Minimum wage violations and mystery shopping

Lets say the minimum wage is $12- 15 per hour in your state or city. The shop pays $10 for a department store shop as an example. The shop could take from 30, 45 or 60 minutes. Then there is admin work to fill out on the shop which could take 15 minutes or longer depending on the questionnaire. Are these companies violating labor laws?

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Minimum wage laws do not apply to independent contractors. So, no, the MSC's are not in violation of labor laws.

Hard work builds character and homework is good for your soul.
No, they are not, as you are not an employee. You are an independent contractor and are free to accept or decline work as you decide.
We are contractors, not employees, so we are not covered by the minimum wage laws.
In this business many of us set our own personal minimum wage in order to decide if it is worth it to do a shop as advertised.
I'm not sure that's accurate for Nevada. I know the shops can't be reimbursement only, and the shoppers have to be paid at least every two weeks, but I don't think the minimum wage laws apply. I'd like to know more about that.
@Sandy Shopper wrote:

I'm not sure that's accurate for Nevada. I know the shops can't be reimbursement only, and the shoppers have to be paid at least every two weeks, but I don't think the minimum wage laws apply. I'd like to know more about that.
A closer look pays the least of any shopping company in Nevada for work done. I know that some of the other mystery shopping companies were having the board look into it, but I don’t know that they completely followed through with it.
@SoCalMama wrote:

@Sandy Shopper wrote:

I'm not sure that's accurate for Nevada. I know the shops can't be reimbursement only, and the shoppers have to be paid at least every two weeks, but I don't think the minimum wage laws apply. I'd like to know more about that.
A closer look pays the least of any shopping company in Nevada for work done. I know that some of the other mystery shopping companies were having the board look into it, but I don’t know that they completely followed through with it.

It's my understanding that all of the mystery shopping in Nevada bends the rules of hourly pay to have shoppers agree to a pre-set time allotment for any assignment (I.e. if a shop pays $10, they set your pay at $20/hour and just pay you for 30 minutes).

When I worked as an employee shopper in CA would would clock in/out when entering the store, and when submitting reports. That was the only truly fair payment for shopping I have ever experienced...
@jennifer2016 wrote:

Lets say the minimum wage is $12- 15 per hour in your state or city. The shop pays $10 for a department store shop as an example. The shop could take from 30, 45 or 60 minutes. Then there is admin work to fill out on the shop which could take 15 minutes or longer depending on the questionnaire. Are these companies violating labor laws?
If you want such protections, then your state needs to regulate mystery shopping similar to how Nevada does. Without them, you are 100% IC, and therefore set your own hourly wage.
@SoCalMama wrote:

@Sandy Shopper wrote:

I'm not sure that's accurate for Nevada. I know the shops can't be reimbursement only, and the shoppers have to be paid at least every two weeks, but I don't think the minimum wage laws apply. I'd like to know more about that.
A closer look pays the least of any shopping company in Nevada for work done. I know that some of the other mystery shopping companies were having the board look into it, but I don’t know that they completely followed through with it.
I would say that ACL might possibly be in violation of NV law in this respect, but to ensure they play by the rules like other NV companies would probably require an accusation, filing a formal charge, and some person(s) to dedicate enough time and resource to conduct an investigation to turn up enough proof of the violation. This process may well be already under way. The sad thing that amazes me is that there are enough NV shoppers who perpetuate and endorse the aleged violation by continuing to do these jobs at much, much less than minimum wage.
The more I try to find solid info on the Nevada situation, the more confusing it is. I read several articles that state that mystery shoppers in Nevada must be employed under a PI, which would make them an employee. But the vast majority of mystery shopping companies have shoppers sign ICAs, making them independent contractors. Can a shopper be both an employee and an IC at the same time for the same shop? Scratching my head.
Good question! Hmm. Has anyone ever performed the same shop type as an employee in Nevada and in another state as an IC? If so, does this screw up the route payments? Do tell...

@Sandy Shopper wrote:

The more I try to find solid info on the Nevada situation, the more confusing it is. I read several articles that state that mystery shoppers in Nevada must be employed under a PI, which would make them an employee. But the vast majority of mystery shopping companies have shoppers sign ICAs, making them independent contractors. Can a shopper be both an employee and an IC at the same time for the same shop? Scratching my head.

As I slowly grow wise I grow briskly cautious. - Mark Twain
Depends on the company. Some give the option of Nevada or the rest of the world...but not both. Others are fine with it since they are outsourcing the shops through the PI companies anyway.

@Shop-et-al wrote:

Has anyone ever performed the same shop type as an employee in Nevada and in another state as an IC?

@Sandy Shopper wrote:

The more I try to find solid info on the Nevada situation, the more confusing it is. I read several articles that state that mystery shoppers in Nevada must be employed under a PI, which would make them an employee. But the vast majority of mystery shopping companies have shoppers sign ICAs, making them independent contractors. Can a shopper be both an employee and an IC at the same time for the same shop? Scratching my head.
@Shop-et-al wrote:

Good question! Hmm. Has anyone ever performed the same shop type as an employee in Nevada and in another state as an IC? If so, does this screw up the route payments? Do tell...

