Corey Rosen
Employee Ownership Blog
Corey Rosen
Corey Rosen
Australian Legislative Committee Urges Consideration of Employee Ownership Trusts
Employee ownership in Australia is limited primarily to employee stock purchase plans and employee equity grant programs such as stock options, although some advisors have figured out ways to create something that looks somewhat like a U.S. ESOP. A new report from the House of Representatives Standing Committee on Tax and Revenue titled Owning a Share of Your Work: Tax Treatment of Employee Share Schemes discusses the state of stock plans in the country.
Corey Rosen
Conservative Party in Canada Endorses Employee Ownership Incentives
In its new election platform, the Conservative Party in Canada joins the ruling Liberal Party in pushing for major changes in Canadian law to create an employee ownership structure similar to ESOPs in the U.S. and employee ownership trusts in the UK. The Liberals had already included proposals to promote employee ownership in their proposed budget. The Conservatives endorsed providing capital gain deferrals for owners selling to employee ownership trusts as well as government support to help finance the sales.
Corey Rosen
Employee-Owned Companies Dominate B Lab Best for the World Awards
Fifteen of the 19 winners in the medium- and large-company categories of B Lab’s Best For the World awards for workers are employee-owned (and almost all are NCEO members). B Lab provides certification for companies complying with its standards for meeting various social and environmental goals. The companies are Atomic Object, Butler/Till, Cooperative Home Case Associates, KeHE, King Arthur Baking, New Age Industries, Chroma Technology, Future State, Gardener's Supply, Global Prairie, Hallam-ICS, Ingage Partners, Namaste Solar, Revision Energy, and Tier1 Partners.
Corey Rosen
WSJ Article Points to Need for More Employee Ownership for Workers of Color
An excellent article in the Wall Street Journal on August 5, For Black and Latino Workers, Equity Rewards Are Elusive, discussed how research consistently shows that people of color are much less likely to accumulate equity in their companies than other workers. Quoting General Social Survey data, the article noted that Black and Latino workers who report having stock in their companies have about half of what white workers do. A 2020 survey from Carta, a stock plan administration company, found that in startups, Black employees account for just 2% of all the equity grants.
Corey Rosen
New Colorado Law Provides Tax Credits to Help Fund Converting to Employee Ownership
Colorado has become the first state to pass a law that helps cover some of the costs to convert to employee ownership. On June 23, Governor Polis signed into law H.B. 21-1311, a bill that makes sweeping changes to Colorado tax law, notably a provision to provide $10 million annually in tax credits over the next six years to fund the professional service costs of conversions to employee ownership. The funds could be used to convert to an ESOP, an employee ownership trust, or a worker cooperative. ESOPs can qualify for a credit equal to 50% of the conversion costs up to $50,000; cooperative and employee ownership trusts can get up to $25,000 (see page 21 of the bill).
Corey Rosen
Tax Deferral for Sellers to S Corp ESOPs Included in Bipartisan Bill
On May 5, 2021, the House Ways and Means Committee unanimously passed the Securing a Strong Retirement Act of 2021, referred to as "SECURE Act 2.0" (H.R. 2954) in reference to the SECURE Act of 2019. The bill makes a number of changes to retirement plan law but, unlike the version introduced last year, does not include a provision allowing owners of S corporation ESOPs to get the same Section 1042 tax deferral on the sale of stock to an ESOP trust as owners of C corporation ESOPs can. S. 1770, sponsored by Senators Cardin (D-MD) and Portman (R-OH), does.
Corey Rosen
California and Colorado Legislatures Consider Major Funding Proposals for ESOPs
Several California Assembly and Senate members have written letters to the leaders of the Assembly and Senate budget committees urging inclusion of a $36.5 million appropriation to fund a one-time effort to support employee ownership in the state. So far, the proposal has not generated any opposition. The Senate and Assembly letters can be found here.
Corey Rosen
New York Senate Passes Bill to Allow Engineering, Architecture, and Land Survey Firms to Be Majority ESOP-Owned
New York has traditionally been a state where it is difficult to operate as a majority ESOP-owned engineering, architectural, landscape architectural, or land survey firm. Existing law requires that a majority of the owners be licensed professionals. Following a 60-0 vote on May 4, the New York Senate passed S. 5261 a bill that would allow majority-owned ESOPs to qualify under New York corporate practice rules for these firms if 75% or more of the company’s voting trustees or ESOP plan committee (often the board of directors) are members of the profession.