Deep layoffs hobbled NYRA during pandemic even with $10M loan

ALBANY — For 45 years, Harry Rice worked at the Saratoga Race Course, Aqueduct Racetrack and…

ALBANY — For 45 years, Harry Rice worked at the Saratoga Race Course, Aqueduct Racetrack and Belmont Park saddling horses and preparing them to race.

Then, suddenly, the job he loved for so many years vanished.

Soon after the pandemic first came into force in March 2020, Rice was among 469 employees furloughed and laid off by the tracks’ operator, the New York Racing Association, according to data provided by NYRA. About half of NYRA’s full-time staff was out of work.

“It was a financial hardship and people don’t understand that the racetrack, not only is it your livelihood, it’s also your life. We missed it,” said Rice. “It was a tough struggle for everybody.”

Rice and many other NYRA employees have since been hired back by NYRA, which says its head count has returned to pre-pandemic levels.

But some workers contend that even though they have their jobs back, they aren’t being provided with enough shifts to work to make ends meet because racing is being held far less frequently than it was before the pandemic. Some employees endured long stretches of unemployment during the pandemic and being laid off multiple times.

Officials at one labor union say they’re planning to launch a public campaign soon called “Stop Poverty at NYRA,” that will call on NYRA to give employees a “living wage” by providing them 40 hours a week of work or equivalent pay.

In a statement, NYRA called the layoffs — which have never been reported previously“painful” and said staff in customer-facing roles had been most affected, due to the absence of in-person crowds. NYRA’s operations were hampered by unprecedented lockdowns and the cancellation of in-person racing, in the early days of the pandemic, as well as many months of no in-person attendance at its tracks.

NYRA was able to slowly add employees back thanks in part to a $10 million Paycheck Protection Program (PPP) loan, a forgivable federal loan intended to keep workers employed and small businesses afloat. The federal loans could be forgiven in whole or in part based on whether companies met certain criteria to maintain their payroll. NYRA said its loan was fully forgiven.

“The organizational decisions made necessary by the COVID-19 pandemic allowed NYRA to sustain its business, re-prioritize the importance of live television and its mobile wagering product NYRA Bets, and emerge from the crisis in a strong position for continued success in the future,” said NYRA Senior Communications Director Patrick McKenna.

On March 1, 2020, before coronavirus swept the U.S., NYRA employed 821 full-time employees at its tracks, the company said. 

The PPP program was created on March 27, 2020, when Congress passed its first federal pandemic relief bill.

NYRA was approved for a PPP loan by the Small Business Administration on April 12, 2020, and reported to the SBA that it employed 453 people at that time, according the Pandemic Accountability Oversight Committee, a group of government inspectors general. The program was only open to companies with 500 or fewer employees.

At NYRA, “Temporary furloughs and layoffs took place at the height of the crisis beginning on March 16, 2020 and continuing through April 27,” McKenna said. That means some layoffs and furloughs occurred after NYRA’s loan approval.

McKenna said that’s because without spectators, work for some customer-facing employees did not exist and they were subject to temporary furlough. At various times during the pandemic, some employees were returned to work and others were temporarily let go, he said. NYRA continued to provide all health benefits for employees on furlough.

On May 1, NYRA’s full-time employee head count was 442, numbers shared by NYRA show. Then over time, as NYRA began to hold live racing again and eventually brought fans back to the stands, the company began to bring employees back. 

By December 2020, NYRA had returned 191 more full-time workers to work. As of two weeks ago, a total of 792 full-time employees were on staff, McKenna said. 

In addition, temporary furloughs and layoffs impacted part-time and seasonal employees, McKenna said.

NYRA’s CEO and NYRA’s management team also took salary reductions during the pandemic, McKenna said. Upper management members with the highest salaries took the largest pay cuts for the longest period of time. The highest pay cut was 25 percent, he said. 

McKenna declined to provide the CEO’s salary.

Jason Ide, president of Teamsters Local 814, which represents about 40 NYRA employees, said parking attendants who work for NYRA were furloughed during the Belmont and Aqueduct meets in the spring and fall of 2020, and the bulk of the unit was only recalled for 40 days of racing at Saratoga.

“There are many parking employees who are still laid off,” Ide said this week. “We literally are applying for food stamps.”

Ide said his members have not had a union contract in months due to disputes with NYRA over shift reductions during the pandemic. His members love working in horse racing, he said, but “it’s never been worse.”

