By Matt Murphy
STATE HOUSE NEWS SERVICE
BOSTON -- House Democrats will present a plan on Thursday that would raise the minimum wage to $10.50 by July 2016, freeze unemployment insurance rates for the next four years, and reward businesses with low employee turnover through reforms to the UI system that do not include any major changes to the standard duration or eligibility requirements for collecting benefits.
A week after House Speaker Robert DeLeo outlined his ideas for a minimum wage hike and unemployment insurance reforms, the Labor and Workforce Development Committee is expected to debate the proposed legislation Thursday afternoon, but would be precluded from voting on a proposal unless the Senate accepts a request from the committee for an extension to act on bills later than the March 19 reporting deadline.
The House approved the extension on Thursday morning, and the committee is planning to meet at 3 p.m. The Senate has already acted on separate minimum wage and unemployment insurance bills, and stakeholders have questioned how senators on the committee will vote on the House proposal.
The bill, a draft of which was obtained by the News Service, would raise the per-employee taxable wage base from $14,000 to $16,000 - the Senate raised the taxable wage base to $21,000.
To counteract the wage base increase, House leaders are recommending a new rate table with levels added at each end of the spectrum that they say with decrease the financial burden on high-rated employers with low workforce turnover while penalizing negatively rated employers.
The House bill would also attempt to help the long-term unemployed by creating a new employment fund to be capitalized by an increase in a per-employee fee on businesses and dedicated through grants to community-based job training organizations. The fees would be adjusted to generate $80 million for the fund, up from the existing $18 million cost to business.
As expected, the bill will propose a gradual three-year increase in the minimum wage to $10.50 by July 2016, and would expand the earned income tax credit in Massachusetts from 15 percent of the federal credit to 20 percent, saving taxpayers an estimated $41.2 million to $45.5 million, according to documents prepared by the committee.
With President Barack Obama calling for an increase in the federal minimum wage to $10.10 an hour, House leaders are recommending a provision guaranteeing that no matter what happens to the federal minimum wage - currently set at $7.25 - the minimum in Massachusetts would remain 40 cents higher. Current law keeps the state's wage floor at least 10 cents higher than the federal minimum, while the Senate proposal pushed it to at least 50 cents higher.
The Senate also proposed to raise the minimum wage to $11 an hour and index future increases to inflation, but the House bill that Labor Committee Co-chair Tom Conroy expects to reach the House floor within a "few weeks" does not index the wage. Instead, the bill calls for the creation of a Minimum Wage Advisory Commission to study and make recommendations that will help ensure that wages keep pace with the cost of living in Massachusetts.
"Let me be clear: indexing the minimum wage to account for future rises in the cost of living would have many positive benefits, and is included in the Senate's version of the bill. However, my central objective in leading this legislation was to ensure that we achieve as many positive changes for working class families as possible, while also developing a bill that would actually pass in the House," Conroy wrote in a blog post published on Blue Mass Group on Thursday morning.
Organizers behind a proposed ballot question to raise the minimum wage have said indexing to inflation is an important piece of the proposal, and have not ruled out going to the ballot in November if it is excluded from a final wage hike bill.
Conroy wrote, "After months of conversations, it was clear to me that a bill with indexing would face opposition and put other important provisions of the bill at risk."
The minimum wage sections of the bill would also lengthen the statute of limitations for minimum wage, overtime and record-keeping violations by one year to three years, ensure that farm and hospitality workers are eligible for overtime pay and raise the tipped worker minimum wage from $2.63 to $3.75 by July 2016.
The bill does not recommend a separate minimum wage for teenaged workers as promoted by retailer and small business trade groups, but it would exempt seasonal student camp counselors and counselor trainees from minimum wage requirements.
The bill also extends health and safety protections to more than 150,000 state employees, incorporating language from a separate bill (S 2460) that had been recommended by the Labor Committee on Tuesday. The federal law known as the Occupational Safety and Health Act covers private employees and gives states the option of extending OSHA protections to public employees.
The OSHA provision was tacked onto the bill days before committee Conroy is scheduled to join Labor Secretary Rachel Kaprielian to release findings of an advisory committee, created under an executive order, that examined the financial and human costs of state employee work-related injuries, including injuries to police officers, highway workers and health care providers.
The committee, citing statistics produced by the Massachusetts Budget and Policy Center, estimates that raising the minimum wage to $10.50 an hour will directly impact 454,000 workers in Massachusetts at a total cost to businesses of $595 million. Fifty-six percent of workers who would benefit are female.
In talking points compiled by Conroy's office, Democratic leaders believe the additional costs can be absorbed by businesses by adding just two-tenths of a percent to the costs of goods, or 40 cents to a $20 item and 30 cents on a $20 meal.
The unemployment insurance reforms call for employers' contributions rates to be calculated based on a three-year payroll average rather than annual salary costs, a shift that lawmakers argue will lower costs for growing companies and speed hiring.
Municipalities would also receive an offset to avoid paying unemployment insurance benefits to pensioners who are rehired by a city or town on a part-time basis.
The bill also extends the deadline for applications for job-training benefit extensions from the 15th week of benefits to the 20th week to allow more time for the unemployed to seek skills training.