The PaCEO Celebrates EO Month,

and the Introduction of the

Office of Employee Ownership in Pennsylvania!

On October 26, 2022, Pennsylvania celebrated Employee Ownership Month with a Press Conference in the Capitol Rotunda in Harrisburg, PA.

The celebration included a Citation honoring the Pennsylvania Center for Employee Ownership, but more importantly, the formal introduction of PA House Bill HB-2888, establishing a Pennsylvania Office Of Employee Ownership, and the introduction of the Pennsylvania Employee Ownership Assistance Act. 

The bill, when passed, will create an Office of Employee Ownership within the Department of Community and Economic Development (DCED) whose charge is to actively raise awareness about the benefits of EO, and provide informational, technical, and financial assistance to new and existing employee owned companies throughout the Commonwealth.

The Bill is the bipartisan work of Rep. Sara Innamorato (D-Allegheny), Rep. Greg Rothman (R-Cumberland) and the Pennsylvania Center for Employee Ownership. It has been assigned to the House Commerce Committee for deliberation.

The bill is designed to promote and help with Employee Stock Ownership Plans (ESOPs), Worker Cooperatives, Employee Ownership Trusts (EOTs), as well as “other employee ownership organizations”, as determined by the Secretary of the DCED.

The Measure also creates a “Pennsylvania Employee Ownership Advocate”. This is a gubernatorial appointment, reporting directly to the Governor, who will be responsible for budgeting in a series of specific areas including Loans, Loan Guarantees, and Grants (for smaller enterprises). Further, the Advocate will be responsible to ensure that the DCED is thoroughly completing the requirements of the Act and determining additional legislation necessary to enhance and advance EO within Pennsylvania. 

In the successful Press Conference last week, numerous elected Officials attended to support the legislation and focus on a unique and critical issue. – Bipartisanship. Members of the General Assembly from both sides of the aisle took the opportunity to emphasize the bipartisan nature of not just this Bill, but of Employee Ownership as a whole. 

In a time of frequent national and local divide, Members can sit together and improve our world in a united way. 

In a joint statement released by Co-Sponsors Innamorato and Rothman they said:

“In the next ten years, nearly 2.5 million businesses headed by baby boomers that employ 25 million people will be looking to transfer the ownership of their company. 

“Converting these businesses to an employee ownership model could be a viable solution to allow an owner to strategize their exit while keeping the company and the jobs in the community and honoring the business owner’s legacy. “

Innamorato and Rothman said that with dedicated resources, Pennsylvania could be a leader in helping workers take over the business, gain an ownership stake, reorganize it, and navigate a successful path forward by adopting an employee-owned model.  

“Our legislation will establish the Office of Employee Ownership within the Department of Community and Economic Development (DCED) to do just that. The expressed goal of the office is to provide educational, financial, and technical assistance to existing employee-owned companies and those firms seeking to retain jobs by restructuring an existing business into an employee-owned enterprise.

“Keeping and growing Pennsylvania-based companies is paramount to the economic success of our Commonwealth. Through the expansion of employee ownership enterprises, we can assist in creating an economic climate that is good for workers, good for business owners, and good for the host community.”

They asked State Reps to join in assisting Pennsylvania workers in grabbing an opportunity to reorganize their workplace, salvage local businesses, and improve the economy through employee ownership. 

In last week’s event at the Capitol, Rothman remarked that, 

“When people own something, they care about it more. They dig deeper roots. They want to see it succeed.” 

In addition to the elected officials, the Press Conference heard from Dr. David Finegold, President of Chatham University in Pittsburg, and the creator of one of the nation’s first academic Chairs in Employee Ownership, while serving as Dean of Academics at the Rutgers University Graduate School of Labor and Business Management.

Also speaking were Rebecca James, VP of Communications and Marketing at HB-Global, a 100% employee owned firm in Harrisburg, which has grown from 195 employees to over 2,000. Kevin McPhillips, Executive Director of the PaCEO moderated the event, and PaCEO Board Member, Charita Bush, Training Manager at KTA-Tator, gave perhaps the most compelling reason for support of EO, when she shared her personal story, and what employee ownership has done for her, her family, and her organization

In the past 5 years Pennsylvania has been a leader in advancing new employee ownership. In 2015, PA was in the middle ranking of States in creating new Employee Owners, yet over the past 5 years, based on the latest US Labor Department 5500 data, they have been second in the nation, behind only California, with 3 times the population. And in a recent survey by Certified EO, they have 3 Cities in the top 25 cities in the US for Employee Ownership (Pittsburgh, Harrisburg, and York) with Harrisburg ranking 3^rd in the nation. 

Separately, the PaCEO has created the nation’s first Citywide Task Force on Employee Ownership, which in Q1 of 2023, in conjunction with Pittsburgh City Government and Chatham University, will approach 30,000 businesses with the message of the value and benefits of Employee Ownership. This city supported effort will also include coordination with 30 Pittsburgh Community Groups, who will hold informational sessions, conducted by the nonprofit PaCEO, to introduce all forms of employee ownership to the neighborhoods and Districts in Pittsburgh.

It is a genuinely exciting time for EO in Pennsylvania, with much work to do, and much hope for a better future for all.

For more information, please contact Emalie Martzall at emalie@paceo.org.