New legislation gives California’s small business owners new options for succession while offering workers a chance to become co-owners of the enterprises where they work.
Signed into law by governor Gavin Newsom (Democrats) on 29 September, the California Employee Ownership Act was welcomed by the US Federation of Worker Cooperatives (USFWC), whose members and policy director Mo Manklang has been campaigning state laws to grow worker ownership.
Both houses approved the bill unanimously. The law was also backed by Worker-Owned Recovery California (WORC), whose members include worker co-operatives and USFWC, Project Equity, and Ownership America.
The legislation will apply to worker co-operatives, ESOPs, and employee ownership trusts. It will also establish an Employee Ownership Hub within the Governor’s Office for Business and Economic Development (GO-Biz) to provide business owners and workers with resources on employee ownership transitions, as well as support for existing worker-owned businesses.
Specifically, the bill instructs the Hub to “increase awareness and understanding of employee ownership among stakeholders, assist business owners and employees in navigating available resources, and streamline and reduce barriers to employee ownership.” A provision to provide grant funding for up to US$50,000 for feasibility assessments, which formed part of the original bill was not included in the final version. However, the Bill sponsors intend to work to add that back in...
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