NJ Legislature Passes Major Employee Ownership Bill

New Jersey bill A5016/S4218, which would establish a program in the state Economic Development Administration to “encourage employee ownership awareness and provide funding and advisory support,” has now passed both chambers of the state legislature. The bill makes permanent a program created under former Governor Phil Murphy in 2024 to provide technical assistance and outreach and to help defray the costs of feasibility studies for companies considering employee ownership transitions. The current governor, Mikie Sherrill, is expected to sign the bill.

The outreach initiative will be led by the Rutgers University Institute for the Study of Employee Ownership and Profit Sharing, which also runs the New Jersey/New York Center for Employee Ownership. ESOPs, worker cooperatives, and employee ownership trusts (EOTs) would be eligible for grants to cover up to 90% of the costs for a feasibility study or $35,000, whichever is lower. The law does not include a specific appropriation and would rely on funds set aside for this by the governor.

New Jersey becomes the third state to enact a program that includes outreach and funding, joining Colorado and Washington, although the Washington program lost funding soon after it was enacted. Massachusetts and Michigan also have state-funded outreach and education programs.