BILL NUMBER: AB 2169 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 10, 2014
INTRODUCED BY Assembly Member Cooley
(Principal coauthor: Assembly Member Bonilla)
FEBRUARY 20, 2014
An act to amend Section 10032 of , and to add Section 10032.1
to, the Business and Professions Code, relating to real
estate.
LEGISLATIVE COUNSEL'S DIGEST
AB 2169, as amended, Cooley. Business and professions.
Existing law, the Real Estate Law, governs the licensure and
regulation of real estate salespersons and real estate brokers.
Existing law requires all obligations under the Real Estate Law, all
regulations issued by the Real Estate Commissioner relating to real
estate salespersons, and all other obligations of brokers and real
estate salespersons to members of the public to apply regardless of
whether the real estate salespersons and the broker to whom he or she
is licensed have characterized their relationship as one of
"independent contractor" or of "employer and employee."
Existing law authorizes a real estate broker and a real estate
salesperson licensed under that broker to contract between themselves
as independent contractors or as an employer and employee, for the
purposes of their legal relationship with, and obligations to, each
other. Under existing law, the characterization of a relationship as
either "employer and employee" or "independent contractor" for
purposes, including, but not limited to, withholding taxes on wages
and unemployment compensation is governed by certain specified
provisions of law. Existing uncodified law prohibits the above
provisions from being interpreted or applied to affect existing
obligations of a real estate broker regarding liability or workers
compensation insurance or from altering existing case law.
This bill instead would require the contractual
would clarify that the characterization of a relationship
of a real estate broker and a real estate salesperson licensed under
that broker as either "employer and employee" or "independent
contractor" to be is conclusive
, except as provided, for all purposes, including, but not
limited to, withholding taxes on wages, unemployment compensation,
and all other statutory, regulatory, common law, and contractual
purposes for statutory, regulatory, or common law
purposes , if certain statutory requirements are satisfied.
The bill would state findings and declarations and the intent of
the Legislature in this regard.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10032 of the Business and Professions Code is
amended to read:
10032. (a) All obligations created under Section 10000, and
following, all regulations issued by the commissioner relating to
real estate salespersons, and all other obligations of brokers and
real estate salespersons to members of the public shall apply
regardless of whether the real estate salesperson and the broker to
whom he or she is licensed have characterized their relationship as
one of "independent contractor" or of "employer and employee."
(b) A real estate broker and a real estate salesperson licensed
under that broker may contract between themselves as independent
contractors or as employer and employee . Except as provided
in subdivision (a) and for purposes of workers compensation, the
contractual employee. The characterization of a
relationship as either "employer and employee" or "independent
contractor" shall be conclusive for all
statutory, regulatory, and common law purposes ,
including, but not limited to, withholding taxes on wages,
unemployment compensation, and all other statutory, regulatory,
common law, and contractual purposes, if the requirements
of Section 650 and Sections 13000 to 13054, inclusive, of the
Unemployment Insurance Code are met. For purposes of workers
compensation the characterization of the relationship shall be
governed by Section 3200, and following, of the Labor Code.
SEC. 2. Section 10032.1 is added to the
Business and Professions Code , immediately
following Section 10032 , to read:
10032.1. (a) It is the intent of the Legislature in enacting the
amendments to Section 10032 made by Assembly Bill 2169 of the 2013-14
Regular Session to restate existing law for purposes of
clarification and to reiterate the application of existing law
regarding the validity and enforceability of the election made by the
parties to a real estate retention agreement to characterize their
relationship as one of "independent contractor" or "employer and
employee."
(b) The Legislature finds and declares all of the following:
(1) The real estate marketplace is an important part of California'
s economy. The continued smooth functioning of the existing
marketplace model of supervising real estate brokers and real estate
salespersons is important in order to avoid a disruption of the
market, which could result in a significant negative effect on
California's economic recovery.
(2) The retention relationship of real estate brokers and real
estate salespersons is unique and operates under a special statutory
scheme, the Real Estate Law, and the implementing regulations of the
Real Estate Commissioner, notwithstanding the general statutory
provisions that govern employment relationships.
(3) The contractual relationship of nearly 300,000 real estate
salespersons and their ongoing retention is put at risk if they and
their affiliated offices cannot be confident in the validity and
enforceability of their choice to characterize their relationship as
one of "independent contractor" or of "employer and employee" under
their retention agreement.
(4) The overwhelming majority of real estate salespersons and real
estate brokers have relied in good faith upon the ability to make
the choice to characterize their relationship as one of "independent
contractor" for all statutory purposes, with the understanding that
their choice is conclusive as to the characterization of their legal
relationship, as allowed pursuant to Section 10032, by satisfying the
three-part criteria set forth in Section 650 and Sections 13000 to
13054, inclusive, of the Unemployment Insurance Code, and related
portions of the Real Estate Law, which governs the applicability of
certain Labor Code provisions.
(5) The amendments made to Section 10032 by Assembly Bill 2169 of
the 2013-14 Regular Session do not change the rights and obligations
of either real estate brokers or real estate salespersons under
Section 650 and Sections 13000 to 13054, inclusive, of the
Unemployment Insurance Code, or the characterization of their
respective relationship for purposes of workers' compensation under
Section 3200, and following, of the Labor Code.