The minimum wage in Massachusetts would increase to from $8 an hour to $11 an hour by 2017 under a deal announced Wednesday night by top House and Senate Democrats that would give Massachusetts the highest statewide minimum wage in the country while also reforming unemployment insurance to help employers with stable payrolls save money.
The panel of House and Senate lawmakers negotiating the compromise sealed the deal on Wednesday night, filing a report that would phase in the minimum wage hike by $1 at a time starting in January 2015 when the wage would increase to $9 an hour.
The bill also includes an overhaul of the state's unemployment insurance system, adjusting the rates paid by businesses to cover the cost of benefits for the jobless by smoothing increases to avoid sharp spikes in rates and rewarding employers with stable workforces.
The compromise heeded the concerns of business groups who worried that the implementation date for the wage hikes of July 1, which had been included in both the House and Senate bills, would be to soon for employers to adjust to the costs and payroll changes. The conference committee has recommended delaying the first wage increase until Jan. 1, 2015 with each additional increase coming a year later.
The conference committee also adopted House language that would raise the minimum wage for tipped workers over the next two-and-a-half years from its current level of $2.63 to $3.75. The Senate had recommended a wage of $5.50 an hour before tips.
The Senate is expected to vote on the bill when it meets on Thursday, according to a senior Senate staffer.
The compromise excluded a Senate-backed provision that would have indexed future increases in the minimum wage to inflation, a measure that proponents argued to be necessary for wages to keep pace over time with the rising cost of living in Massachusetts.
The House earlier this year rejected indexing, and proposed to raise the minimum wage to $10.50 in line with what organizers behind a ballot petition that could still go before voters have proposed. The ballot petitioners also want to see the wage base indexed to inflation, and it remains to be seen whether the compromise bill with a higher wage will be enough to convince organizers to drop the ballot drive.
The House, which passed an economic development bill 125-23 late Wednesday night, is expected to take up the conference report as soon as next week, according to a House official.
Follow Michael Naughton on Twitter @metrobosmike.