Yes, I have done this since 2009 and continue to do so on a regular basis. I fill out a 1040 for all my NV shops and attach a Schedule C for my non-NV shops, for which I use a different business name. Suppose I do a Company A gas station audit located in NV and I do the same audit for a Company A gas station located in AZ. The main differences are that the exact same audit at Company' A's NV location pays me more than the one in AZ, and I usually wait much longer to get paid for shops not located in NV.

Bonus pay for travel is negotiated the same way no matter. The only difference is that it is reported on 1099 and Schedule C for work completed outside NV, and it is reported on W-2 and 1040 for work completed inside NV.

Edited 1 time(s). Last edit at 03/11/2020 02:26AM by AZwolfman.
@AZwolfman wrote:

@SoCalMama wrote:

@Sandy Shopper wrote:

I'm not sure that's accurate for Nevada. I know the shops can't be reimbursement only, and the shoppers have to be paid at least every two weeks, but I don't think the minimum wage laws apply. I'd like to know more about that.
A closer look pays the least of any shopping company in Nevada for work done. I know that some of the other mystery shopping companies were having the board look into it, but I don’t know that they completely followed through with it.
I would say that ACL might possibly be in violation of NV law in this respect, but to ensure they play by the rules like other NV companies would probably require an accusation, filing a formal charge, and some person(s) to dedicate enough time and resource to conduct an investigation to turn up enough proof of the violation. This process may well be already under way. The sad thing that amazes me is that there are enough NV shoppers who perpetuate and endorse the aleged violation by continuing to do these jobs at much, much less than minimum wage.

I kind of love you right now. smiling smiley
@Sandy Shopper wrote:

The more I try to find solid info on the Nevada situation, the more confusing it is. I read several articles that state that mystery shoppers in Nevada must be employed under a PI, which would make them an employee. But the vast majority of mystery shopping companies have shoppers sign ICAs, making them independent contractors. Can a shopper be both an employee and an IC at the same time for the same shop? Scratching my head.

For tax purposes , NV shoppers are technically employees. Practically speaking, NV shoppers are Independent Contractors, since they choose their own jobs and working hours and do not receive benefits such as company medical insurance or unemployment insurance. It's confusing, but the answer to your question is yes - technically employees but functionally IC..
@SteveSoCal wrote:

Depends on the company. Some give the option of Nevada or the rest of the world...but not both. Others are fine with it since they are outsourcing the shops through the PI companies anyway.

There is only one company that I know of that is licensed in NV that refuses to allow NV shoppers to shop outside the state. I cannot imagine why that company has that rule.
@SteveSoCal wrote:

@SoCalMama wrote:

@Sandy Shopper wrote:

I'm not sure that's accurate for Nevada. I know the shops can't be reimbursement only, and the shoppers have to be paid at least every two weeks, but I don't think the minimum wage laws apply. I'd like to know more about that.
A closer look pays the least of any shopping company in Nevada for work done. I know that some of the other mystery shopping companies were having the board look into it, but I don’t know that they completely followed through with it.

It's my understanding that all of the mystery shopping in Nevada bends the rules of hourly pay to have shoppers agree to a pre-set time allotment for any assignment (I.e. if a shop pays $10, they set your pay at $20/hour and just pay you for 30 minutes).

When I worked as an employee shopper in CA would would clock in/out when entering the store, and when submitting reports. That was the only truly fair payment for shopping I have ever experienced...

In other businesses, this is called "Flat Rate." Flat Rate is how automobile mechanics get paid. The flat rate amount is what it would take an average worker to complete the job. It is widely known and often expected that a good experienced worker will usually be able to complete the job in less time and, in effect, earn more $$ per hour.
@AZwolfman wrote:

It is widely known and often expected that a good experienced worker will usually be able to complete the job in less time and, in effect, earn more $$ per hour.

Sadly, that's not the case with MSing in Nevada....
Actually, it is true in any state including Nevada. An good experienced worker can usually complete a job in less time than a novice.
@AZwolfman wrote:

Actually, it is true in any state including Nevada. An good experienced worker can usually complete a job in less time than a novice.

Sorry, I quoted the wrong section. I meant that the Flat Rate in NV for most shops is way below the expected time it takes to perform and report the shops....even at $5/hr.
I know absolutely nothing about how Nevada works but the situation of how it is set up sounds like what happens when a Real Estate Agent works for a Registered Broker. At least that is how it is done in California. But that does not make the Real estate agent an employee.
Also how would they figure out how long it takes to do a shop if they paid by the hour? Would it just be an honor system or would they read the posts here that I see shoppers write always reporting how they can do 6 of the $10 shops in an hour. I scratch my head thinking I would be lucky to do one in an hour which is why I do not do them. Or they can refer to the schedulers assessment of the fast and easy shops. (which would also take an hour for me). Based on those yardsticks they would only have to pay $3 per shop and claim the shopper can earn$18 an hour.

