EBSA will establish a dedicated Division of Employee Ownership within the Office of Outreach, Education, and Assistance
Employee ownership is a powerful force for financial well-being and Employee Stock Ownership Plans (ESOPs) benefit both business owners and employees. The US Federal government recognized these factors in the 2023 national budget by including support for provisions dedicated to spurring ESOPs and Congress has introduced bi-partisan measures to advance employee ownership. The drumbeat of support continues with the U.S. Department of Labor’s recent announcement of an exciting new Employee Ownership Initiative within its Employee Benefits Security Administration (EBSA).
The press release for the initiative listed four main deliverables to further support and promote employee ownership.
Division of Employee Ownership: The EBSA will establish a dedicated Division of Employee Ownership within the Office of Outreach, Education, and Assistance. This division will champion the cause of employee ownership, providing valuable resources and assistance to companies looking to adopt employee ownership models.
Supporting and Sharing Knowledge: The EBSA will support existing programs that promote employee ownership and facilitate the formation of new programs. By creating a clearinghouse of best practices and techniques, they will share valuable information to help states develop effective employee ownership programs.
Education and Outreach: The initiative will focus on educating both employees and employers about the potential benefits of employee ownership. By fostering a better understanding of the advantages and possibilities of employee ownership, more businesses can explore this model as a pathway to success.
Technical Assistance: The EBSA will provide technical support for employees seeking to become business owners and assist employers in exploring the feasibility of transferring full or partial ownership to their workforce. This hands-on guidance will help navigate the routes to employee ownership.
In the coming months, EBSA will seek feedback from stakeholders to fine-tune the initiative’s goals and activities, including the National Center for Employee Ownership. Additionally, they will issue formal guidance on the valuation of employer stock in employee stock ownership plans.
Emphasizing education and clear guidance on vital, technical aspects of ESOPs, including valuations, is critical to success. The Menke team is excited by the focus on employee ownership at the Federal, state and local level as we usher in the decade of the ESOP.
