On July 10, the Department of Labor (DOL) announced it is creating the Employee Ownership Initiative within its Employee Benefits Security Administration (EBSA). The initiative results from the 2022 Worker Ownership, Readiness, and Knowledge Act (WORK Act), which was enacted as part of the SECURE 2.0 Act in the 2023 Consolidated Appropriations Act. The WORK Act requires the DOL to set up a grant program for state employee ownership centers. Funding for that provision will need an appropriation in the 2023 budget. The DOL’s Employment and Training Division will administer the grant program. The WORK Act also requires the DOL to set up an office to provide information to states and other interested parties about employee ownership. That will be under EBSA.

In its press release, the DOL said that “aligned with President Biden’s promise to lead the most pro-worker administration in history, EBSA will implement a new program to empower workers through ownership arrangements and educate those workers on possible pathways to greater rewards in return for their labor.” The strong endorsement of employee ownership from the top leadership at the DOL is an encouraging sign for employee ownership advocates.

The press release goes on to say:

“Worker ownership arrangements help create pathways for employees to earn a fair share of the profits that their labor makes possible and will play a critical role in the Biden-Harris administration’s fight to give workers a voice on the job and a seat at the table,” said Acting Secretary of Labor Julie A. Su. “This new Department of Labor initiative is an important step in implementing President Biden’s economic plan to empower workers and grow the economy from the middle out and the bottom up — not the top down.”

EBSA’s new initiative includes creation of the Division of Employee Ownership in EBSA’s Office of Outreach, Education and Assistance. The division will support the creation and expansion of worker-owned businesses by:

• Supporting existing programs designed to promote employee ownership and facilitating the formation of new programs.
• Developing a clearinghouse of techniques applied by new and existing state programs and sharing information about these techniques with states.
• Providing education, outreach, and training to inform employees and employers about the possibilities and benefits of worker ownership and business ownership succession planning.
• Providing technical assistance for employee’s efforts to become business owners and helping employers and employees explore the feasibility of transferring full or partial ownership to employees.

“By launching this initiative, the Employee Benefits Security Administration is working to help balance the distribution of power in America’s workplaces and empower the workers who fuel their employers’ ability to be successful day in, day out, while educating employers about how worker ownership can be good for business,” explained Assistant Secretary for Employee Benefits Security Lisa M. Gomez.

In the coming months, EBSA will hold stakeholder meetings to gain important feedback on how to best achieve the initiative’s goals and carry out the division’s activities. Separately, EBSA will also issue formal guidance on valuation of employer stock in employee stock ownership plans, as required by the WORK Act.

Employers and workers can reach EBSA’s Division of Employee Ownership at 202-693-8602 or [email protected].

EBSA is in conversation with the NCEO and other organizations in the field on how best to structure the new program. We have prepared a set of recommendations on how to implement the WORK Act provisions.