Allegheny County's mandate on paid parental leave draws strong reactions from small businesses

Some Allegheny County small businesses are looking at laying people off or moving out of the county due to the just-passed mandatory paid parental leave policy, according to a tax professional whose company specializes in working with small businesses. 

Total Business Solutions in Warrendale represents 250 small businesses across the area. The businesses' president, Kelly Bender, has already spoken with a number of them about the tough decisions they are facing since the policy passed county council on Tuesday night. 

"The immediate conversations that I had were how will we afford to pay 100% leave if an employee has to take off that much time," she said. "And right now we're really trying to figure out how that is without having to lay people off. Or I have actually a couple business owners who have said, 'I think I'm going to move and relocate my business outside of the county.'"

The businesses the policy will hit, she explained, are the ones that are already on tight margins. She mentioned hearing concerns from labor- and service-based businesses like restaurants, hairdressers and landscapers. 

One of her clients is Body by Design Holistic Wellness Spa in the North Hills. Just Wednesday, the spa hired its ninth employee. As it stands, it will be one of its last.

"It's frustrating," spa owner Heather Brown said. "It's hard to be a business owner already. We already have a lot of financial obligations."

She explained that after moving into a new space, she's been planning to grow the business in the next three to four years. Now, she said she is changing the way she thinks about the future of the spa. 

As a direct result of the parental leave policy, she said she will have to cap the number of employees at 14, one shy of 15 — which is when the paid leave policy kicks in. Just a single employee on full paid parental leave would make her business unsustainable, she explained.

"The profit margins are already very tight, and to mandate paid leave for six or eight weeks at a time would be catastrophic if funded by small businesses," she said. "As a mother, I hate to even think about how that might be a hardship for someone in the future, but it's just such an impractical piece of legislation when small businesses are expected to take that financial burden."

Bender explained what she said makes the policy different from parental leave policies in other parts of the country. 

"What most other states who have done these types of policies have done is set up some type of taxation system in which employers are paying on a per-employee basis into some type of shared insurance pool. Or they have access to a shared insurance pool," Bender said. "I think that the idea of the paid parental leave policy is a good one and noble, but to put the burden of the financial impact entirely on the backs of the employers is misguided." 

Business owners considering layoffs told Bender they either can't afford to pay the workers due to the impact of the paid parental leave policy or laying off workers would allow them to get under the 15-person threshold. 

"In my experience, if a business is already struggling, they will try to hold on until it ends in closure, eliminating all the jobs at once," Bender said. "The 15 mark is not some magic number that leads to great profitability. That's still a pretty small business.   

Supporters of paid parental leave said it will protect workers and their families.