NYC Reducing Fines on Small Businesses

NEW YORK -

The New York City agency that enforces consumer-protection laws is making changes aimed at reducing fines on small businesses, saying that the agency wants to encourage business owners to comply without burdening them with large fines.

“We do not want fines to be put on the backs of small businesses,” Julie Menin, commissioner of the Department of Consumer Affairs, told The Wall Street Journal, referring to about two dozen changes that were announced Wednesday. “We are going to have a sea change in terms of how the DCA inspectors are going to be interacting with small businesses.”

The changes were a significant part of Mayor Bill de Blasio’s campaign pledge to ease fines on small businesses. As the city’s public advocate, de Blasio released a report finding arbitrary fines, some of which had nothing to do with food safety.

“For years,” de Blasio said last year, “small businesses have been facing the equivalent of a tax increase because of rising fines. It’s a hidden tax, but it’s just as damaging, it’s just as difficult for small businesses.”

Menin said that, under the new rules, those who get caught up in bureaucratic red tape will be shown how to comply instead of being fined.

“Where there are repeat violators, yes, they will be fined. Where there is flagrant violation, there will be fines,” she said. “But where someone has made an innocent mistake that is not harming the consumer, they should be given a chance to cure that violation.”

Businesses, for example, will now have 30 days to correct many violations related to incorrect or missing signage without paying a fine, as long as this is the first violation. That category accounts for about a fifth of all fines the city collects.

The agency is also dramatically lowering fine amounts, from a range of $1,000 to $10,000 to $250 to $1,200. The new rules are expected to reduce the total fine revenue by a third, or about $5million.

Other changes include the issuance of a single violation for information missing from a required sign, as opposed to separate violations currently counted for each missing piece; the agency will publish online the checklist that inspectors use; the appointment of a legal ombudsman to help business owners understand the law; the use of mapping technology to follow which businesses are fined to ensure fairness; and the ability of business owners to request that inspections be conducted in the language of their choice.

Menin said that the new regime represents a sharp cut from the administration of former Mayor Michael Bloomberg.

“Inspectors have told me that under the last administration there was a perception that they were expected to assess a certain number of fines,” Menin said. “That is not what is going to happen moving forward.”