Broker Employment Agreement for the United States

Broker Employment Agreement Template for United States

A legally binding agreement that establishes the employment relationship between a broker and their employing firm in the United States. It outlines the terms of employment, compensation structure, duties, obligations, and compliance requirements under federal and state laws. The agreement addresses licensing requirements, commission structures, territory assignments, and performance expectations while ensuring compliance with industry-specific regulations such as FINRA, RESPA, or state insurance laws.

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What is a Broker Employment Agreement?

The Broker Employment Agreement is essential for establishing clear terms between brokers and their employing firms in regulated industries. This agreement is particularly important in the United States where various federal and state regulations govern broker activities. It typically includes detailed provisions about compensation structures, performance expectations, compliance requirements, and territorial rights. The document helps ensure compliance with industry-specific regulations while protecting both parties' interests. The agreement is commonly used when hiring new brokers or formalizing existing relationships, and can be customized for different sectors including real estate, securities, insurance, or commodities trading.

What sections should be included in a Broker Employment Agreement?

1. Parties: Identifies the broker and the employing firm/company

2. Background: Establishes context and purpose of the agreement

3. Definitions: Defines key terms used throughout the agreement

4. Appointment and Scope: Details the broker's role, responsibilities, and territory

5. Licensing Requirements: Specifies required licenses and certifications

6. Compensation: Details commission structure, payment terms, and any base salary

7. Term and Termination: Duration of agreement and termination conditions

8. Confidentiality: Obligations regarding confidential information

9. Governing Law: Specifies applicable jurisdiction and laws

What sections are optional to include in a Broker Employment Agreement?

1. Non-Compete: Restrictions on competitive activities during and after employment

2. Insurance Requirements: Specifications for required insurance coverage and maintenance

3. Training Requirements: Details of mandatory training programs and continuing education

4. Performance Metrics: Specific performance targets, evaluation criteria, and review processes

What schedules should be included in a Broker Employment Agreement?

1. Commission Schedule: Detailed breakdown of commission rates and calculations

2. Territory Map: Geographic area of broker's operations

3. Required Licenses: List of required licenses and certifications

4. Company Policies: Relevant company policies and procedures

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Genie AI

Document Type

Broker Agreement

Cost

Free to use
Clauses
Industries

Fair Labor Standards Act (FLSA): Federal law establishing minimum wage, overtime pay, recordkeeping, and child labor standards. Essential for determining compensation structure and employment classification.

Internal Revenue Code: Federal tax regulations crucial for determining broker classification (employee vs. independent contractor) and tax withholding obligations.

Securities Exchange Act of 1934: Federal law governing securities trading and broker-dealer relationships, particularly relevant if the broker deals with securities.

Equal Employment Opportunity Laws: Federal laws including Title VII, ADA, and ADEA that protect against workplace discrimination and require equal treatment in employment.

Immigration Reform and Control Act (IRCA): Federal law requiring employers to verify employment eligibility of all employees.

State Labor Laws: State-specific regulations governing employment relationships, working conditions, and labor rights.

State Licensing Requirements: State-specific regulations determining broker licensing, qualifications, and ongoing compliance requirements.

State Wage and Hour Laws: State-specific regulations governing minimum wage, overtime, and payment schedules, which may exceed federal requirements.

State Non-Compete Regulations: State-specific rules governing the enforceability and limitations of non-compete clauses in employment agreements.

State Commission Rules: State-specific regulations governing commission payments, structures, and timing of payments to brokers.

Real Estate Settlement Procedures Act (RESPA): Federal law governing real estate settlement processes and disclosures, particularly relevant for real estate brokers.

FINRA Regulations: Financial Industry Regulatory Authority rules governing securities brokers and their relationships with firms.

State Insurance Regulations: State-specific rules governing insurance broker conduct, licensing, and client relationships.

Statute of Frauds: Legal doctrine requiring certain contracts to be in writing to be enforceable.

Contract Formation Rules: State-specific requirements for valid contract formation, including offer, acceptance, and consideration elements.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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