The USFWC applauds Congress and President Biden on passing the Worker Ownership and Readiness and Knowledge Act, co-sponsored by Senator Sanders (D-VT) and Senator Moran (R-KS).
The legislation appropriates $50 million over five years to create the Employee Ownership Initiative within the Department of Labor to promote employee ownership, by supporting new and existing state employee ownership programs, including:
- Federal grants toward state employee ownership programs that provide education and outreach about the possibilities and benefits of employee ownership and business succession planning.
- Funding projects to gather data and and information about state employee ownership programs
- Acting as a clearinghouse on best practices within employee ownership and disseminating that information
The Employee Ownership Initiative is the first federal worker ownership grant program from the Department of Labor.
Important notes about the Employee Ownership Initiative:
- Will require the Secretary to consult with the Department of Treasury.
- Must be established within 180 days of the enactment of the omnibus bill.
- Includes education and outreach regarding financial education, employee teams, open-book management, and seeking greater employee input.
- Includes technical assistance for conversions, including feasibility studies.
- Training entities to apply for funding for the above uses.
- Provides for the development and fostering of networks of employee-owned companies.
- Begins in fiscal year 2025, with grant caps per recipient starting at $300,000 in 2025 up to $439,200 in 2029, and an appropriation of $4 million in 2025 to $16 million in 2029.
- Requires recipients to submit an annual report describing grant uses.
- Requires that the Secretary submit a report to congress on progress related to employee ownership, including costs and benefits of the program.
- Includes funding starting in 2024 to administer the program.
“This is one of the most consequential pieces of legislation supporting ESOPs in decades,” said Jim Bonham, President and CEO of The ESOP Association. “…We very much look forward to a strong working partnership with DOL and Treasury to develop these new regulations once the bill becomes law.”
“The provisions included in the omnibus are the clearest signal yet that Congress is committed to strengthening employee ownership in America, and doing so in a cooperative, bipartisan way,” Bonham said. “With this legislation, The ESOP Association has achieved a major portion of our longstanding policy agenda in Washington. While there is still much work to be done to secure the future of employee ownership, the wins in this bill are crucial to our efforts. We sincerely thank all our champions in Congress who support ESOPs and employee ownership, and who worked so diligently to help millions of American employee owners.”
“The WORK Act provisions speak loudly – Now it’s clear how Congress is invested in growing worker ownership in the US.” said Esteban Kelly, Executive Director of the U.S. Federation of Worker Cooperatives. “Strong bipartisan support of this legislation shows that our country’s leadership recognizes worker cooperatives and ESOPs as an important tool to build wealth and skills for entrepreneurs. It also ensures more longevity for businesses that are rooted in and reso our communities. We are excited to work with the Department of Labor to implement the WORK Act and we thank our champions Sen. Sanders and Sen. Moran who drove this win home for North American business owners.”
The Employee Ownership Initiative will create major opportunities for state-driven worker ownership education, outreach, and support. The USFWC will keep our community up-to-date on developments and opportunities to advocate.
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