california legal ruling threatens mystery shopping industry

Maintaining the Independent Contractor status of mystery shoppers is critical to the survival of the Mystery Shopping Industry.  The recent California Supreme Court ruling in the Dynamex case just made things a lot scarier, by applying a new test to establish independent contractor relationships. A test that is widely considered the most difficult one to satisfy.

Prism is dedicated to helping our clients and industry partners stay safely on the right side of this and we have numerous, unique advantages in place to help protect you.

Please note that we are not attorneys and nothing in this document can be construed as legal advice. We strongly encourage you to work with your counsel to review your specific situation in light of this new ruling. For MSPA members, they have some great information and resources available – please check them out. And if you are not a member, please consider joining.

Independent Contractors Register with Us, Not You

The Prism database contains approximately 1,000,000 registered Independent Contractors – all of whom have registered with iSecretShop – not with specific MSPs.

In your role as a broker between your clients’ projects and the IC’s who perform mystery shopping services, you are bringing our shoppers to the project. Using ICs from 3rd parties like us adds a critically important layer of insulation – and we can make a million of them available to you.

In addition, Prism offers scheduling services to our clients as well – so you can further insulate by outsourcing that entire aspect of your operation. We host a truly superlative Fulfillment Team, able and eager to get your clients’ projects completed with our shopper force.

Contractors Advertise Their Services, Employees Don't

One of the most challenging components of the California test is determining if the IC is, “…customarily engaged in an independently established trade, occupation or business of the same nature as that involved in the work performed for hiring.” In other words, in part, you need to show that the IC does mystery shopping work regularly, as a business or as their trade. Here Prism can help in multiple ways:

Unlike employees, contractors advertise their services. By registering with iSecretShop, contractors are immediately making themselves visible to dozens of MSPs with open opportunities – advertising to the MSPs that they are interested in work and available for contact and consideration.

Contractors Work for Multiple Businesses, Employees Don't

iSecretShop serves as a job board: A portal where shoppers can log in, review, accept and complete assignments for every MSP on the platform in one place. Our shoppers typically perform work for multiple MSPs, and we can document that if necessary. In addition, many of our shoppers sign the IC Agreements of every MSP on the system, whether they do shops for them yet or not – so we can document not just that they’ve advertised themselves to multiple companies, but that they have taken assignments from multiple companies AND that they have signaled their intent to work for even more. Again, we are not lawyers – and not giving legal advice here – but we believe this unique-to-Prism capability may prove to be quite helpful to making your case.

3rd Party Industry Certifications Help the Shoppers, Your Clients and You

Another way to demonstrate that mystery shopping is a part of the IC’s trade or occupation is their use of Certifications. When Independent Contractors have sought out and received industry certifications from third parties, it helps everyone. iSecretShop hosts an outstanding shopper certification resource: – where shoppers can take a variety of free and paid courses and earn meaningful certifications demonstrating their mastery of everything from General Mystery Shopping to Video Shopping, Using a Mobile Device and much more.

New courses are being added as well – in categories such as Fine Dining, Financial Industry shops, Advanced Mystery Shopping and a catalog of others. And our MSPs can even request or require certain certifications in order to accept projects. So you can guarantee you are only using third party certified shoppers if you choose.

Contractors Submit Invoices, Employees Don't


Another powerful tool in your arsenal at Prism is our integrated, automatic IC Invoicing feature. Contractors submit invoices to be paid. Employees do not. So the Prism system automatically generates an invoice (from the contractor to you) whenever they submit a report for review. These invoices reference the specific job details, include the agreed-upon compensation amount (and any expected bonuses) as well as any expected reimbursement. All associated receipts are attached and the invoices are dynamic, so they update from Open to Paid as soon as you pay them.

Additionally, the invoices are designed to help define the shopper as an Independent Contractor by referencing their business phone and business address information, not personal. 

The Threat Continues

Protecting and preserving the Independent Contractor status of mystery shoppers is of critical importance to the industry and to the sustainability of the services you provide. The state-by-state legislative environment is becoming increasingly antagonistic. Prism is dedicated to working with you to help protect against this increasing threat.