BOSTON -- The Massachusetts House and Senate passed a "grand bargain" on Wednesday that would establish a paid family and medical leave policy, raise the minimum wage to $15 an hour and establish an annual sales tax holiday.

House Speaker Robert DeLeo, D-Winthrop, called it a compromise that "will be fair to the workers of the commonwealth and fair to the businesses as well."

"This compromise is designed to benefit working families, support businesses across the Commonwealth, and grow our economy," said Senate President Harriette Chandler, D-Worcester.

The House passed the bill 126-25, largely along party lines with Democrats supporting the bill and Republicans opposing it. There was some debate on the House floor over the lack of a training wage for teenagers and over a roll-back of "premium" pay on Sundays and holidays.

The Senate passed the bill, 30-8.

Gov. Charlie Baker had been pushing lawmakers to develop a bargain to avert proposed ballot questions that would have established paid leave, raised the minimum wage and rolled back the state sales tax.

"I have a pretty longstanding policy about not commenting on legislation I haven't read," Baker said Wednesday. "But based on what I've heard so far, it certainly fits the contours of what I thought a grand bargain on this stuff would look like."

Raise Up Massachusetts, a coalition of labor, clergy and liberal organizing groups, said the organization will withdraw its ballot question on paid family and medical leave if the bill is signed into law.

But the coalition has not yet decided whether it will withdraw its ballot question that would raise the minimum wage to $15 an hour.

"Over the next several days, we will continue having conversations among our coalition and expect to reach a decision on whether to take our minimum wage question to the ballot early next week," the coalition said in a statement.

The Massachusetts House released the bill Wednesday morning after months of negotiations between lawmakers, Raise up Massachusetts, and business groups. The bill sped through the Legislature in a day.

Paid Leave

The bill would establish a paid family and medical leave program, paid for by a 0.63 percent payroll tax, with contributions from employers and employees. The total cost of the leave program is estimated at $775 million. Businesses with fewer than 25 employees would not have to pay in to the fund.

The average per employee cost would be approximately $4.25 a week, split between the employer and employee, according to Sen. Jason Lewis, D-Winchester, Senate chairman of the Committee on Labor and Workforce Development.

Workers would receive up to 12 weeks of family leave, 20 weeks of medical leave and up to 26 weeks total in a year. They could use it to care for a new child, address a medical issue or deal with having a service member overseas.

Workers would be paid 80 percent of their salary up to a certain limit (around $670 a week), then 50 percent after that, to a maximum of $850 a week.

The leave program would go into effect Jan. 1, 2021.

The bill was hailed by some lawmakers as a major step forward. "No one should ever have to choose between a paycheck and caring for themselves or their families members," said Senate Ways and Means Committee Chairwoman Karen Spilka, D-Ashland, a long-time advocate for paid family and medical leave.

Minimum wage

The bill would raise the minimum wage to $15 over five years. There would be a lower wage increase for tipped workers. There would not be a "training wage" for teenage workers.

It would eliminate time-and-a-half pay on Sundays and holidays, phased out over five years.

It would not lower the state sales tax, but it would establish a permanent sales tax holiday beginning in 2019.

Raise Up Massachusetts, in a statement, said it objects to some provisions of the compromise.

"While it is a major victory for the nearly one million Massachusetts workers who will see their wages go up as the minimum wage increases to $15 an hour, 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 coalition wrote.

Today, tipped workers are paid a minimum of $3.75, plus tips. The ballot question would increase that to $9. The compromise bill would raise it to $6.75 over five years.

Raise Up Massachusetts said it is "strongly opposed" to eliminating Sunday time-and-a-half pay. It is also concerned that not all workers would be covered by the minimum wage increase. For example, municipal workers are not covered.

Jon Hurst, president of the Retailers Association of Massachusetts, said in a statement that the legislation "contains very costly initiatives that will negatively impact the thousands of small business owners." "The new payroll mandates passed today will significantly increase costs, resulting in businesses being less competitive, forcing some doors to close and good jobs to be lost," Hurst said.

But Hurst said the results would have been "far worse" had the initiatives went to the ballot, and the Legislature deserves credit for a "balanced resolution." Hurst said retailers learned from the experience that they need to push back against "costly ballot initiatives."

Hurst said his group would withdraw the sales tax ballot questions assuming the paid leave questions doesn't go forward.

Correction: Due to an error on the Legislature's website, an earlier version of this story misstated the Senate vote total.