Gov. Mikie Sherrill has signed legislation to expand state assistance for small businesses seeking to transition to employee ownership.
The law, S4218/A5016, directs the New Jersey Economic Development Authority to establish an Employee Ownership Transition Program. The initiative will offer support for feasibility studies, consulting services, outreach, and low-interest financing for businesses converting to employee-owned models.
The legislation also creates an Employee Ownership Revolving Loan Fund, which lawmakers said is the first in the country designed to directly finance the creation of employee-owned businesses.
“Helping businesses stay rooted in New Jersey is vital to protecting thousands of jobs and millions of dollars in investment,” Sherrill said. “Investment in proven business succession strategies like employee ownership will protect jobs and maintain the vibrancy of our communities.”
The NJEDA will be authorized to provide financial assistance for feasibility studies, offer technical support to businesses considering employee ownership, publish educational materials, and work with colleges and other institutions to promote the model.
New Jersey has nearly 90 employee stock ownership plans, with approximately $65 billion in assets serving more than 423,000 current employees and retirees. Eligible current employees hold an average stock account of nearly $190,000, according to the administration.
The legislation was sponsored by State Sens. Andrew Zwicker (D-South Brunswick) and Shirley Turner (D-Lawrence), and Assemblymembers Lisa Swain (D-Fair Lawn), Roy Freiman (D-Hillsborough), and Al Barlas (R-Cedar Grove).
“New Jersey is facing a generational transition in business ownership, so we need new policies that will keep successful companies throughout the state operating and growing in the years to come,” Zwicker said.
Swain said the law would give employees a greater role in the future of the businesses where they work.
“By supporting and expanding employee stock ownership programs, we’re giving hardworking constituents a real shot at building generational wealth while handing small business owners a strategy to keep their doors open for the long term,” Swain said. “When workers own a piece of the company they dedicate their careers to, everyone wins.”