After months of negotiations, yesterday the Massachusetts House and Senate passed the "grand bargain," a legislative compromise addressing the paid family leave, sales tax, and minimum wage ballot questions. In addition, earlier this week the Massachusetts Supreme Judicial Court struck down the millionaire's tax so that question will not appear on the ballot this fall.
MNN thanks everyone who reached out to us with their input on these issues. It was clear from our regional meetings that they affect nonprofits in a number of ways.
The legislative compromise is now before the Governor for his signature. The proponents of the sales tax ballot question are pleased with the compromise. and have indicated they will not go forward with their question. Should the proponents of the minimum wage and paid family leave questions decide to pull their questions from the ballot (they have endorsed the legislative compromise on the paid family leave but have
not
yet made a statement on the minimum wage compromise) then none of the four ballot questions MNN has been following closely and engaging on will be on the ballot in November. They must decide soon; July 3 is the deadline for the final round of signatures to put a question on the ballot.
Here are the most important elements of the legislative compromise:
Sales Tax:
- No reduction in the Massachusetts sales tax rate
- Creates a permanent 2-day sales tax holiday
- Phases out Sunday and holiday time and a half pay for retail sector workers
Minimum Wage:
- Phases the minimum wage increase to $15/hour over 5 years (instead of 4 years)
- Does not index the minimum wage (no automatic increase to minimum wage)
- Increases the tipped minimum wage to $6.75 (instead of $9)
Paid Family Leave
- Creates paid family leave but reduces the number of weeks from 16 (in the ballot question) to 12
- Creates paid medical leave but reduces the number of weeks from 26 to 20
- Creates a two tiered wage replacement for workers taking leave: those employees who fall a or below 50% of the state average weekly wage would receive 80% of their wages while those falling at or above would receive 50% of their wages (instead of 90% of state average weekly wage for everyone regardless of earnings)
- Caps the maximum amount an employee can be paid while on leave at $850 (instead of $1,000)
- Eliminates the employer mandated contribution for paid leave
- Includes exemptions for employers with less than 25 employees
- Includes an opt-out for employers with paid family and medical leave programs that provide equal or greater benefits
- Extends the phase-in timeline for paid family and medical leave
Overall, we are pleased with the legislative compromise reached on the paid family leave, sales tax, and minimum wage ballot questions. While the costs associated with paid family leave and minimum wage will be an adjustment for many nonprofits, the compromise will allow the costs to be further spread out and will make them easier to plan for. Keeping the sales tax at its current rate is critical for the state budget and will help ensure that vital programs in communities throughout the Commonwealth are sustained. The spirit of collaboration, on exhibit during these negotiations, is at the core of our sector. The session is not yet over so we will continue to work and engage on any public policy issues that impact our sector.
