We work with the field to collectively leverage this unique moment in time to significantly advance employee ownership
With all the talk about economic recovery in Washington D. C. and state houses across the country, shouldn’t employee ownership be up front and center in our public programs and policies? We think so!
Project Equity is working with our peer organizations in the fields of employee ownership, quality jobs, and socially responsible business to collectively leverage this unique moment in time to significantly advance employee ownership.
A big tent approach that prioritizes awareness
From a policy perspective, employee ownership has the distinct advantage of being one of the rare strategies that appeals across the political spectrum. It is also a win-win approach to business, with models appropriate for businesses of all sizes, and public policies and programs that every level of government can implement.
In our partnerships with local governments and our state and national policy work, we advance proven approaches through which federal, state and local governments and government-funded programs can support employee ownership:
- Educate agency staff who oversee economic development, business and labor programs about the silver tsunami of retiring business owners and the employee ownership solution, including the full spectrum of broad-based employee ownership. Read about ESOPs, worker cooperatives and Employee Ownership Trusts.
- Fund awareness programs about succession planning and all forms of broad-based employee ownership, aimed at business owners, their advisors, lenders and business-serving nonprofits
- Subsidize employee ownership feasibility assessments and technical assistance for worker-owners
- Remove real and perceived barriers to employee ownership, such as the default practice of requiring individual guarantees on loans to cooperatives
Get involved today
Several current policy opportunities are advancing one or more of these strategies. Here are some ways you can learn more and get involved.
State Small Business Credit Initiative (SSBCI)
The State Small Business Credit Initiative (SSBCI) provides $10B in federal dollars to the states to support small businesses. Thanks to advocacy from the employee ownership community, SSBCI funds can be used to support transitions to employee ownership and to provide capital to employee-owned companies. This opportunity requires active support from employee ownership champions and also requires educating state agencies that are administering SSBCI, and engaging business owners, employee-owned companies and capital providers to participate in these new programs.
Worker Ownership Readiness and Knowledge Act (WORK Act)
The United States Department of Labor announced its new Employee Ownership Initiative in July 2023, as required by the Worker Ownership Readiness and Knowledge (WORK) Act. After several prior attempts, the WORK Act was passed in December 2022 as part of the Omnibus Spending Bill. The Department of Labor is now charged with making improvements to the regulations regarding ESOPs and distributing $50M in grants to the states to promote employee ownership starting in fiscal year 2025.
These funds can support (1) outreach and education to employees and employers about employee ownership, succession planning, and employee participation in business decision-making and success; (2) Technical assistance to help employees become business owners, for feasibility studies regarding the transition of existing businesses to employee ownership, and to “help employees and employers start new employee-owned businesses”; (3) Training employees and employers in methods of employee participation; and (4) Training entities to apply for funding under this program (states themselves or actors within states may apply if their states do not do so).
California Employee Ownership Act
Project Equity, Worker-Owned Recovery California (co-founded by Project Equity and other California-based worker ownership advocates in 2020) and Ownership America co-sponsored the California Employee Ownership Act, SB1407. Senator Josh Becker introduced this groundbreaking bill in April 2022, and it passed with unanimous bipartisan support and was signed into law by Governor Newsom in September 2022. Read about the bill and what we learned in the effort to pass it in our blog.
In 2024, we will continue our advocacy to get $5M in state funding to support a three-year pilot for California’s Employee Ownership Hub.
Contact Hilary Abell, [email protected], if you’d like to get involved.
Every state has one or more state agencies that are preparing to receive significant capital for small businesses through SSBCI. We encourage employee ownership advocates to reach out to the relevant agencies in their state to educate them about employee ownership.
City and County governments around the country are supporting employee ownership. Project Equity’s local government partnerships include the cities of Berkeley, San Francisco, Long Beach and Los Angeles, as well as LA County and Miami-Dade County. Learn more about our city partnerships:
View data studies that we’ve created with local government partners to illustrate the effects of the small business closure crisis.