Employers must provide sick days separate from paid time off
By Hannah Frances Johansson, NewsWorks Lab Enterprise Reporter
Justin Avi started making ravioli during the pandemic, before opening his business, Saint Ravioli, on Liberty Avenue in the Bloomfield neighborhood of Pittsburgh.
Avi doesn’t have any employees, but if he were to hire one, he said Allegheny County’s amended paid sick leave policy would make it harder.
When the county passed a landmark paid parental leave policy on Oct. 20, it also upped sick leave requirements. Some business owners told NewsWorks Lab they fear the mandate will lead to higher costs, but economists are divided about the overall impacts.
The policy requires all businesses to provide employees with one hour of paid sick time for every 30 hours worked (capped at 72 hours for businesses with 15 or more employees and 48 hours for businesses with fewer than 15 employees).
The new sick leave requirements largely match the City of Pittsburgh’s own requirements, which became effective Jan. 1.
However, the county says that sick leave must be designated as such — and not folded into general paid time off that can be used for any purpose such as vacation or personal days.
Avi said he agrees in principle that all employees should be able to take leave if they are sick, but he doesn’t think small businesses should have to shoulder the cost.
“It should be subsidized by our large corporations,” he said. “We have old money here in Pittsburgh.”
Heather Brown, owner of Body by Design Holistic Wellness Spa, a massage studio in McCandless, said she finds the new requirements “extremely frustrating.”
Before the mandate, she already planned to raise prices at the beginning of 2027. Now she says she’ll have to reevaluate again.
“Certainly, we’re going to have to raise our rates,” she said. “What we do, I don’t view it as a luxury.”
Brown said her clients are often managing chronic pain or stress. If she raises her rates, she’s concerned that could make her services unaffordable for people in need of care.
Although she agrees that her eight employees should be provided paid sick leave, she wishes the government would subsidize the new requirements.
“Individual businesses I spoke to were in problem-solving mode, trying to understand what they could do to implement this regulation,” said county council member Lissa Geiger Shulman, D-Hampton, who voted in favor of the measure. “Meanwhile, the large business and industry trade groups take a much more aggressive posturing when it comes to government regulation.”
County council member Nicholas Futules, D-Verona, a former long-time businessowner, voted against the measure because of his concern for businesses and the local economy.
“That bill was the complete opposite of our mission,” he said. “We’re deterring businesses from coming here and not growing and creating more jobs.”
County Executive Sara Innamorato’s spokeswoman declined to comment about the new requirement.
The Allegheny Institute for Public Policy, a local think tank that advocates for smaller government, argued in a September brief on the county’s paid parental leave policy that higher costs for employers could ultimately hurt people the law seeks to help.
“Imposing more costs on Allegheny County employers of all sizes, but disproportionately small businesses, will only further contribute to the pervasive anti-business malaise already afflicting the region,” it said.
Alex Sodini, researcher at the think tank, says the sick leave changes will be bad for business.
“I think there are just a lot of costs that simply haven’t been fully realized or maybe understood,” he said.
The county’s new paid parental leave policy — not accounting for new sick leave — could cost Allegheny County as much as 1,500 jobs, according to a technical analysis by the Employment Policies Institute, an organization that studies the effects of labor mandates on hiring.
The combination of paid parental leave and more paid sick leave is going to be “a big increase in cost for many employers,” said Rebekah Paxton, research director at EPI. “Businesses will have to adapt.”
Small businesses in the service industry, like restaurants and massage spas, don’t customarily provide sick days, said Kelly Bender, owner of Total Business Solutions, a tax and accounting firm with locations in Warrendale and Butler that specializes in helping small employers.
If Bender’s clients are required to offer paid sick time, the employees or the business owner will make less money – or they will have to raise prices, she said.
“Everybody loves the idea of ‘shop small’ and ‘keep your dollars inside your community,'” Bender said, but burdening small businesses could drive up their prices, sending customers to chain stores.
Fewer outbreaks
More sick leave is unlikely to stifle the job market, said Osea Giuntella, a labor and health economist at the University of Pittsburgh.
“There is solid evidence that paid sick days have minimal effects on employment and hours, with high public-health returns,” Giuntella told NewsWorks Lab in a statement. “When sick workers stay home, coworkers and customers get sick less, which is a saving for employers too.”
In a 2019 paper about what they call “contagious presenteeism,” when employees go to work sick, Swiss and American researchers showed that city-level mandates for sick leave reduce the spread of the flu.
“Sick pay schemes then incentivize those contagious employees to stay at home but also induce noncontagious employees to call in sick more often,” they wrote.
Sick-leave mandates at the statewide level “modestly” increase the cost of newly covered workers, by 31 cents per hour, according to a 2020 working paper published by the National Bureau of Economic Research.
The same paper found that sick-leave mandates increased the provision of other non-mandated benefits, like medical or dental insurance.
Other studies show that when sick employees stay home, the local economy benefits, said Felix Koenig, an economist at Carnegie Mellon University. Koenig researches the economic tradeoffs of paid time off regulations.
Paid sick leave could reduce a host of business expenses, according to a 2017 paper by the Centers for Disease Control and Prevention.
The paper says that job turnover, the incidence of workplace injury, the cost of healthcare, and absenteeism overall, could all be potentially reduced with paid sick leave.
You may reach Hannah Frances Johansson at hjohansson@newsworkslab.com.
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