A compromise bill emerged on Wednesday that would require paid family leave in Massachusetts, gradually raise the state's minimum wage to $15 an hour and establish a permanent summer sales tax holiday while keeping the tax at its current 6.25 percent.
The measure, which was being voted on by a key House panel, could, if approved by the full Legislature and signed by Republican Gov. Charlie Baker by July 3, keep three hotly contested questions from going before voters on the November ballot.
The Retailers Association of Massachusetts was sponsoring a ballot question that would have reduced the sales tax to 5 percent, but Jon Hurst, president of the association, indicated the group was prepared to support the compromise bill and drop its bid for a tax cut.
The measure also calls for phasing out over five years the requirement that employees be paid time-and-a-half for working on Sundays, a vestige of the state's mostly defunct Sunday blue laws.
The compromise was unveiled just two days after the Supreme Judicial Court threw out another proposed ballot question, the so-called ``millionaire tax'' that would have imposed a 4 percent surtax on any portion of an individual's income above $1 million.
The court's ruling appeared to accelerate negotiations over what Baker had called a "grand bargain" that would remove the impetus for the other ballot initiatives.
Raise Up Massachusetts, a coalition of labor unions, community and religious organizations, is behind the proposals to mandate paid family leave and raise the state's minimum wage from the current $11 to $15 an hour.
The group, in a statement, called the bill announced Wednesday a "victory" for low-wage earners and for all workers who would be entitled to take up to 16 hours paid time off to care for themselves or family member, or for the birth of a child.
"However, we are troubled by the size of the increase in the sub-minimum wage for tipped workers, which doesn't go as far as our proposed ballot question," the group said. "Our coalition is also strongly opposed to the Legislature's decision to eliminate Sunday time-and-a-half pay and cut wages for thousands of workers who are working on Sundays to pay their bills."
The coalition added it would be polling its more than 100 member organizations before committing to the legislation and agreeing to drop the ballot questions.
Sponsors of initiative petitions must submit a final round of signatures to the secretary of state's office by July 3. After that, there is no legal way to have a certified question taken off the ballot.
In an email, Hurst said he expects some pushback from member retailers over the decision to drop the proposal to lower the sales tax to 5 percent, a move that could have cost the state an estimated $1.2 billion in annual tax revenue. But Hurst praised the overall compromise.
"It mitigates the timing, cost and damage of the $15 minimum wage and the new paid leave program as laid out in the ballot measures," he said.
Among the concessions won by business groups was a longer phase-in of the $15 minimum wage — over five years rather than four years under the proposed ballot question.
Retailers had also fought to make permanent the summer sales tax holiday, which is popular with consumers but had not been scheduled by the Legislature for the past two years.
If approved, Massachusetts would become the fifth state after California, New Jersey, New York and Rhode Island to mandate paid family leave, according to the National Conference of State Legislatures.
The $15 minimum wage would be matched only by California, which plans to institute that wage by 2022.