NY Says Mystery Shoppers are Independent Contractors

busy shopping mallFrom FindLaw, the New York Supreme Court Appellate Division concluded that mystery shoppers were independent contractors and not employees.  In Re:  The Claim of Joseph Chan.  The court said:

“The existence of an employer-employee relationship is a factual issue for the Board to resolve and “turns on whether the purported employer exercises control over the results produced or, more importantly, the means by which those results are produced” (Matter of Medical Transcription Plus [Commissioner of Labor], 302 A.D.2d 689, 690 [2003];  see Matter of Empire State Towing & Recovery Assn., Inc. [Commissioner of Labor], 15 NY3d 433, 437 [2010] ).   Here, claimant signed up for assignments through MFI’s website and had the discretion to choose any assignment that he desired.   Significantly, claimant could work as much or as little as he wanted, as evidenced by the fact that there were three-month periods in which he did not select any assignments because there were none that he found “worth [his] while.”   MFI did not supervise claimant, provide him with employment reviews or training or reimburse him for travel expenses.   At the same time that he performed mystery shopping services to MFI, claimant was also providing such services to other companies.   MFI paid claimant a fixed fee for each assignment, and no taxes were withheld from that fee.

Although MFI required claimant to fill out a questionnaire for the benefit of the retailer regarding each assignment that he performed—which was reviewed by MFI to verify that the services were performed—this fact is “just as readily required of an independent contractor as of an employee” (Matter of Hertz Corp. [Commissioner of Labor], 2 NY3d 733, 735 [2004] [internal quotation marks and citation omitted] ).   Accordingly, inasmuch as we find that the requisite control is lacking, we reverse the Board’s decision (see Matter of Lee [Commissioner of Labor], _ AD3d _, _, 4 NYS3d 778, 779 [2015];  Matter of Jhaveri [Commissioner of Labor], _ AD3d _, _, 2015 N.Y. Slip Op 03019, *1 [2015] ).1  Finally, in contrast to Matter of Pozarycki (Customer Mktg. Servs.—Commissioner of Labor) (292 A.D.2d 661 [2002] ), here, MFI did not send claimant assignments or reimburse him for travel expenses (see id. at 662)…”

The court concluded that the mystery shopper was an independent contractor.

Read the full decision at IN RE: the Claim of JOSEPH CHAN

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