On Oct. 20, Allegheny County Council passed amendments to Article XXIV of the Allegheny County Health Department Rules and Regulation establishing 12 weeks of paid parental leave and expanding paid sick leave. Following the county executive’s signing of the bill, affected employers will have roughly a year for implementation and compliance.
Allegheny County will be the only county in the nation with a mandatory paid parental leave in a state which does not already have a statewide system and the only mandatory paid parental leave policy which requires individual employers to fund the entirety of the leave themselves. Policy Brief Vol. 26, No. 32, documented the voluminous number of unintended consequences that such a policy would impose on businesses beyond the “direct” cost of the salary and benefits of the employee on leave.
The Pennsylvania Chamber of Business and Industry recently conducted a survey of 392 businesses in Allegheny County across various industries. The survey found that 83 percent of businesses believed the impact of the policy would be either somewhat or very negative.
Roughly 20 to 30 percent of businesses indicated the proposal would likely have each of the following adverse impacts: (1) relocating employees outside of Allegheny County; (2) eliminating positions; (3) difficulty recruiting and retaining employees and (4) investing in automation. About 40 percent said they would reduce hiring full-time employees and 23 percent would reduce hiring new part-time employees
Business surveyed also indicated that the policy would require substantial changes to their operations, including (1) 55 percent saying they will need to increase prices; (2) roughly 33 percent looking to move current or future operations outside of Allegheny County and (3) 18 percent looking to close one or more locations in the county.
While it has received comparatively less attention, the expansion of paid sick time will also impose even further costs to businesses. In addition to paid parental leave, employers with 15 or more employees will also need to provide said employees at least 1 hour of designated paid sick time for every 30 hours worked up to a maximum of 72 hours in a calendar year, regardless of existing paid time off policies. Combined, these mandates will essentially force some workers to subsidize specific benefits for others.
Policy Brief Vol. 26, No. 37, highlighted that from 2001 to 2025, Allegheny County’s population fell by more than 47,000, a 3.7 percent decline, while private employment fell by more than 31,000, a 4.9 percent decline. Note that during the same time frame, Pennsylvania’s population and private employment grew by 6.2 percent and 10.9 percent, respectively. Nationally, those figures were gains of 19.9 percent and 21.8 percent over the same time period, respectively.
More heavy-handed government intervention will only make it more difficult for businesses to expand and invest in Allegheny County. As such, while some will undoubtedly benefit from these policies, the costs of further economic stagnation and decline – and the adverse impacts to businesses, residents and workers as a result – must not be forgotten.
