Employee Ownership Financing Act

This bill aims to help workers own more of the companies where they work. It creates a new office in the Department of Labor to run an employee ownership program and a loan program. The loan program would give loans or guarantees to employee stock ownership plans (ESOPs) and worker-owned co-ops so companies can become at least 51% employee-owned, increase employee ownership, or expand and save jobs. Loans can last up to 15 years, with interest capped at a market-based rate. Private-equity–owned entities are excluded. To qualify, companies must meet guardrails like having independent board members, an employee committee to boost worker voice, clear voting rights, retirement investment options, and regular updates to employees. An independent review must show the company can repay the loan. Money paid back goes into a special fund to make more loans, with a $500 million portfolio limit at any one time .

If a company plans to permanently shut down a plant, it must give workers the first chance to buy the plant or the company through an ESOP or a worker co-op. The price must be fair market value based on an independent appraisal paid for by the employer, and the plant must stay open during good-faith negotiations and for 30 days after the sale closes. The bill also updates related rules so these purchases are allowed under benefit and tax laws .

A small advisory council would guide the Labor Department, and the Department must issue rules within a year. The bill authorizes $500 million in 2026 for the loan program and administrative funds to get it started. The new office must be set up within 90 days of the bill becoming law .

Key points

• Who is affected: Workers, ESOP companies, worker-owned co-ops, and businesses considering employee ownership or facing plant closure .
• What changes: Federal loans and guarantees to support employee ownership; worker “first right” to buy a closing plant; rules to strengthen employee voice and protect retirements; creation of an advisory council .
• When: Office created within 90 days; regulations within 1 year; funding available starting in fiscal year 2026; ongoing loan fund with a $500 million cap at any one time .