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Chamber report exposes systemic flaws in city’s business inspection process

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NEW YORK, NY – December 29, 2025 – The Manhattan Chamber of Commerce today released Enforcement Uncovered, a comprehensive new report analyzing more than two years of inspection data from the New York City Department of Consumer and Worker Protection (DCWP). The findings reveal a regulatory environment where administrative hurdles, data opacity, and high rates of default judgments are placing undue pressure on the city’s small business community.

The report, which examines approximately 211,000 inspection activities from July 2023 to October 2025, highlights a "bifurcated" enforcement landscape. While nearly half of all enforcement activity is driven by necessary strategic sweeps on illicit tobacco and cannabis, the remaining routine inspections on general retail often result in violations for minor signage and "paperwork" errors, rather than malicious fraud.

"Our small businesses are the heartbeat of New York’s economy, yet our analysis shows they are frequently caught in a cycle of confusing regulations and missed notifications," said Jessica Walker, President and CEO of the Manhattan Chamber of Commerce. "When nearly two-thirds of resolved cases end in a default judgment because a business owner didn't respond, the system is failing to engage the very people it regulates. We need a shift from punitive enforcement to proactive support."

Key Findings from the Report:

  • Default Judgments Dominate: A staggering 62.3% of all resolved charges ended in a default judgment, meaning the business was found guilty simply because they failed to respond to the summons. This suggests systemic barriers preventing business owners from effectively navigating the adjudication process.
  • Manhattan Faces High Volatility: Manhattan recorded the highest rate of businesses marked "Out of Business" at the time of inspection (18.5%), significantly higher than the outer boroughs. This serves as a concerning proxy for the borough's commercial turnover challenges.
  • Sustainability Rules Are a Stumbling Block: Excluding tobacco and cannabis, violations related to new environmental mandates are surging. Providing plastic straws and stirrers unlawfully or lacking the proper signage about their use accounts for over 4,000 violations combined, indicating that owners are struggling to keep up with rapidly changing mandates.
  • The "Right-to-Cure" is a Black Box: The report identifies a critical gap in data transparency. 55% of charges eligible for a "cure" (fixing a first-time violation without penalty) have no recorded outcome in public datasets, making it impossible to know if the program is working as intended.

A Call for Reform

The Manhattan Chamber of Commerce is calling on the City to implement immediate reforms to support compliance over punishment. The report outlines a strategy focused on transparency and support, including:

  1. "Starter Kits" for New Businesses: The City should provide physical kits containing mandatory signage (such as Refund Policy and Plastic Straw Notices) to new licensees to prevent common "gotcha" violations.
  2. SMS Hearing Reminders: To combat the high default rate, the City should implement text message and email reminders at 7, 3, and 1-day intervals before hearing deadlines.
  3. Compliance Navigators: The Chamber proposes expanding the Small Business Resource Network to include dedicated advisors who provide in-person guidance on compliance, moving beyond the initial licensing phase.
  4. Data Dashboard: The creation of a centralized, user-friendly dashboard to track the lifecycle of violations and eliminate the data gaps regarding "cured" charges.

"Small businesses are failing on signage rules, not fundamental consumer protection," the report concludes. "By radically improving data accessibility and expanding wrap-around support, we can ensure New York City remains the world's most opportunity-rich place to do business."

 

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