Sponsors (5)
Official title: Require the Secretary of Labor to establish the Office of Employee Ownership to carry out the Employee Ownership Initiative and establish and carry out the Employee Ownership Loan Program, and for other purposes.
Introduced July 24, 2025 by Bernard Sanders · Last progress July 24, 2025
The bill expands federal support, financing, and administrative capacity to help convert businesses to employee ownership and preserve jobs, but it increases federal fiscal exposure, creates new administrative burdens and compliance costs for small firms, and raises legal and fiduciary trade-offs that could limit who benefits in practice.
Small-business owners and their employees gain access to up to $500 million in loans/loan guarantees and a sustained lending program to finance conversions to employee ownership, making buyouts and ESOPs materially more affordable and feasible.
Workers at closing plants get a formal opportunity to purchase the business (ESOP or cooperative) and can keep the plant open during negotiations and for at least 30 days after closing, helping preserve jobs and wages during transitions.
The bill creates a centralized Office, defines a Director, and funds initial staffing/administration, which should speed program delivery, outreach, loan administration, and technical assistance for conversions to worker ownership.
Taxpayers face significant fiscal risk from the loan program (up to $500 million) and from potentially open‑ended administrative commitments, since defaults and ongoing "such sums as may be necessary" obligations could increase federal exposure.
Program administrative, compliance, and transaction requirements (third‑party valuations, cash‑flow studies, governance conditions, reporting) will raise costs and slow conversions, disproportionately burdening small firms seeking to participate.
Employers required to keep plants open, pay for independent appraisals, and extend negotiations during potential buyouts will incur additional costs and potential operating losses, which can discourage sales or accelerate closures.
Based on analysis of 8 sections of legislative text.
Creates a DOL Office and a $500M loan/guarantee program to help workers buy companies, adds a WARN-based right-of-first-refusal, and provides ERISA/IRC exemptions for such purchases.
Creates an Office of Employee Ownership at the Department of Labor and a federal loan and loan-guarantee program to help workers buy companies and expand employee-owned businesses. It requires employers facing a plant closing to offer employees a chance to buy the plant or company through an ESOP or worker-owned cooperative, provides ERISA and tax exemptions for such transactions, and authorizes up to $500 million to make loans and guarantees and funding for program startup and administration.