Biden signs WORK Act for Employee Ownership Outreach and Education
After securing $158,000 in Congressionally Directed Spending for VEOC's outreach, technical assistance, and legal resources development in the spring of 2022, Senator Bernie Sanders finished out the year with another victory for employee ownership when the Senate passed the $1.7 trillion fiscal year 2023 Omnibus Appropriations bill last week.
Included in the Omnibus was the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg (RISE & SHINE) Act of 2022, which includes the Worker Ownership, Readiness, & Knowledge Act (WORK Act). Sanders first introduced the WORK Act in 2009 and has been one of many tireless advocates helping push it across the finish line. Among other things, the WORK Act will:
Require the U.S. Department of Labor to provide formal guidance on good faith fair market value for shares of a business to be acquired by an employee stock ownership plan, eliminating costly uncertainty for ESOPs.
Authorize up to $50 million in grants over 5 years from the DOL for increasing education and awareness about employee ownership, the first federal grant program specifically dedicated to promoting employee ownership.
The grant money won't kick in for a couple of years but will eventually be used to help create and expand employee ownership centers like our own.
We know from both experience and national data that state centers lead to more employee-owned companies. In the years from 2014 through 2017, U.S. Department of Labor data shows that 40% of all new ESOPs were headquartered in the eight states that had state centers during that period (many more state centers have since been set up thanks to the folks at the Employee Ownership Expansion Network).
So, while we can't predict the precise impact of these unprecedented new resources, it's safe to assume that between this and the high level of interest we continue to see in employee-owned business models, the movement for broad-based employee ownership in the U.S. could very well be on the cusp of propelling ESOPs and Worker Cooperatives into the "mainstream."
