Sign on to Support the California Employee Ownership Act!
CA Legislature
California Senate Bill 1407, the California Employee Ownership Act, introduced by Senator Josh Becker in February 2022, will educate business owners and other stakeholders about employee ownership, provide funding for business outreach and technical assistance, and streamline and reduce barriers to the transition process. The bill’s co-sponsors are the Worker-Owned Recovery California (WORC) Coalition, Project Equity and Ownership America. This effort represents two years of advocacy work and coalition building toward the expansion of worker ownership in the U.S..
This bill was approved by the state Senate in May and by a committee in the Assembly on June 21st. It now requires allocation of funding through the budget process and approval by the full assembly.
Broad-based employee ownership is an effective bipartisan strategy that provides economic security for workers, small businesses, and the local community. Helping businesses consider and execute transitions to employee ownership is now more critical than ever for two primary reasons: the COVID-19 crisis and the pressure of the Silver Tsunami. Baby boomers own approximately 359,000 businesses in California, employing 3.9 million workers, and the lack of succession plans for 85 percent of these businesses will result in many of these companies closing altogether or selling to non-local buyers.
SB 1407 will establish:
- A dedicated hub within the Office of Small Business Advocate with a designated program manager to support and align the work of various state agencies in support of broad-based employee ownership
- The Employee Ownership Education and Outreach Grant Program to fund education and outreach services that increase awareness for employee ownership transitions
- The Employee Ownership Conversion Technical Assistance Program to help qualified businesses considering a transition to employee ownership with the costs of conversion
The WORC Coalition urges all members to join our sign-on letter to support the passage and funding of the California Employee Ownership Act.
Sponsored by
To:
CA Legislature
From:
[Your Name]
SIGN-ON LETTER FOR ASBN MEMBERSHIP IN SUPPORT OF SB 1407
Senate Pro Tem Toni Atkins
Assembly Speaker Anthony Rendon
Senator Nancy Skinner, Budget Chair
Senator Sydney Klamager, Budget Subcommittee Chair
Assemblymember Phil Ting, Budget Chair
Assemblymember Wendy Carrillo, Budget Subcommittee Chair
July 2022
RE: Request for prioritization: SB 1407 (Becker) and concurrent budget request for $20 million GF one-time funding.
Dear Legislative and Budget Leadership:
The undersigned businesses, investors and organizations write in support of a request for a one-time budget allocation of $20 million to fund Senate Bill 1407 (Becker), which will preserve California small businesses, bolster California workers, and create an overall more equitable economy by increasing awareness of and pathways to employee ownership.
SB 1407 will establish a dedicated hub within the Governor’s Office of Business and Economic Development (Go-Biz) that will help educate stakeholders, assist business owners and workers in navigating available resources, provide funding for technical assistance, and streamline and reduce barriers to the existing business transition process. These measures are critical to both increasing awareness of worker ownership and decreasing barriers to the model. The bill also establishes the Employee Ownership Education and Outreach Grants Program to expand education on employee ownership, and the Employee Ownership Conversion Technical Assistance Grants Program to reduce barriers for businesses considering or executing a conversion to employee ownership.
This bill will help pave the way toward a regenerative and strong new economy. Employee ownership, in the forms of worker cooperatives, Employee Stock Ownership Plans (ESOPs), and employee ownership trusts, is proven to benefit businesses, workers, and local economies. Worker-owned firms see stronger overall business performance and resilience. Workers at these firms see greater wealth-building opportunities and increased job security compared to their counterparts at traditional businesses. And employee-owned companies were four times more likely to retain employees during the darkest days of the COVID-19 pandemic, as they have been in many past recessions.
Both evidence and experience suggest that employee ownership is a particularly powerful wealth-building opportunity for workers and communities of color. Providing additional pathways for workers of color to become employee-owners is an essential component of any strategy to address the racial wealth gap.
Now is the time for California to harness the power of worker ownership. Prior to the pandemic, California small businesses faced mounting pressures from an impending wave of retirement amongst business owners. Baby boomers own approximately 359,000 businesses in California, which employ 3.9 million people. A majority of business owners do not have a formal succession plan, and most owners who try to sell their businesses cannot find a buyer. These challenges have been compounded by the economic impacts of the COVID-19 pandemic, which has brought mass business closures. This dual crisis requires immediate and bold action.
As California continues to recover from the economic impact of the pandemic it has the opportunity to not only rebuild workplaces, but to proactively invest in models that are proven to create more resilient businesses, workers, and communities.
For these reasons, the American Sustainable Business Network, the Worker-Owned Recovery California (WORC) Coalition and these additional businesses, investors, and organizations support SB 1407 (Becker) and respectfully request your “Aye” vote on the bill and the budget proposals that will fund its implementation.