McKenna said NYRA is aware of Local 814’s “Stop Poverty at NYRA” campaign and is “proud of its long and productive relationship with the numerous unions that represent NYRA employees and intends to negotiate with Local 814, as it always has, in good faith.”

Several other unions that represent NYRA employees did not respond to inquiries from the Times Union. Teamsters Local 807, which represents security workers at NYRA, said their unit did not experience layoffs during the pandemic.

During the pandemic, NYRA had to cancel 43 days of live horse racing, hold racing without in-person attendance for 10 months and reduce the number of days it hosted races by 60 in 2020.

“Brick and mortar operating revenue declined 100 percent during the period of time without spectators on-track,” McKenna said.

In May 2021, NYRA was permitted to host a limited number of spectators at Belmont Park.

Saratoga Race Course held its summer meet starting in July, open at near full capacity with over 1 million fans. The Saratoga track is by far the most well-attended in New York. Operations at Saratoga were supported by roughly 2,000 full-time, part-time and seasonal workers employed by NYRA, McKenna said.

Aqueduct will host fans in-person to watch racing for the first time starting on Nov. 11, after the facility was used as a mass vaccination site. NYRA plans to bring additional employees back for racing there, McKenna said.

NYRA’s $10 million PPP loan was forgiven by the SBA in August 2021, McKenna said. The company spent all the funds on payroll and employee benefits, McKenna said. NYRA’s PPP loan matched the maximum that employers were generally eligible for under the program.

“This PPP loan allowed NYRA to continue training and stabling operations at Belmont Park, which was critically important to hundreds of small businesses and thousands of hourly workers whose income is dependent on the purses awarded at NYRA tracks,” McKenna said.

Rice said he had no idea his employer, NYRA, received a PPP loan until recently.

“It was very tough financially to be laid off, and I wish they would realize they have some dedicated employees,” said Rice, who spent about two months on unemployment before NYRA hired him back. “It used to be years ago, we all worked together and we all looked out for each other. It doesn’t really seem like that too much anymore, but hopefully it will change.”

PPP’s impact

Economists believe the PPP program helped keep millions of workers in their jobs – at least in the first six months after it launched.

Economists at the U.S. Treasury estimated in December that the program saved 18 million jobs. Using other methodology, a Massachusetts Institute of Technology economist and his partners found the Paycheck Protection Program saved 1.4 million to 3.2 million jobs. Other economists have reached similar conclusions.

But the $800 billion program could not forestall layoffs and furloughs among its loan recipients completely.

Conservatively, more than 190,000 American workers were laid off across 1,900 companies that received PPP loans in 2020, according to an analysis by Good Jobs First, a nonprofit that studies corporate subsidies.

The Small Business Administration issued more than 11 million PPP loans and collectively the small businesses that received loans reported employing roughly 90 million people at the time loans were issued.

A small business survey by the Federal Reserve found 82 percent of employer firms applied for PPP loans and 77 percent received all the funding they sought. Forty-six percent of companies that received all the PPP funds they wanted still reduced the number of employees on their payroll. By comparison, 71 percent of firms that received none of the PPP money they wanted cut their payroll, the Federal Reserve found.

It’s hard to measure how effective PPP loans were at keeping employees on the payroll, either in the six months after most companies received their loans, or subsequently as the pandemic recession has dragged on, said Eric Zwick, professor of finance at the University of Chicago Booth School of Business.

Firms did not have to demonstrate revenue losses to apply for a first-round loan, so it’s likely that most of the employees supported by the program would not have lost their jobs even if their company did not receive a loan, Zwick said. But over the long-term, the program could have more of a positive employment effect by shoring up businesses to help them avoid closures and other setbacks as the pandemic continues.

“A big chunk of the money ended up benefiting firm owners more than workers,” said Zwick.

In order to receive full loan forgiveness, the program required companies to maintain their average employee head count over the eight to 12 week period following their loan disbursement and keep that head count at the same or greater levels than one of two specified periods in 2019 or 2020, SBA spokesman Matt Coleman said. The SBA provided companies some limited exceptions if it proved it could not rehire employees. Businesses also had to maintain at least 75 percent of the salary of each employee, except those making over $100,000 a year.

The SBA rules allow companies a fair amount of flexibility and include some limited safe harbor protections and exemptions. Coleman said lenders and the SBA review employer payroll records when firms apply for forgiveness to ensure companies meet the guidelines.

But Zwick and Good Jobs First said it’s not clear that the small government agency with little experience running a program this size has the capacity to mount a robust enforcement effort.

“The rules are unfortunately pretty loose,” said Katie Furtado, research analyst at Good Jobs First.