New DOL Report on Its Employee Ownership Initiative
The Worker Ownership, Readiness, and Knowledge Act (the WORK Act), part of the SECURE 2.0 Act of 2022, directed the Department of Labor (DOL) to establish an Employee Ownership Initiative to promote employee ownership and employee participation. It also authorized funding through the office for state employee ownership outreach and education programs starting in FY 2025. Congress did not appropriate funds for this program, but the most recent DOL appropriation bill contains a “joint explanatory statement” from the appropriation committees directing that $2 million be allocated in the coming year.
The new Division of Employee Ownership (DEO) within the Office of Outreach, Education and Assistance in the Employee Benefits Security Administration (EBSA) was set up in 2023. The program has gotten off the ground, but an extremely limited budget has constrained what it can accomplish. One of the requirements of the Act was to report on the Employee Ownership Initiative. The DOL has now issued that report.
The report states that “DEO’s primary mandate is to encourage new and existing state programs that promote employee ownership and employee participation." Currently, the initiative has just one full-time staff person (Hilary Abell, who cofounded Project Equity).
The report notes that from 2013 through 2023, the number of ESOP participants grew by 8%, driven largely by leveraged ESOPs and nonleveraged public company KSOPs. The number of nonleveraged stand-alone ESOPs declined. The report finds that “total assets in ESOP plans have grown at a notably faster pace than the number of plans and participants, increasing by 57% over this ten-year period. Average assets per plan grew from $197 million in 2014 to $314 million in 2023. . . . From 2014 to 2023, [leveraged ESOPs] increased by 28%, while their total participants grew by nearly 40% and total assets by 184%. This type of ESOP paid $6.2 billion in direct benefits in 2023, nearly tripling from 2014.”
Data on worker cooperatives are harder to obtain and verify, but the report estimates that these firms employ 13,520 people and have a total combined revenue of $806 million, with the number of worker co-ops doubling over the last 10 years. There is also a growing use of employee ownership trusts (EOTs), although there are fewer than 100 overall.
The report states:
As of December 2025, nine states have state-funded employee ownership initiatives. These fall into three categories, with some states included in more than one:
- State agency programs: California, Colorado, Massachusetts, Michigan, and Washington house employee ownership efforts within state agencies.
- Centers at public universities: Iowa, New Jersey, and Ohio host employee ownership centers at their public universities.
- Nonprofits with state funding: California, Colorado, Michigan, New Jersey, and Vermont fund employee ownership education and technical assistance through grants or contracts.
The report provides a more detailed look at each of these programs.
The report describes the DEO's activities over the last year, which have primarily focused on meetings between Hilary Abell and various governmental and nongovernmental entities. A dedicated website is being developed to provide information on employee ownership. The office will also disburse funds for the state programs if and when those funds become available.