@Sandy Shopper wrote:

The more I try to find solid info on the Nevada situation, the more confusing it is. I read several articles that state that mystery shoppers in Nevada must be employed under a PI, which would make them an employee. But the vast majority of mystery shopping companies have shoppers sign ICAs, making them independent contractors. Can a shopper be both an employee and an IC at the same time for the same shop? Scratching my head.
@sandyf wrote:

how would they figure out how long it takes to do a shop if they paid by the hour?

I don't think they even attempt to do that. They decide out how much they are willing to pay for the assignment, then simply assign a time value that matches the price point.

There are fine dining shops in NV that pay $15 and minimum wage there is over $8, so how can one possibly start and finish the assignment in under 2 hours for a 3-course meal with bar? Even at $25 the numbers often don't add up.
The last that I heard, 2 NV state agencies were fighting for dominance of their version of the NV law. One was the PI Licencing Bureau and, if I recall correctly, the other was part of the State Dept of Labor. Both sent speakers to a session at an IMSC conference and the two declined to speak to one another. Very tense.

Based in MD, near DC
Shopping from the Carolinas to New York
Have video cam; will travel

Poor customer service? Don't get mad; get video.
Even though mystery shoppers are typically ICs, this is still a good question. If you are running your own business but making less than minimum wage, you need to re-evaluate your rates. You can definitely make more. You should work more efficiently and not take $10 jobs that last an hour. Take the $10 jobs that take five minutes and are on your way to a $30 or $50 or $90 job. Research, plan, and negotiate. Don't work for peanuts.
@SteveSoCal wrote:

@sandyf wrote:

how would they figure out how long it takes to do a shop if they paid by the hour?

I don't think they even attempt to do that. They decide out how much they are willing to pay for the assignment, then simply assign a time value that matches the price point.

There are fine dining shops in NV that pay $15 and minimum wage there is over $8, so how can one possibly start and finish the assignment in under 2 hours for a 3-course meal with bar? Even at $25 the numbers often don't add up.

Yes, the companies I shop for in NV do attempt to figure out how long it takes to do a shop. I have, on occasion, been asked how long it takes me, on average to write the reports on certain shops. The reason given to me was that they wanted to make sure they were paying enough for time spent and to meet minimum wage requirement. My favorite 3 NV companies do listen to shoppers' feedback, and they often ask for our feedback. They all also have staff members who actually shop some of the shops, especially the ones that shoppers don't apply for. So staff has some idea of what is involved in the shops.

The only place where I have seen fine dining shops that paid $15 or less in NV are those offered by the company that IMO is possibly in violation of the law in NV.
I won't say all of you guys are incorrect. But none of you actually catch the essence. So allow me to illustrate the complication.

It is in fact a very complex process to determine whether you are an employee or IC. To make thing simple - because the agreement with a MSP is generally enforceable, mystery shopper is assumed as an IC.

However, this assumption is rebuttable. Because each state enforces different labor law (such as minimum wage), so even when a mystery shopper can be classified as an employee in one state, it is not necessarily true in another state. The rule of thumb of such classification depends on the control of the master (employer/principal) vs the subordinates (employee/agent), as well as other factors. The more control the master has, the more likely the servants are employees.

On the other hand, many MSPs understand such complication. So they generally set job pay about the state's minimum wage. In that case, they can eliminate conflicts with their subordinates, as well as the state's labor enforcement agency.

NV is always an exception because: 1) the AG's opinion making mystery shoppers subject to PI licensing requirements; and 2) the NV law makes all subordinates subject to PI licensing requirements employees. That's why a mystery shopper in NV must be an employee.
@AZwolfman wrote:

Yes, the companies I shop for in NV do attempt to figure out how long it takes to do a shop. I have, on occasion, been asked how long it takes me, on average to write the reports on certain shops. The reason given to me was that they wanted to make sure they were paying enough for time spent and to meet minimum wage requirement.

Admittedly it's been a few years since I worked in NV and perhaps things have changed, but there were few dining shops that met the standard for paying $8/hour including time at the restaurant when I was working there.

The staff at the PI firms I worked for were very nice, and caring, and understood the shops well. They were often just up against what the contracting MSC was willing to pay for the assignments.

That said, when I worked there, I was able to set my price for any of the assignments they specifically asked me to handle, and was paid fairly. My comments are based on shop pricing that I saw offered for other assignments.
I live in Georgia. The minimum wage is 7.25. I tell the MSP that I want minimum wage for PAD or incentive. For example, if it's an hour there and an hour back I want 14.50 PAD or incentive. But I do cut them breaks when I need to round out the routes. Or if they are giving me multiple assignments. I do add Citgo's and Marathon's to routes as well to cover food stops and gas, but never for 7 dollars, usually for 10 or better.

Edited 1 time(s). Last edit at 03/13/2020 05:51AM by F and L TeleComm.
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