DAR File No. 40045

Workforce Services, Unemployment Insurance

Section R994-205-106

Exempt Real Estate Sales

Notice of Proposed Rule

(Amendment)

DAR File No.: 40045
Filed: 12/31/2015 01:28:29 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this change is to allow property managers to be treated under the real estate exemption under certain circumstances.

Summary of the rule or change:

The department rule currently provides that services performed as a property manager are not exempt under the real estate exemption. Since property managers must be real estate agents, except in certain limited areas, some property managers should be exempt under the department rule.

State statutory or constitutional authorization for this rule:

• Subsection 35A-4-502(1)(b)
• Subsection 35A-1-104(4)
• Section 35A-1-104
• Section 35A-4-205

Anticipated cost or savings to:

the state budget:

This is a federally-funded program so there are no costs or savings to the state budget.

local governments:

This is a federally funded program so there are no costs of savings to local government.

small businesses:

There are no costs or savings to any small businesses as there are no fees associated with this program, and it is federally funded.

persons other than small businesses, businesses, or local governmental entities:

There are no costs or savings to any persons other than small businesses, businesses, or local government entities as there are no fees associated with this program, and it is federally funded.

Compliance costs for affected persons:

There are no costs or savings to any affected persons as there are no fees associated with this program, and it is federally funded. These changes will not impact the contribution rate of any employer.

Comments by the department head on the fiscal impact the rule may have on businesses:

There are no compliance costs associated with this change. There are no fees associated with this change. There will be no cost to anyone to comply with these changes. There will be no fiscal impact on any business. These changes will have no impact on any employers contribution tax rate.

Jon Pierpont, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Workforce Services
Unemployment Insurance
140 E 300 S
SALT LAKE CITY, UT 84111-2333

Direct questions regarding this rule to:

• Suzan Pixton at the above address, by phone at 801-526-9645, by FAX at 801-526-9211, or by Internet E-mail at spixton@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

02/16/2016

This rule may become effective on:

02/23/2016

Authorized by:

Jon Pierpont, Executive Director

R994. Workforce Services, Unemployment Insurance.

R994-205. Exempt Employment.

R994-205-106. Exempt Real Estate Sales.

Employment does not include services as a licensed real estate agent if payment for such services is solely by way of commission.

(1) The "licensed" requirement refers to the license issued by the Utah Division of Real Estate to principal real estate brokers, associate real estate brokers, and real estate sales agents.

(2) The services performed as a real estate agent , as provided in Section 61-2f-201, must be performed pursuant to a written contract and include [are those ]activities generally associated with the sale of real property.[Such services include appraising property, advertising and showing property, closing sales, acquiring a lease to the property, and recruiting, training and supervising other salespersons. The services performed as a real estate agent do not include the management of property.]

(3) Services performed by a worker as a licensed real estate agent are exempt if all such services are paid solely by way of commission.

(a) If any part of the payment for real estate sales services is a salary, all of the services are covered employment and the total payment, salary and commission is subject to contribution payments.

(b) If a worker performing real estate sales services is guaranteed a minimum salary for any pay period in which sales commissions are less than the guaranteed minimum, all earnings are subject to contribution payments when the worker is paid the guaranteed salary. In any pay period in which the commissions equal or exceed the guaranteed salary, the earnings are considered to be solely by way of commission and are not subject to contribution payments.

(c) If a worker performing real estate sales services is given advances against future commissions and is required to repay any advances that exceed the commissions, the advances against future commissions are considered to be payment solely by way of commission.

(4) If a worker performs both commission sales services and other salaried services, such as an accountant, the sales are excluded from employment and the other services are included in covered employment. If the payment for all services is for the same pay period, the "included and excluded" provisions of Subsection 35A-4-205(2) are applied.

 

KEY: unemployment compensation, employment tests

Date of Enactment or Last Substantive Amendment: [July 1, 2007]2016

Notice of Continuation: March 25, 2015

Authorizing, and Implemented or Interpreted Law: 35A-4-205