The Department of Consumer and Worker Protection (DCWP) adopted, an emergency rule prohibiting price gouging of certain personal and household goods and services after receiving hundreds of complaints over the past two weeks. The new Rule is in effect since March 16, 2020 and, under the city’s emergency rulemaking process, will be valid for 60 days. The Rule can be extended once for an additional 60 days.
DCWP is actively inspecting stores based on consumer complaints. Businesses found to be overcharging consumers 10 percent or more than before COVID-19 will be issued a violation. The Rule covers any personal or household good or service—such as disinfectants, soap, and cleaning products, diagnostic products and services, medicines, and tissues—that is needed to prevent or limit the spread of or treat COVID-19. The fine for price gouging is up to $500 per item or service. If businesses are paying more to supply these items, they must provide proof to DCWP.
Price gouging occurs when a merchant takes advantage of an abnormal disruption in the marketplace and charges excessive prices, taking advantage of the consumer’s inability to bargain or seek a better price, resulting in a “gross disparity between the value received by a consumer and the price paid.” The spread of the COVID-19 virus and the disruptions associated with it have created disruptions in the marketplace for personal and household goods and services. This rule assists DCWP in its work of protecting consumers, especially when they are at their most vulnerable.
This emergency rule declares such conduct unconscionable and aligns New York City with many jurisdictions across the country that prohibit price gouging in emergency circumstances, including New York State. The rule establishes a threshold for prohibited pricing of ten percent above the price at which consumers in New York City could obtain such goods or services 30 to 60 days prior to the issuance of this rule. This is the standard used by several other jurisdictions, including the states of New Jersey and California, in laws that prohibit price gouging.
DCWP has received more than 1,000 complaints about price gouging since the first declaration on March 5. DCWP has also issued more than 550 violations for price gouging for the three items that had been declared temporarily in short supply. DCWP encourages consumers who are overcharged to file a complaint at nyc.gov/dcwp or by contacting 311 and saying “overcharge.” Consumers who believe they were victimized by price gouging should keep their receipts and any information about the store where the transaction occurred, and file a complaint with DCWP. If the price gouging occurred while the declaration was in effect, or after the new rule was enacted, DCWP can still prosecute the illegal activity.
DCWP also reminds New Yorkers that they have the right to sick leave and should use it if they are feeling ill. Under the NYC Paid Safe and Sick Leave Law, employers with five or more employees who work more than 80 hours per calendar year in New York City must provide paid safe and sick leave to employees. Employers with fewer than five employees must provide unpaid safe and sick leave. Covered employees have the right to use safe and sick leave for the care and treatment of themselves or a family member. Employers may not engage in or threaten retaliation against employees, which includes firing and any act that punishes an employee for or is likely to deter an employee from exercising their rights under the Law. Employers and employees can visit nyc.gov/workers or call 311 (212-NEW-YORK outside NYC) for more information. We also encourage employers to let employees use additional sick leave if necessary so they can take care of themselves and do not get coworkers or consumers sick.