Records must be maintained for five years (A.R.S. § 32-2151.01(A)).employees
This section may include information about:

  • Benefits
  • Insurance
  • Paid Time Off
  • Holidays
  • Enforced Absences, i.e., Jury Duty, Military service
  • Office Hours
  • Personnel Files
  • Salary and Wage Policy
  • Payment of Salaries/Wages
  • Payroll Deductions
  • Performance Review
  • Disciplinary Action
32-2151.01. Broker requirements; record keeping requirements; definition

A. Each licensed employing broker shall keep records of all real estate, cemetery, timeshare or membership camping transactions handled by or through the broker and shall keep employment records, including copies of employment status, for all current and former employees. The records required by this section shall include copies of earnest money receipts, confirming that the earnest money has been handled in accordance with the transaction, closing statements showing all receipts, disbursements and adjustments, sales contracts and, if applicable, copies of employment agreements. The records shall be open at all reasonable times for inspection by the commissioner or the commissioner’s representatives. The records of each transaction and employment records shall be kept by the broker for a period of at least five years from the date of the termination of the transaction or employment. The records shall be held in the employing broker’s principal office or licensed branch office in this state or at an off-site storage location in this state if the broker provides prior written notification of the street address of the off-site storage location to the department.

Quick Quiz

Fill in the Blank:
Each employing broker shall keep records of all real estate, cemetery, timeshare or membership camping transactions handled by or through the broker and shall keep employment  .

Equal Opportunity Employer

This section should include:

  • An affirmative statement concerning equal employment opportunities at the Company.

Fair Housing

This section should include:images

  • A statement concerning compliance with the State and Federal Fair Housing Acts.
  • Clear instructions on compliance with the State and Federal Fair Housing Laws and rules, including requirements for advertising, including:
  • A Sales Associate shall not discriminate against a person in making a real estate related transaction available or in the terms or conditions of a real estate related transaction because of race, color, religion, sex, national origin, handicap or familial status.
  • A Sales Associate shall not make, print or publish or cause to be made, printed or published any notice, statement or advertisement with respect to the sale or rental of a dwelling that indicates any preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status or national origin, or an intention to make such a preference, limitation or discrimination.
Quick Quiz

Fill in the Blank:
A Sales Associate shall not against a person in making a real estate related transaction available or in the terms or conditions of a real estate transaction because of race, color, religion, sex, national origin, handicap or familial .

Harassment (Including Sexual Harassment and Harassment Based Upon Sex, Age, Disability, Race, National Origin, or Religion)

This section should include:

  • A policy that is consistent with the Company’s commitment to provide equal employment opportunities and a statement that the Company will not tolerate any form of harassment, including sexual harassment or harassment on the basis of age, disability, race, national origin, or religion.
  • How harassment claims should be reported.
  • How harassment claims will be investigated or handled.

Independent Contractor vs. Employees (Agreement)

This section should include:

  • The Sales Associate’s standing as an Independent Contractor or Employee, including types of activities that may affect the Sales Associate’s standing as perceived by the Internal Revenue Service, Arizona Department of Revenue or the Arizona State Compensation Fund.
  • Whether a written Independent Contractors Agreement with the Company is required.
  • A Sales Associate’s status as an Independent Contractor does not change the requirement for a Sales Associate to work only on behalf of the employing broker and be supervised by the licensed broker. An Independent Contractor may not perform real estate activities independently of their broker.
  • A Sales Associate may not independently conduct licensed real estate activities under a corporation, partnership or limited liability company, as such entities require a licensed broker and licensure with the Department of Real Estate.
NOTE: For federal tax purposes, the Internal Revenue Code (I.R.C. § 3508) provides a statutory classification for qualified real estate salespeople that allows their treatment as self-employed “statutory non-employees” for federal income and employment tax purposes. If the salesperson is a “statutory non-employee” the broker is not required to withhold federal taxes. To qualify for this “statutory non-employee” status, the real estate salesperson must, in part:
1. Be licensed as a real estate agent;
2. Receive substantially all compensation based on sales or other output, rather than the number of hours worked; and
3. Have a written contract with the brokerage firm that provides that the salesperson will not be treated as an employee for federal tax purposes.
Quick Quiz

Fill in the Blank:
A Sales may not independently conduct licensed real estate activities under a corporation, partnership or limited liability company, as such entities require a licensed broker and licensure with the of Real Estate.

Insurance

Automobile

In this section, the Broker should clarify:

  • Who is responsible for providing transportation and who pays which expenses.
  • If the Broker has minimum insurance requirements, and what the limits are.
  • Any indemnification/hold harmless clauses the Broker may require.
  • If the Company requires the Sales Associate to be an additional insured on the Company’s policy.
  • If the Company requires higher insurance level when clients are in the car.

Errors & Omissions

This section should include:agentseo

  • Who will obtain Errors & Omissions Insurance. Who is responsible for paying the premiums or, if pro-rated, what the Sales Associate’s share may be and who absorbs any increase in the deductible or premium.
  • Whether the Company requires alternative dispute resolution, mediation or arbitration to handle complaints.
  • Does the Company require the Sales Associates to sign a formal Errors & Omissions Agreement.
  • How does the Company provide for indemnification from the Sales Associates and/or the severance of a Sales Associate.
  • Sales Associates should be cautioned that there are circumstances where E & O may not provide coverage, i.e., fraud, commercial environmental issues, transactions where Sales Associates act as a principal.
  • Does the Company’s E & O coverage include Sales Associate owned property. What are the requirements for coverage?
    o What type of property does this include (residential, land, commercial, business opportunity)?
    o Is there a difference in the fee and who is responsible for payment?
  • What the legal and complaint procedures will be with regard to the following:
    o Client/Customer Complaint Letters.
    o Attorney Letters.
    o Production of Records Subpoena.
    o Lawsuit Subpoena.
    o Arizona Department of Real Estate or Association of REALTORS® Complaints.
    o Internal Revenue Service or Arizona Department of Revenue Tax Levy.
Quick Quiz

Fill in the Blank:
Does the require the Sales Associates to sign a formal Errors & Omissions .

Health and Life

This section should include:

  • Whether the Company provides health and/or life insurance.
  • If the Company does provide health and/or life insurance, how the health and/or life insurance will be paid for.

General Liability

This section should include:

  • All Company’s should carry General Liability Insurance.
  • What is the Broker’s position regarding whether the Sales Associates should obtain their own individual General Liability Insurance? If so, how much?
Quick Quiz

Fill in the Blank:
If the does provide health and/or life insurance, how the health and/or life insurance will be paid .

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