What is a Statutory Employee?
Full Question:
We are a mortgage company that employees originators. Since we are FHA lenders HUD requires these originators to be exclusively employed paid W-2 employees. We do not house any originators in our office. No different than a Real Estate Agent other than FHA requires the originator to be paid W-2. Would they be considered a Statutory Employee?
02/04/2009 |
Category: Employment |
State: Colorado |
#15151
Answer:
A statutory employee is a worker who is treated as an employee for social security and Medicare tax purposes and as self-employed for income tax purposes. The federal code lists the following four occupational groups as not being employees under the common law, but are employees under the statutory rules:
1. Agent Drivers or Commission Drivers: Must be licensed, paid on a commission basis, and a contract must exist stating the agent will not be an employee for federal tax purposes.
2. Full-time Life Insurance Salesperson (one company)
3. Homemakers: Work at home for one employer making clothing, needlecrafts, bedspreads, buttons, quilts, gloves, etc.
4. Traveling and city salespersons -- persons working full-time to solicit orders from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer's business operation. The work performed must be the salesperson's principal business activity.
The following are Statutory Non-Employees according to the Federal code. According to the Federal Code, the following are considered not to be employees, but are independent contractors under statutory rules.
1. Qualified Real Estate Agent: Must be licensed, paid on a commission basis, and a contract must exist stating the agent will not be an employee for federal tax purposes.
2. Direct Seller: Sells consumer products outside a permanent retail establishment, is paid on a commission basis, and a contract must exist stating the salesperson will not be an employee for federal tax purposes.
