Small businesses denounce petty fines

Despite being more than two weeks away from Halloween, this past October 13 was a nightmare for many small business owners in Bushwick, Brooklyn. They claim they were fined “excessively” by inspectors from the New York City Department of Consumer Affairs (DCA) for small violations that they immediately corrected. This is the latest aggravation against small business trying to succeed in a competitive marketplace. Luckily, things like Search engine optimization are helping businesses succeed through generating more online traffic, thus causing more customer visits.

Francisco Acosta, owner of Rosangie Grocery, at 308 Bleeker Street on the corner of the commercial strip of Irving Avenue, said that in the 20 years he has operated his business, “I have never received such excessive fines and under such arbitrary conditions.”

“I won’t lie, I had a few products on the shelves that didn’t have price labels on them, like toothbrushes, batteries and Scotch tape. They fined me $200 for that,” said Acosta. “What did not seem fair to me was them giving me a $750 fine because some prices did not match up with the products that I have in the refrigerator, although I explained to the inspector that this had happened because I was cleaning it.”

What upset Acosta the most was that in the letter he received from the DCA, “they practically intimidate me into not protesting the fine.”

In the letter, the DCA told Acosta that if he did not plead guilty to having committed the violations that upon losing the case, he would have to pay $1,500 instead of $750, and $3,200 instead of $200.

“You have to go there,” he said, referring to the DCA Office, located at 42 Broadway in Manhattan, “and lose a day of work, what with the terrible state of the economy. It would be better if the city asked us to shut down. They are destroying our businesses with fines like that,” Mr. Acosta complained.

The 190,000 small businesses in the city have a major impact on job creation, adding jobs at twice the rate that large companies do [pdf]. However, despite the scarcity of available work and the current economic crisis, the city continues to deprive these small businesses of huge benefits by fining them.

Bill de Blasio, the NYC Public Advocate, published a report entitled, “Reducing Red Tape So Our Small Businesses Can Grow and Create Jobs.” The report stated that the Bloomberg administration “continues to reap record revenue by fining small businesses for easily corrected, first-time violations.”

In the current fiscal year, the DCA expects to collect an amount of $10.2 million in fines [pdf], which is clearly out of the ordinary when compared to the amount it collected in 2009, which only amounted to $6.8 million.

“If we want small businesses to generate job opportunities and put New Yorkers to work, the city can’t continue to fine business owners for every violation under the sun, and make them spend hours and hours challenging their cases in person,” said de Blasio.

Cynthee Cortés, who works for Small Businesses United, a program of Make the Road New York, said that on Oct. 13, the DCA fined 10 small businesses on a mere three-block stretch of Irving Avenue’s commercial strip.

“These are fines that run from $200 to thousands of dollars. Given the economic downturn and the decrease in sales, the business owners are in no condition to pay, nor go to Manhattan and lose a workday to challenge their cases,” said Cortés.

“The DCA doesn’t give them the option of fighting the case by phone, e-mail or Internet. Instead, when business owners go to the DCA office, they are told that if they don’t plead guilty and if they lose the case, they will have to pay much more than what they were originally fined.”

Marisol Chino, another of the business owners who has been fined, runs the Tepeyac Deli Grocery. Ms. Chino will have to pay $200 because the inspector did not see the sign outlining her store’s refund policy, which she had placed outside; she will also have to pay $750 because she had bananas in a metal container instead of a wooden one, and four products did not have a price listed on them, a mistake she fixed immediately.

“If I decide to challenge the case and I lose, I’ll have to pay $1,500,” Ms. Chino complained. “I’ve been running my business for seven years and I’ve never had a problem like this.”

Chino said that the DCA could act fairly by educating business owners about regulations and instead of fining them for a first-time violation, the agency should give them a warning so they will take care of the problem.

Other business owners affected by excessive fines include Florentina Ramirez, who owns La Flor Fashion. She was fined $375 for not having prices listed on a few pieces of Mexican luggage, a few dolls and a few walking sticks. Wilson Cajamarca, of Jilguero Multiservice, was fined $250 because his cash register did not print the name, address and telephone number of the business on the receipt.

“I explained to the inspector that I had been robbed some days before. I lost the cash register and some other items, and because of that, the new cash register wasn’t yet programmed, but he still fined me,” said Cajamarca.

The Office of the Public Advocate recommends, among other suggestions, that all city agencies update the process so that business owners can challenge violations via the Internet, phone or e-mail, and that instead of being punished with a fine, that they be given the opportunity to amend their first violation if it is considered to be low-risk.

The DCA provides easy-to-understand instruction guides on their regulations, where they explain what business owners must do according to the type of business they run. The DCA also offers Business Education Days where they invite business owners to learn about existing laws and how to avoid penalties.

However, according to de Blasio’s investigation and Make the Road New York, efforts to educate business owners should be expanded so that they reach the business owners’ actual place of work, since many of them are unaware of regulations and the educational services offered by the DCA.

The DCA promised to respond and act accordingly.

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