Technical corrections only. The changes reflect the bill's progression from being reported in the Senate to being engrossed, updating legislative status and formatting. No substantive policy changes were made between v2 and v3.
Employee Ownership Representation Act of 2025
- Sponsor
- Sen. Cassidy, Bill [R-LA]
- Committees
- Health, Education, Labor, and Pensions Committee (primary)
- Last action
- Oct 17, 2025
Bottom line
The bill significantly enhances the Department of Labor's infrastructure and resources dedicated to promoting and supporting employee ownership models across the United States.
What it actually does
This bill expands the federal government's focus on promoting employee ownership by increasing representation for employee ownership organizations on an existing ERISA advisory council, establishing a new Office of Employee Ownership within the Department of Labor, creating a dedicated Advisory Council on Employee Ownership, and appointing an Advocate for Employee Ownership. These measures aim to provide greater support, education, and advocacy for employee stock ownership plans and worker-owned cooperatives.
Proponents argue
Proponents argue that expanding employee ownership fosters economic growth, improves worker retention and productivity, and creates opportunities for wealth building among employees. They contend that this bill will streamline federal efforts, provide clearer guidance, and offer dedicated advocacy to help more businesses transition to employee ownership, thereby strengthening local economies and providing stable succession plans for retiring business owners.
Opponents contend
Opponents might argue that while employee ownership is a worthy goal, creating multiple new offices, councils, and advocate positions within the Department of Labor could lead to bureaucratic bloat and potential duplication of efforts with existing agencies or initiatives. They may also question the necessity of such extensive federal intervention in business ownership structures, suggesting that market forces or existing private sector resources are sufficient.
The bill is concise and clearly written, making it accessible for a quick read and easy understanding of its core provisions.
Section 2
Expansion of the ERISA Advisory Council
This section amends the Employee Retirement Income Security Act of 1974 (ERISA) to increase the membership of the Advisory Council on Employee Welfare and Pension Benefit Plans from 15 to 17 members. Specifically, it adds two representatives from employee ownership organizations to the council, ensuring that their perspectives are included in discussions related to employee benefits and pension plans. The Secretary of Labor is mandated to nominate these new representatives within one year of the Act's enactment.
Supporters argue
Supporters argue that including employee ownership representatives on the ERISA Advisory Council will ensure that the unique needs and perspectives of employee-owned businesses and their employees are considered in federal policy-making regarding retirement and welfare benefits, leading to more inclusive and effective regulations.
Critics contend
No specific opposition is typically raised against expanding advisory council membership to include relevant stakeholders, as it is generally seen as a move towards more comprehensive policy development.
Tradeoffs
The primary tradeoff is a slight increase in administrative complexity for the council in exchange for broader representation and potentially more informed policy advice.
Section 3
Establishment of the Office of Employee Ownership
This section directs the Secretary of Labor to establish an Office of Employee Ownership within the Department of Labor, but explicitly outside of the Employee Benefits Security Administration (EBSA), within 90 days of the Act's enactment. The Office will be headed by a Director appointed by the Secretary and will be responsible for carrying out the Employee Ownership Initiative previously established under the SECURE 2.0 Act of 2022. This centralizes and elevates the Department's efforts on employee ownership.
Section 4
Establishment of the Advisory Council on Employee Ownership
This section establishes a new, 7-member Advisory Council on Employee Ownership within the Department of Labor. The Council's membership is specifically structured to include representatives of employees (4 members), companies with ESOPs or worker-owned cooperatives (1 member), ESOP providers (1 member), and ESOP/cooperative associations (1 member). This Council is tasked with advising the Secretary of Labor on carrying out the functions of this Act and submitting annual recommendations. Members serve 2-year terms and are compensated for their service.
Section 5
Establishment of the Advocate for Employee Ownership
This section amends ERISA to establish an Advocate for Employee Ownership within the Employee Ownership Initiative. The Advocate's duties include acting as a liaison between the DOL and various employee ownership stakeholders, providing public education and assistance, helping resolve disputes between the DOL and ESOP entities, recommending legislative and administrative changes, and coordinating with other federal and state agencies. The Advocate is compensated at Executive Schedule Level V and must submit annual reports to Congress and the Secretary of Labor.
The bill defines 'eligible worker-owned cooperative' by reference to section 1042(c)(2) of the Internal Revenue Code of 1986, and 'employee stock ownership plan' by reference to section 4975(e)(7) of the Internal Revenue Code of 1986.
Section 4(f)(1) and Section 5(e)(5)
Why it matters:This is standard legislative practice to avoid reprinting lengthy definitions already established in other federal statutes, particularly the Internal Revenue Code, which frequently defines such entities for tax purposes.
Case for: Referencing existing definitions ensures consistency across federal law and avoids creating conflicting or redundant definitions, simplifying compliance for entities already familiar with these terms.
Case against: For a reader unfamiliar with the Internal Revenue Code, understanding the precise scope and requirements of an 'eligible worker-owned cooperative' or 'employee stock ownership plan' requires looking up external statutes, which adds a layer of complexity to fully comprehending the bill's applicability.
Estimated impact: These definitions are fundamental to the scope of the entire bill, determining which types of employee ownership structures are covered by the new offices, councils, and advocacy efforts.