When a broker employs a salesperson, the broker needs to:
Question & Answer
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provide annual pay increases in an amount no less than 3%.
California real estate law does not mandate annual pay increases of any specific percentage for salespersons. Compensation structures are typically outlined in the independent contractor agreement, but there are no legally required minimum increase amounts.
exercise reasonable supervision over the activities performed by the agent.
While brokers do exercise supervision over salespersons, this is a general requirement that applies to all states, not a specific California requirement as emphasized in this question. The question is looking for what specifically applies in California.
establish a retirement program for the agent.
provide minimal health and dental insurance coverage for the agent.
California law does not require brokers to provide health and dental insurance for salespersons. As independent contractors, salespersons typically arrange their own insurance coverage, though some brokerages may offer it as an optional benefit.
Why is this correct?
California law specifically requires brokers to establish a retirement program for salespersons they employ. This is a mandatory requirement that goes beyond general supervisory duties, making it the most accurate answer to what a broker 'needs' to do when employing a salesperson.
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