| Many mortgage lenders/brokers treat their
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| | that can bankrupt a company, or even file
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| loan officers (who are their
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| | criminal charges against the owners.
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| salespersons) as independent contractors.
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| | Once the IRS has come in, other federal
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| Those loan officers are paid on a
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| | and state agencies follow right behind
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| commission based on the successful
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| | them and assess their fines and penalties
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| funding of a loan. The mortgage lenders
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| | as well. If there is anything left, the
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| brokers pay the loan officers either as
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| | loan officer can sue for unemployment
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| each transaction closes or on a periodic
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| | compensation, retirement benefits, profit
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| basis. The amount paid to the loan
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| | sharing, vacation pay, disability or any
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| officer contains no deduction for
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| | other benefit that he/she would have
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| federal, state or local taxes.
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| | received as an employee. Many mortgage
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| Frequently, the loan officer does not
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| | companies have gone out of business
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| receive any benefits, such as
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| | because they treated many of their loan
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| company-paid health insurance or paid
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| | officers as independent contractors and
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| sick or vacation time. At the end of
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| | did not comply with wage-and-hour lawsHow
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| each year, the mortgage lenders/brokers
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| | does the Internal Revenue Service or
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| issue IRS Form 1099s to their loan
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| | Department of Labor find out about you?
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| officers.As a mortgage lender/broker, you
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| | Usually, a dismissed loan officer will
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| cannot classify whether your loan
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| | file for unemployment benefits or a
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| officers are independent contractors or
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| | disgruntled loan officer will make a
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| employees. That task has been given to
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| | telephone call to the agency. And the
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| the Internal Revenue Service, the U.S.
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| | agency will always follow up.You should
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| Department of Labor, your state
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| | also be aware that the agency that
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| unemployment insurance agency, your state
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| | approved your lender/broker license
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| department of labor and your state
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| | considers the loan officers to be
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| workers compensation insurance agency.
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| | employees because you have responsibility
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| Although each agency has its own
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| | for their actions. Although some states
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| guidelines, typically the determination
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| | do not require that the loan officers be
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| turns on the degree of control that the
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| | W-2 employees, they will not care how you
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| mortgage lender/broker exercises and the
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| | classify the loan officer who is in
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| degree of independence that the loan
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| | regulatory hot water. The Banking
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| officer enjoys. When the mortgage lender
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| | Departments are concerned that your
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| broker has the right to dictate what will
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| | company supervises the people operating
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| be done and how it will be done, then the
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| | under the auspices of your license. This
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| loan officer is an employee. The
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| | requires that you supervise the
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| government agencies look at facts
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| | activities of your loan officers
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| concerning the behavioral control of the
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| | regardless of whether you pay them as
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| loan officer, the financial control of
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| | employees or as independent contractors.
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| the loan officer and the relationship
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| | After all, you are responsible for any
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| between the mortgage lender/broker and
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| | violations of the mortgage lender/broker
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| the loan officer. The Internal Revenue
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| | law, rules and policies committed by
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| Service has a 20 factor test to determine
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| | anyone, including a loan originator,
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| whether an employer/employee relationship
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| | operating under your license. Therefore,
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| exists. Such factors include whether the
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| | it's in your best interests to supervise
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| loan officer has to comply with
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| | them.This Article is designed to be of
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| instructions, gets training from the
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| | general interest. The specific
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| mortgage lender/broker, works exclusively
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| | information discussed may not apply to
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| for the mortgage lender/broker, whether
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| | you. Before acting on any matter
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| the loan officer can independently hire
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| | contained herein, you should consult with
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| assistants, whether the loan officer has
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| | your personal legal and accounting
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| set hours of work, whether there is a
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| | adviser.Robin M. Gronsky has been
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| continuing relationship, and whether
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| | practicing law since 1982. She is
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| regular reports must be given to a
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| | admitted to practice in New York, New
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| supervisor. The IRS seems to have a bias
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| | Jersey and Florida.As a former general
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| towards finding an employer-employee
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| | counsel of a national mortgage lender,
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| relationship. Even if the mortgage
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| | Ms. Gronsky is experienced in corporate
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| lender/broker has a written agreement
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| | matters, mortgage licensing on a
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| with the loan officer classifying him/her
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| | nationwide basis, and all facets of real
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| as an independent contractor, that is not
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| | estate transactions.Ms. Gronsky graduated
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| binding on any federal or state agency.If
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| | magna cum laude from the State University
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| you have been treating your loan officers
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| | of New York at Buffalo and received her
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| as independent contractors, when in
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| | J.D. from Boston University School of
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| reality, they pass the 20 factor test as
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| | Law.Ms. Gronsky's practice is geared to
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| employees, what are the ramifications?
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| | maintain personal contact with her
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| If the Internal Revenue Service or
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| | clients and develop a close-working
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| Department of Labor find you have
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| | professional relationship over a long
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| misclassified employees, they will
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| | period of time. This helps assure that
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| require you to pay back withholding taxes
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| | her clients' work will be performed by
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| plus interest, or they can assess fines
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| | the lawyer they have chosen.
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