Two New Proposals in Congress to Promote Employee Ownership
Two new proposals to promote employee ownership have been introduced in Congress, the National Worker Cooperative Development and Support Act and the Empowering Small-Business Ownership Participation (ESOP) Act.
National Worker Cooperative Development and Support Act
Representative Ro Khanna (D-CA) reintroduced the National Worker Cooperative Development and Support Act, a bill first introduced by him in the last Congress. The bill directs the heads of the Small Business Administration (SBA), the Internal Revenue Service, the Department of the Treasury, the Department of Commerce, the Department of Agriculture, and the Department of Labor to “periodically review existing regulations and propose revisions to such regulations to remove barriers that impede the formation and expansion of worker-owned cooperative businesses.” The bill also directs these agencies to develop a coordinated outreach and education program on worker cooperatives and to establish a United States Council on Worker Cooperatives, led by the Department of Labor. The council would take the lead on the education and regulatory efforts among the agencies.
The bill would create a $60 million, 10-year small business lending pilot program through the SBA for worker-owned cooperatives. It would also provide funding through the Community Development Financial Institutions Fund for education and services to create and manage worker co-ops.
Empowering Small-Business Ownership Participation (ESOP) Act
Representative Cory Mills (D-FL) has introduced the “Empowering Small-Business Ownership Participation (ESOP) Act.” A December 9, 2025, press release states the bill would allow ESOPs that own 30% or more of a company’s stock to qualify for the special Department of Defense pilot program to encourage ESOPs. The 2022 National Defense Authorization Act provides that companies that are or become 100% ESOP-owned can receive noncompete follow-on contracts for their work. The award is contingent on finding that the contractor’s performance is satisfactory or better. The program will run through 2027. The bill has not yet received a bill number.