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Real estate glossaryGeorgia-specific rule

Independent contractor

An independent contractor is a worker treated as operating independently rather than as an employee under the legal test relevant to the issue.

Exam area: Practice of Real Estate

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What does “independent contractor” mean in real estate?

An independent contractor is a worker treated as operating independently rather than as an employee under the legal test relevant to the issue. Qualifying real estate agents can be statutory nonemployees for federal tax purposes when licensing, output-based compensation, and written-contract requirements are met.

How is “independent contractor” different from the closest wrong answer?

Tax classification is not identical to licensing supervision. A Georgia qualifying broker must supervise affiliated licensees even when a written agreement calls them independent contractors.

What is the Georgia-specific rule?

Broker oversight, advertising rules, trust-fund controls, and compensation-through-broker requirements remain in force for Georgia affiliated licensees.

Worked exam example

Scenario

A salesperson's agreement states federal tax nonemployee treatment and compensation is based on transactions, but the qualifying broker still reviews advertising and transaction files.

What is the most common exam trap?

Trap correction

The label in a contract does not erase statutory duties or control every employment-law test.

Original exam check

Apply the definition

A Georgia salesperson's written agreement says the salesperson is an independent contractor paid only on closed transactions. The salesperson wants to run ads without the qualifying broker reviewing them. What is correct?

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Recommended next complete lesson

Continue with Practice of Real Estate complete lesson. It places this term inside the full rule, worked examples, exam traps, and mixed practice required for mastery.