Severance Pay for Real Estate Agents

Real estate agents are salespeople who represent buyers or sellers in transactions involving real estate. They work for licensed brokers to help people with deals involving their residential or commercial property. Some real estate agents are Realtors, which means they are registered with the Canadian Real Estate Association, and must follow a strict code of ethics.

These individuals deal with transactions involving detached houses, semi-detached homes, condos, residential buildings, apartment complexes, cottages, townhomes, duplexes, mansions, office buildings, industrial buildings and more. There are over 140,000 real estate agents in Canada, and they have been one of the fastest-growing jobs in the country.

Real estate agents are paid through commission.

• This means that the amount of money they make depends on how many properties they help buy or sell for their clients.
• The agent will earn a small percentage of the total value of the property (typically around 5% or so, depending on the province) following the transaction.
• Buying and selling agents usually share a 50/50 split on the commission. A real estate agent will then share around 30% of their pay with the brokerage.

According to Indeed, the average salary for a real estate agent working in Canada is over $125,000 per year.

A real estate agent typically falls under one of two main employment types:

• Employee: A real estate agent works full or part-time for a broker and provides their services to clients on behalf of their employer.
• Independent Contractor: The real estate agent chooses their clients, hours of work, level of pay or compensation, and uses their own materials or tools. They are sometimes misclassified as contractors when they are in fact employees of a company.

Fired or lost your job as a real estate agent?

If you are fired or lose your job working as a real estate agent in Canada, you have employment rights. This includes the right to full severance pay. Severance applies to non-unionized workers in either a provincially or federally regulated workplace.

Many companies anticipate that workers are largely unaware of their severance entitlements. In other cases, employers legitimately do not know what their obligations are to staff during the termination process.

Regardless of a company’s grasp on employment law, they are legally required to provide proper compensation following a termination.

READ MORE
• Layoffs in Canada
• Severance for federally regulated workers
• Provincially regulated employees and severance

Severance pay for real estate agents

In Canada, real estate agents may be owed up to 24 months of severance pay when they are fired or laid off from their job. This includes individuals working full-time, part-time, and hourly in Ontario, Alberta, or B.C.

Severance is the compensation a non-unionized worker receives from their employer when they are fired without cause. If you are fired for cause, you are likely still entitled to full severance.

• LEARN MORE: Severance pay by job

Your employer has the option of setting your termination date in the future and having you work until that time (working notice) or providing you with compensation instead (severance).

These concepts apply during challenging economic conditions, downsizing, the closure of a business, or major public health events such as the COVID-19 pandemic.

WATCH: Employment lawyer Lior Samfiru explains everything you need to know about severance pay on an episode of the Employment Law Show.

The employment lawyers at Samfiru Tumarkin LLP have represented tens of thousands of employees over the years in severance package negotiations.

We have successfully secured much larger amounts for individuals employed across a variety of positions, ranging from entry-level jobs to executives.

How to properly calculate severance pay

Employers often incorrectly calculate severance pay. There is a belief that severance pay is one week’s pay, two weeks’ pay, or a week for every year of service an employee has with the company.

For non-unionized employees, the main factors of termination or severance pay include age, length of service, position, bonuses, benefits, and the ability to find new work.

If you work as a real estate agent, you are likely a provincially regulated employee. That means your severance package must consider:

• Your minimum severance pay as a provincially regulated employee, which is determined by each individual province.
• Your full severance pay according to our legal system (common law) which can be as much as 24 months’ pay.

To figure out how much compensation you may be entitled to, use our firm’s Severance Pay Calculator.

ADDITIONAL RESOURCES
• Severance Pay in Ontario
• Alberta severance packages
• Understanding severance in B.C.
• Layoffs in Canada

Don’t sign on the dotted line!

Do not accept any severance offer, termination papers or exit agreement that your company may provide you with. Once you sign back these documents, you eliminate your ability to negotiate a fair and proper severance package.

Wrongfully dismissed?

If you lose your job as a real estate agent, there is a chance that you have been wrongfully dismissed. A wrongful dismissal in Canada happens when you are fired or permanently laid off by your employer and are not given a proper severance package.

An employment lawyer at Samfiru Tumarkin LLP can analyze your situation and explain how much compensation you may be owed.

Changes to your job

If you are a real estate agent, you do not have to accept a significant change to your job. Large modifications, such as a demotion, cut in pay, reduction in hours, negative changes to commission, are illegal.

When the terms of your employment are significantly changed, the law allows you to resign from your job and seek full severance pay through a constructive dismissal claim.

Independent contractor? Think again

If you were hired as a real estate agent, but treated like an independent contractor, there is a significant chance that you are actually an employee.

Brokerages and employers in the real estate industry often misclassify employees as contractors. They do this either unknowingly, or to avoid acknowledging certain employment rights like minimum wage, vacation and overtime pay, and severance when the individual is fired.

A company can’t avoid the issue by having an individual sign an employment contract, which indicates that they are a contractor rather than an employee.

Our legal system provides guidelines for determining whether someone is a contractor or employee. Use Samfiru Tumarkin LLP’s Pocket Employment Lawyer to find out what you are right now. Contact us so we can help you get proper severance, as we have done for many real estate agents across Canada.

Harassment

Someone working in a position as a real estate agent does not have to tolerate any form of harassment in the workplace, from either coworkers or managers. Employers must investigate and respond appropriately to allegations of harassment and abuse.

If your company is creating, or allows for the creation of, a hostile or toxic work environment, this could be grounds for a constructive dismissal.

Contact an employment lawyer at Samfiru Tumarkin to explore your rights.

Temporary layoffs

Temporary layoffs occur when an employer significantly reduces or completely stops an employee’s employment. There is usually a mutual understanding from both sides that the employee will be called back to work, to the same position, after a reasonable period of time.

It is important for real estate agents to understand that temporary layoffs are considered illegal, unless you agree to the layoff or it is addressed in your employment contract.

You have the option to wait to be called back, or can treat this as a termination through a constructive dismissal and pursue severance.

Fired for medical reasons?

If your medical condition was in any way a factor in your employer’s decision to fire you while you are on leave, you may be able to file a human rights claim. Your employer cannot let you go due to medical issues or a disability.

If an employee is terminated without cause for reasons unrelated to their medical leave or disability, this is legally permissible, as long as the company provides proper severance pay.

Your employer may also legally fire you while on medical leave if:

• You are dismissed for reasons which sufficiently establish just cause
• Your employment contract has been frustrated

Long-term disability denied? Don’t appeal

If you are a real estate agent and your long-term disability claim is denied by your insurance provider, you will likely receive a letter inviting you to appeal the decision.

While it might seem like a good idea to do so, in almost all cases, the appeals process will be handled by the same insurer that denied your claim.

Insurance companies make money by not paying claims. They often use the appeals process (sometimes leading claimants to request multiple appeals) to run out the clock on your ability to file a claim against them to get the money you are owed.

If your long-term disability claim is denied, cut off, or comes under “investigation”, contact Samfiru Tumarkin LLP immediately.

LEARN MORE
• Appealing a long-term disability claim denial
• Disability in the Workplace: Your Rights

Employment lawyers for real estate agents

The experienced employment law team at Samfiru Tumarkin LLP has helped tens of thousands of individuals across Ontario, Alberta, and B.C. enforce their rights.

Our lawyers in Toronto, Ottawa, Calgary, and Vancouver stand ready to help you solve your workplace issues.

If you are a real estate agent who needs help with an employment issue, contact us or call 1-855-821-5900 to get the advice you need, and the compensation you deserve.