Legislature finds middle ground between labor coalition, retailers and business groups

In an effort to keep the sales tax, minimum wage and paid family medical leave initiatives off the ballot in November, the Massachusetts legislature passed the “grand bargain” bill last week.

This bill will increase the minimum wage to $15 over five years, mandate paid family and medical leave and enact an annual sales tax holiday. The $15 minimum wage will tie Massachusetts with California and New York for highest statewide minimum wage.

The bill passed in the Senate 30 to 8 and in the House 126 to 25.

Legislators often negotiate with organizers of ballot initiatives to enact modified versions of their petitions, giving the Legislature the opportunity to modify the measures and saving the organizers the expense of running expensive statewide campaigns. Both chambers passed the bill last Wednesday, and it zipped through without major amendments. Legislators were eager to pass this bill before July 3, the deadline for ballot question signatures to be submitted.

The Retailer’s Association of Massachusetts agreed to not pursue their ballot measure to cut the sales tax from the current 6.25 percent to 5 percent if Governor Baker signs this bill. Although the bill will not lower the state sales tax, it does propose an annual sales tax holiday.

Lawmakers were concerned that lowering the state sales tax by the proposed 1.25 percent would cost the state more than a billion dollars in revenue each year and wreak havoc on the state budget.

Wages still in play?

However, Raise Up Massachusetts, the creators of the $15 Minimum Wage and Paid Family Medical Leave campaigns, may still go to the ballot. They are concerned about the concessions made in the bill. Namely, the staggered increase to a $15 minimum wage, a smaller increase to the minimum wage for tipped workers and the eradication of Sunday time-and-a-half pay. Their original proposal would increase the minimum wage more quickly, raise the base pay for tipped workers by more and keep overtime pay for Sundays.

The bill that just passed the House will increase the minimum wage to $15 over the next five years and increase the minimum wage for tipped workers by only $3 — from $3.75 to $6.75 — by 2023. Raise Up Massachusetts has said they won’t take paid leave to the ballot, but have not said whether they will pursue a ballot question campaign for minimum wage.

Regarding paid leave, the recently-passed bill will extend family leave to up to 12 weeks and medical leave to up to 20 weeks for nearly all employees, giving Massachusetts the most generous paid leave policy in the nation.

A new Family and Employment Security Trust Fund will be created to pay for these new benefits, and businesses larger than 25 employees will have to contribute to this fund.

The bill now sits on Governor Baker’s desk, awaiting his review and signature. He indicated Monday that he is likely to sign it into law.