The 4-3 ruling by the state Supreme Court lets the city's 2015 ordinance stand in a move that a labor union in the case, Service Employees International Union 32BJ, estimates will deliver sick leave pay to 50,000 primarily lower-income workers in Pittsburgh who lack it.
Mayor William Peduto called the decision a "huge win" for people who live and work in Pittsburgh.
"People should not be forced into making the tough decision between staying home sick and missing a day's pay, or coming in to work and spreading infection," Peduto said in a statement.
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The Pennsylvania Restaurant and Lodging Association, along with several of its members and other groups, had sued and won twice in lower courts.
Philadelphia also requires employers to provide paid sick leave, and advocates knew of no other municipality in Pennsylvania that does so. However, the ruling could free other municipalities to do so.
Pittsburgh's ordinance requires employers with 15 or more employees to give them up to 40 hours of paid sick leave per year. Employers with fewer than 15 employees must provide up to 24 hours of paid sick leave per year. The mayor's office could not say Wednesday when it will take effect.
The court's 46-page decision was written by Justice David Wecht, and joined by three of his fellow Democrats on the court. Dissenting were two Republican justices and one Democrat.
Lower courts had ruled that the home rule charter law prevented Pittsburgh from requiring paid sick leave from employers because it says that municipalities "shall not determine duties, responsibilities or requirements placed upon businesses, occupations and employers."
But the high court's majority ruled that the paid sick leave ordinance falls within the city's legal authority to advance the cause of disease control and prevention.
The state has not explicitly outlawed home rule municipalities like Pittsburgh from enacting a paid sick leave law, and it is within both the city's traditional police powers and a state law that allows municipalities to pursue disease control and prevention, Wecht wrote.
The National Federation of Independent Business said the court "with great mental gymnastics" found a loophole to allow municipalities to effectively regulate business practices and upend state law that had been clear in forbidding it.
"This decision will fall especially hard on small businesses, and, unfortunately, open the door for other municipalities to follow Pittsburgh's lead," Karen Harned, executive director of the NFIB Small Business Legal Center, said in a statement.
The Republican-controlled state Legislature has moved to block such municipal sick leave laws. But in 2016, a GOP-penned Senate bill stalled in the House of Representatives, hitting a wall of opposition from Democrats and labor-friendly Republicans from southeastern Pennsylvania.
The lowest-income workers tend to lack paid sick leave, advocates said.
SEIU 32BJ, which represents security officers and commercial office cleaners in Pittsburgh, said about 40% of Pittsburgh's private-sector workers do not get paid sick time. Low-income, part-time workers and black employees are less likely to be covered, while approximately 77% of Pittsburgh's service workers lack paid sick leave, the union said.
Paid sick leave reduces the spread of illness and workplace injuries, reduces health care costs and helps parents care for sick children or family members, it said.
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