Broker Lets Salespeople Be Employees

April 1, 1997

JACKSONVILLE, Fla.--"We're competing with other industries for salespeople," says Walter Williams Jr., president, Coldwell Banker--Walter Williams Realty Inc., "and other industries have these programs. So we're at a competitive disadvantage for the top-quality salespeople."

Williams is referring to benefit programs that include 401k plans, medical and life insurance, unemployment compensation, and workmen's compensation. And he knows whereof he speaks, because his company has begun to offer its salespeople all those benefits through its Best Agent program.

Under Best Agent, the company's 120 salespeople can become employees, not independent contractors, and receive benefits if they

  • Are full-time salespeople who earn at least $15,000 per year in net commissions
  • Prepare annual and monthly goals regarding listings, sales, outgoing referrals, number of contacts to make, and education plans
  • Complete the company's education program in a timely manner

The plan has been in the works for about three years. "We've been running a test program off and on, experimenting with different methods of trying to accomplish it," Williams says. "In the last year, we started to refine the program, and over the last six months we got very comfortable, so we rolled the program out."

Williams was able to create the program at no cost to his company by working with TeamStaff, which specializes in employee hiring and benefits. "The program didn't cost us anything," he says, "because TeamStaff was so interested in doing the program with us that it paid the accountants' and attorneys' fees."

Even though the company has reduced the salespeople's portion of the company's commission to cover the program's costs, the plan takes no additional money out of his salespeople's pockets, says Williams. "They're coming out just as well as or better than they would have on an after-tax basis."

And as employees, not independent contractors, salespeople are no longer bound to the drudgery of filing quarterly federal income tax estimates. "Most of them don't do it or don't do a good job," Williams says. "So when March and April come around, they're scratching around trying to find enough money to pay their income tax. One of my salespeople who was in the experimental program told me she'd never go back to being an independent contractor."

About half of Williams' salespeople qualify for the program, and so far, about half of those eligible want to participate. "We think that in about two years most of our qualified salespeople will be in the program," says Williams.

A Tip From a Broker Who Knows

Walter Williams Jr. says he couldn't have offered his salespeople the Best Agent benefits program if he didn't also use a leasing program for his office employees.

For several years, the president of Coldwell Banker--Walter Williams Realty Inc., Jacksonville, Fla., has leased his office staff. The workers are Williams' employees, but an outside company administers the payroll and benefits plans. "It does everything we have to do to comply with all the laws," says Williams, "and we pay a small monthly fee."

Williams then realized he could also use the same company to create a benefit plan for his salespeople. And it offered a side advantage. "By using the employee leasing company to create the plan," Williams says, "we could actually offer better benefits to our current employees because the leasing company offered a much broader base of benefits than we could ever have offered."

If you turn to an employee leasing company to handle your office employees or a salesperson benefit plan, Williams offers one caveat: "Be very careful about any leasing company you do business with, because you're sending it your payroll and payroll taxes and depending on it to pay your employees and deposit funds with the federal government. You have to make sure that company is very financially secure."

freelance writer

G.M. Filisko is a Chicago area freelance and former editor for REALTOR® Magazine. 

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