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Midtown's Small Businesses Brace for Paid-Sick Leave Fallout

By Alan Neuhauser | April 8, 2013 10:41am

MIDTOWN — Rosina Rubin is preparing to slice overtime hours and stretch her limo fleet's lifespan. Robert Wyatt is girding to lose some of his bike messengers and deliverymen to attrition. Still other small business owners are worrying how they'll meet payroll and have started scanning their ledgers for costs to trim.

Across Midtown, the smallest of of the Big Apple's businesses say they're getting ready for the City Council's proposed paid-sick-leave bill, which, according to a compromise announced by Council Speaker Christine Quinn last Thursday, would require companies of 15 or more employees to provide five paid sick days for each full-time worker by October 2015.

"It seems like everywhere you turn on the federal, state or local level, there are new regulations springing up, which sometimes cost us money outright, and sometimes it's just a matter of getting buried in the paperwork required to comply," said Rubin, 57, who owns Attitude New York limousines service on West 53rd Street with her husband, Jeff Rose.

Paid sick leave, she said, is simply the latest in a long line of financial burdens introduced in the past four years that weigh especially heavily on Midtown small business: from the implementation of muni meters in 2009, which virtually eliminated free loading-zone parking for commercial vehicles; to vastly stepped-up enforcement by NYPD traffic agents; to an increase in the state's minimum wage approved last week — all of which have come as businesses suffer diminished demand due to the ongoing recession.

And in Midtown Manhattan, the center of a city that calls a company with as many as 125 employees a small business, those with 15 to 75 workers say the revenue they expect to lose by providing paid sick days will be particularly painful.

"My revenues in 2012 were about 80 to 85 percent of what they were in 2007, before the economy started declining," Rubin said. "All of my costs have gone up significantly, but I can't raise my prices enough to my clients to offset that, because it's a very competitive marketplace."

Council members and labor groups, however, have hailed the agreement, calling paid sick-leave a necessary protection for city wage-laborers. Even a coalition of roughly 100 small businesses from Queens, Brooklyn and the Bronx applauded the proposed bill.

"People who are sick or who are taking care of a sick or ailing loved one should be able to take a day off without being afraid of losing their job and therefore being afraid that they won’t be able to pay their bills. It is simply the right thing to do," Quinn, who is also running for mayor, said at a March 28 press conference announcing the compromise. “It protects people. It protects small businesses. And I’m incredibly proud of this final legislation."

Mayor Michael Bloomberg, by contrast, has vowed to veto the measure.

Some business owners, meanwhile, say they face no other choice but to increase their rates, if only to partially shield themselves from the revenue they expect to lose to paid sick days.

"The question is, 'What are people willing to pay for?' I'm not paying to give 50 or 60 people those paid days off. I can't afford that. How much is the customer going to pay for that?" said Wyatt, owner of Lightspeed Express messenger service on West 36th Street, adding that he expects paid sick leave to cost him anywhere from $32,000 to $48,000.

"Do I think it's fair that they don't get sick days? No, I don't think it's fair that they don't get them," Wyatt acknowledged.

Nevertheless, the paid-sick leave requirement assumes that hourly workers don't already receive other benefits from their employers — perks workers might prefer over paid sick days, but which employers will likely be forced to eliminate to reduce their companies' overhead costs.

"We try to treat people right here. I pay these people more than other companies. Other people will charge them for their MetroCards, or charge them half for their MetroCards, we give them a MetroCard," Wyatt added. "So I'm already on the higher end of the pricing range — I don't know that I can charge more."

The Manhattan Chamber of Commerce has loudly opposed the paid sick leave measure, arguing that while "it's a good benefit and a good recruiting tool for any of the companies that can afford it," small businesses "have been getting battered and battered, year after year after year. More enforcement, more mandates, more fines."

Midtown's 10 business improvement districts, by contrast, have avoided taken an official stance on the issue.

"It's one of those things where the opinions are so varied. It's been difficult for us to get out in front of the issue," East Midtown Partnership president Rob Byrnes said. "There's just no real consensus among our constituents about what position we should take."

Still, Byrnes did express concern for small businesses in Midtown.

"Aside from fast food or the WalMarts or things like that, most businesses that can afford paid sick leave do provide it," he argued. "For most of the smaller restaurants and retailers, it's not a case of exploiting workers. It's whether it's something that a small mom-and-pop shop can afford. It is a problem for them, because these are literally the most marginal businesses."

For this reason, Wyatt, Rubin and hundreds of others across Midtown are preparing for a blow they say will land most heavily on them.

"There seems to be this misconception that anybody who runs a small business is getting rich," Rubin said. "We're not getting rich. My husband and I over the last few years have gone weeks or months at a time without taking a paycheck, and I don't think that we are particularly extraordinary in choosing that as a method to make sure there's enough money to make the ends meet. I'd say If I had the money to dish out for sick leave, I'd be overjoyed to do it."

Instead, she continued, "Things will be given up."