New Federal Office and Advocate Created to Boost Employee-Owned Businesses Like ESOPs and Co-ops

If you’ve ever worked at a company where the employees actually own a piece of the action—think ESOPs (Employee Stock Ownership Plans) or worker cooperatives—you know the game changes when you have skin in the game. The Employee Ownership Representation Act of 2025 is basically the federal government saying they want more of that.

This bill is an internal restructuring effort at the Department of Labor (DOL) designed to put employee ownership on the front burner. It creates a whole new infrastructure dedicated to promoting and supporting these ownership models. The key moves are establishing a new Office of Employee Ownership, setting up a dedicated Advisory Council, and creating a specific federal role called the Advocate for Employee Ownership.

The DOL Gets a New Department

First up, this Act mandates the creation of the Office of Employee Ownership within the DOL, separate from the existing benefits security division (SEC. 3). Think of it as a dedicated hub whose sole focus is to execute the Employee Ownership Initiative that Congress previously started. This new office, led by a Director appointed by the Secretary of Labor, will essentially be the government’s marketing and support arm for businesses looking to transition to employee ownership. If you’re a small business owner thinking about retirement but want your company to stay local and benefit your long-time employees, this office is supposed to be the place you go for guidance.

The Advocate: Your Policy Navigator

Perhaps the most practical addition for everyday folks is the Advocate for Employee Ownership (SEC. 5). This new role is designed to be the liaison between the federal government and the employee ownership community—employers, workers, and ESOP sponsors. The Advocate’s job is multifaceted: they’re responsible for public education, helping businesses expand ownership, and, crucially, serving as a go-between to resolve disputes between ESOP sponsors and the DOL. If a regulatory snag threatens the retirement savings of workers in an ESOP, the Advocate is supposed to step in to improve communication and sort it out.

They also have a mandate to identify and suggest changes to laws or administrative rules—including issues around getting capital—that would help promote employee ownership plans. This means the Advocate will be paid to find the bureaucratic roadblocks and recommend how to clear them, which is a big deal for worker co-ops and small ESOPs that struggle with financing.

Adding New Seats at the Policy Table

Beyond the new offices, the bill ensures that employee ownership voices get a permanent seat in federal policy discussions. It expands the existing ERISA Advisory Council (the group that advises the DOL on retirement and welfare plans) from 15 to 17 members, specifically requiring that two of those new spots be filled by representatives from employee ownership organizations (SEC. 2). This ensures that when the DOL is writing rules about your 401(k) or pension, someone in the room is also thinking about the unique structure of an ESOP.

Additionally, the Act creates a brand-new, separate Advisory Council on Employee Ownership (SEC. 4). This council has seven members—four representing employees, and three representing the companies and service providers—and is tasked with giving advice directly to the Secretary of Labor on carrying out this new Act. They must meet at least four times a year and file an annual report, essentially creating a permanent, high-level feedback loop between the employee ownership sector and the head of the DOL.

What This Means for You

For the average worker, this bill doesn't change your paycheck tomorrow, but it signals a major shift in how the government views employee ownership. If you work at an ESOP, you now have a dedicated Advocate in Washington whose job is to look out for your plan and smooth out regulatory issues. For businesses, this means more resources, clearer guidance, and a federal bureaucracy that is, by mandate, required to be more supportive of succession planning that involves selling the company to its employees.

While the Secretary of Labor has broad discretion in appointing the Advocate and the Director of the new Office, which could lead to some political turnover, the establishment of these permanent structures and councils suggests that promoting employee ownership is now a baked-in, long-term federal priority.