Statutory Non-employees Law and Legal Definition

There are two categories of statutory non employees-direct sellers and licensed real estate agents. Direct sellers are persons engaged in selling, or soliciting the sale of consumer products in the home or place of business, other than permanent retail establishments, or to any buyer on a “buy-sell,” a “deposit-commission,” or similar basis for resale in the home or at a place of business, other than a permanent retail establishment. This category also includes persons in the business of distributing or selling newspapers or shopping news, including related services. Licensed real estate agents are those engaged in appraisal for real estate sales, provided they earn income based on sales or other output. Direct sellers and licensed real estate agents are treated as self-employed for all federal tax purposes, including income and employment taxes, if:

1. Substantially all payments for their services as direct sellers or real estate agents are directly related to sales or other output, rather than to the number of hours worked; and

2. Their services are performed under a written contract providing that they will not be treated as employees for federal tax purposes.