Employee Ownership Representation Act of 2025
- Bill Number
- S. 1728
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Passed Senate
- Latest Action
- 2025-10-17: Held at the desk.
- Last Updated
- 2026-06-24T18:50:22Z
AI-Generated Summary
Purpose
The Employee Ownership Representation Act of 2025 aims to promote employee ownership in businesses, particularly through employee stock ownership plans (ESOPs, which are retirement plans where employees own shares in their company). It expands advisory bodies within the Department of Labor (DOL) to include voices from employee ownership groups and creates new structures to educate, support, and advocate for these practices.
Key Provisions
- Expansion of ERISA Advisory Council: Amends the Employee Retirement Income Security Act of 1974 (ERISA, a federal law regulating private pensions and benefits) to increase the Advisory Council on Employee Welfare and Pension Benefit Plans from 15 to 17 members. This includes adding two representatives from employee ownership organizations. The Secretary of Labor must nominate these new members within one year of enactment.
- Office of Employee Ownership: Establishes a new office within the DOL (separate from the Employee Benefits Security Administration) to oversee the Employee Ownership Initiative from the SECURE 2.0 Act of 2022. The office is led by a director who can hire staff as needed.
- Advisory Council on Employee Ownership: Creates a new seven-member council appointed by the DOL Secretary. Membership includes four employee representatives, one from companies with ESOPs or worker-owned cooperatives (businesses owned and run by employees), one from ESOP providers, and one from related associations. Terms are two years, with limits on political party representation (no more than four from the same party). The council meets at least four times a year, advises the DOL on employee ownership, and submits annual reports with recommendations.
- Advocate for Employee Ownership: Adds a new position under ERISA to serve as a liaison for employee ownership issues. Duties include consulting on initiatives, educating the public, resolving disputes between DOL and ESOP participants, recommending policy changes (e.g., improving access to funding), and coordinating with other federal agencies like the Small Business Administration and Treasury Department. The advocate submits annual reports to Congress on activities, problems, and recommendations, which are also made public. Compensation is set at Executive Schedule Level V pay, with funding authorized as needed.
Significant Changes to Existing Law
- Increases the size and composition of the existing ERISA Advisory Council to explicitly include employee ownership experts, shifting from a general focus on pensions to broader employee ownership representation.
- Builds on the SECURE 2.0 Act (a 2022 law expanding retirement savings options) by formalizing support structures like the new office, council, and advocate, which did not previously exist under ERISA.
- Adds a new section (3005) to ERISA's Subtitle A, Title III, including definitions for ESOPs and eligible worker-owned cooperatives (referencing Internal Revenue Code definitions), and updates the law's table of contents.
- Exempts the new Advisory Council on Employee Ownership from automatic termination rules under federal law (5 U.S.C. § 1013), making it a permanent body.
Potential Impacts
- On Government Agencies: The DOL gains new administrative responsibilities, including staffing an office, appointing council members and an advocate, and incorporating their advice into regulations. This could increase workload and require additional funding, but it centralizes employee ownership efforts outside existing pension oversight.
- On Citizens and Workers: Employees and workers interested in ownership may benefit from increased education, dispute resolution, and policy recommendations, potentially leading to more ESOPs or cooperatives as retirement and succession options for small businesses. Employers considering employee ownership could access better guidance on setup and funding.
- On International Relations: No direct impacts, as the law focuses on domestic U.S. labor and retirement policies.
Main Stakeholders Affected
- Employees and Workers: Gain stronger representation and support for ownership opportunities, especially in ESOPs or cooperatives.
- Employers and Businesses: Particularly small businesses and those with ESOPs, who may receive assistance in transitioning to employee ownership models.
- Employee Ownership Organizations and Providers: Newly represented on advisory bodies, with roles in education and advocacy.
- Department of Labor: Responsible for implementation, nominations, and coordination with other agencies.
- Congressional Committees: The Senate Committee on Health, Education, Labor, and Pensions and the House Committee on Education and the Workforce, which receive annual reports.
- Other Federal Agencies: Such as the Small Business Administration, Treasury, and Commerce Departments, involved in outreach and policy coordination.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens ERISA's framework for employee benefits by integrating employee ownership, potentially influencing future regulations on ESOPs (e.g., fiduciary duties or tax incentives). The advocate's role in dispute resolution could reduce litigation by facilitating informal communication, but it does not create new enforcement powers.
- Constitutional: Aligns with Congress's authority under the Commerce Clause to regulate employment and retirement plans affecting interstate commerce; no apparent conflicts with free speech, due process, or other rights.
- Political: Promotes worker economic empowerment as a non-partisan issue (with balanced council membership), potentially appealing across ideologies by supporting business succession and retirement security. It could influence broader debates on income inequality and labor rights without mandating changes, focusing instead on advisory and educational tools.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (2)
Sen. Hassan, Margaret Wood [D-NH], Sen. Hickenlooper, John W. [D-CO]
Recent Actions
- 2025-10-17: Held at the desk.
- 2025-10-17: Received in the House.
- 2025-10-16: Message on Senate action sent to the House.
- 2025-10-09: Passed Senate with an amendment by Unanimous Consent. (consideration: CR S7101-7103; text: CR S7102-7103)
- 2025-10-09: Passed/agreed to in Senate: Passed Senate with an amendment by Unanimous Consent.
- 2025-09-11: Placed on Senate Legislative Calendar under General Orders. Calendar No. 157.
- 2025-09-11: Committee on Health, Education, Labor, and Pensions. Reported by Senator Cassidy with an amendment in the nature of a substitute. Without written report.
- 2025-09-11: Committee on Health, Education, Labor, and Pensions. Reported by Senator Cassidy with an amendment in the nature of a substitute. Without written report.
- 2025-07-30: Committee on Health, Education, Labor, and Pensions. Ordered to be reported with an amendment in the nature of a substitute favorably.
- 2025-05-13: Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- 2025-05-13: Introduced in Senate
Bill Versions
- Employee Ownership Representation Act of 2025 — issued 2025-10-09 — PDF (14 pages)
- Employee Ownership Representation Act of 2025 — issued 2025-05-13 — PDF (2 pages)
- Employee Ownership Representation Act of 2025 — issued 2025-09-11 — PDF (14 pages)