BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Hiring Unlicensed Assistants
Q: I want to hire an unlicensed assistant to work for me. What do I need to do? Are there forms to fill out? What if I want to fire my assistant, can I?
A: All good questions.
Remember, if you hire an unlicensed assistant, you then could well be an employer and subject to many of the California and Federal laws related to employers and employees.
Some things to think about:
1. Employee or Independent Contractor: Most agents would like to hire the assistant as an independent contractor so as to avoid a lot of the hassle of having an employee. Discuss the distinctions and best choice for you with a good employment law attorney.
If the assistant is going to be an employee, there are payroll services such as Paychex, ADP and some banks which, for a small monthly fee, will take care of all of the paperwork associated with handling payroll, deductions, etc.
2. Employment Contract: There should be a written contract between the agent and the assistant. CAR has created a template form, but some agents hire employment law counsel to draft such an agreement. There is a box to check whether the assistant is considered to be an employee or independent contractor.
See ZipForms “Personal Assistant Contract” (Form PAC)
3. Three-Party Agreement: Some brokerages require a three-party agreement between the brokerage, the employing agent and the assistant who will be working for the agent. This agreement governs the terms under which that assistant may be allowed to work on the brokerage premises.
See ZipForms “Broker/Associate-Licensee/Assistants Three-Party Agreement”
(Form TPA)
4. Terminating Assistants: If an agent is going to terminate an assistant, it is always a good idea to discuss the matter with an employment law attorney to assure that the termination was done properly. Wrongful terminations lawsuits are expensive, even if you win.
5. Assistant Duties: Remember that unlicensed assistants cannot cross the line into doing licensed activity. There are severe penalties for doing so; the DRE can impose fines of up to $20,000 on the assistant, and other license sanctions on the agent and broker.
For more information, see CAR Legal Memo “Unlicensed Assistants” at:
http://www.car.org/legal/2009-qa/unlicensed-assistants/?redirectFrom=login
PRACTICE TIPS:
1. Before hiring an unlicensed assistant, it is a good idea to discuss all of the factors with a good employment law attorney so that you are fully aware of all of the issues of taking on an assistant.
2. Be sure to have a written agreement with the assistant. Such an agreement protects both you and the assistant if there is a dispute later.
3. Check with your company regarding any forms or paperwork that will be required if you hire an assistant.
4. Before terminating an assistant, it is also advisable to discuss the termination with your employment law attorney before doing so.
5. Both you and your assistant should read the CAR Legal Memo “Unlicensed Assistants” so that you both know what your unlicensed assistant can, and cannot, do. Sometimes the line between unlicensed and licensed activity is not clear. In those cases, it is wise to take precautions not to stray over the line.
DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
© Copyright Broker Risk Management 2010 09/24/10