BROOKLYN — Needless bureaucracy and heavy fines for first-time violations are hurting the city’s small businesses, including those in Brooklyn, according to a Red Tape Report by Public Advocate Bill de Blasio. With local unemployment rising to 8.8 percent, de Blasio is calling for reforms that will help ease the burden on small businesses — reforms that create jobs at twice the rate of bigger companies.
The report recommends that the Bloomberg administration modernize the hearing process so that business owners would no longer need to contest fines at in-person hearings. It also recommends giving businesses an opportunity to fix certain first-time, low-risk violations before incurring an immediate fine. Similar reforms were promised by the administration in 2010 but were not enacted across all agencies that oversee small businesses.
“Small businesses cannot create jobs and put New Yorkers back to work if the city keeps issuing fines for every violation under the sun — and then forces owners to spend hours contesting those fines in person,” he said. “City agencies have taken positive steps to help businesses comply with the law, but we are still falling short of turning all the city’s promises into reality. Right now, small businesses desperately need more common sense enforcement and a less burdensome way of contesting fines.”
The report recommends the following:
• Upgrade the hearing process at all city agencies overseeing small businesses — including Consumer Affairs and Sanitation — and allow owners to contest violations online, by phone or by mail.
• Develop a tiered classification system for small business violations at agencies that do not yet distinguish between severe and low-risk violations in their enforcement and fine schedules.
• Offer business owners an opportunity to correct first-time, low-risk violations before incurring a penalty. To protect consumers, de Blasio recommends implementing the policy on an industry-by-industry basis, and only in cases where the inspection did not arise from a specific consumer complaint.
De Blasio has also launched a Small Business Hotline to field complaints regarding fines and red tape at (212) 669-4691.
“A leveled playing field and fair business environment needs to be maintained for small businesses to open, grow, prosper and create jobs in NYC,” said Zulema Wiscovitch, executive director of the National Supermarket Association.
Among the complaints the Public Advocate’s office has received from small businesses are: incorrectly displaying a license number, failing to post a return policy next to each register and printing incomplete store information on receipts.
In each case, it was the first time the business was cited for the specific violation, with fines ranging from $200 to over $1,000.
Business owners had the choice of paying the fine, or leaving their stores to contest the violation in person at a hearing in Manhattan. The Department of Consumer Affairs expects to collect an unprecedented $10.6 million from fines during the current fiscal year — a 45 percent increase since 2009, according to de Blasio.
Wilson Oswaldo Cajamarca, a member of Small Business United [a project of Make the Road NY], told de Blasio, “The city’s current tactics end up hurting immigrant entrepreneurs and the smallest of small businesses. I opened my small business, Jilguero Multi-Services, six months ago, and instead of receiving support from the city I received a fine from the Department of Consumer Affairs. I lose customers if I have to close to go contest a violation in person — not to mention probably having to pay a fine. There should be a chance to fix these small violations, or a way to contest fines without making a physical appearance.”
It makes me feel like the City doesn’t want me to succeed, that they only want my money.”
“Street vendors are small business owners, too. They should have a chance to correct their violations – like moving their table or cart a few inches – before getting hit with $1,000 fines. We support the Public Advocate’s proposal 100%,” said Sean Basinski, director of the Street Vendor Project at the Urban Justice Center.
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