NYC must keep promise to reduce small-business fines

Original Source: Crain's New York Business

City Council Speaker Melissa Mark-Viverito recently announced commonsense measures to help small businesses comply with the myriad of local laws that they might not understand. Tucked in the middle of her State of the City speech were proposals to waive penalties for business owners who attend certain training courses.

This smart approach, which emphasizes education and training instead of fines and punishment, is absolutely the right approach.

Historically, small businesses have felt nickeled and dimed by the city, and often the fines for minor infractions are quite hefty.

Indeed, when he was running for mayor, Bill de Blasio highlighted that the city’s revenue from fines nearly doubled between 2002 and 2012. He even sued the city to obtain details about why it was happening.

Upon taking office de Blasio halved the fines collected from small businesses, probably by letting his commissioners know that they no longer needed to meet budget quotas. The administration also gave more businesses the opportunity to rectify their violations before incurring fines.

This is the direction the city should continue in. But anecdotal reports from small business owners suggest that fines may be on the rise again. Meanwhile, three punitive bills are advancing in the City Council that do little to assuage such fears.

One measure would fine retailers up to $2,500 for selling flushable sanitary wipes. Another would force retailers to keep tobacco products hidden from view until the moment of sale or face fines between $1,000 and $5,000 per violation.

The third bill would require retailers and restaurants to set employees’ work schedules two weeks in advance—or face penalties from $250 to $750 for each late change. It would also invite legal action for what would essentially be complying with the city's law mandating paid sick leave.

This type of legislation opens the door for the city to go after sellers and stores once again.

What’s more, this punitive approach is less effective at achieving the bill sponsors’ goals than improving consumer education is.

In the case of tobacco use, labeling and messaging aimed at smokers has produced results and brought usage down. Further, in 2013, New York became the first city in the nation to have a minimum purchase age of 21 for tobacco products. It would seem that if minors are gaining access to cigarettes, it is not from law-abiding retailers who would be the target of these punitive fines, but through the black market.

In the case of flushable wipes, the major source of clogs are paper towels that are not intended to be flushed, so reducing flushable wipes would do nothing to solve the problem in the wastewater system. Furthermore, the industry has voluntarily agreed to make warning labels more prominent on products to help consumers make better decisions about what to flush.

In the case of workweek scheduling, many employees like having flexible schedules so they can accept last-minute auditions for acting jobs, care for loved ones or attend to other unforeseen events. Imposing steep fines for allowing small business owners to fill open shifts is counterproductive and unnecessarily punitive.

The City Council should reject these measures, which threaten to take us back to the bad old days. Small businesses have enough challenges as they try to compete in this costly and complex city.

Jessica Walker is the president and CEO of the Manhattan Chamber of Commerce.