Last week, Gov. John Hickenlooper signed HB 17-1214, directing the state Office of Economic Development and International Trade to establish a revolving loan program to help companies transition to employee ownership. The bill took effect upon the governor’s signature.
The bill cites many benefits to employee ownership, including:
- Only 1.3 percent of employees at employee-owned companies were laid off in 2014 compared to 9.5 percent at other companies;
- Employers at companies that have an employee stock ownership plan contributed 75 percent more to each employee’s retirement plan compared to companies with traditional plans;
- Employees of employee-owned businesses earn 5 to 12 percent higher wages that their counterparts at other businesses; and
- After five years, employee-owned businesses are 66 percent more likely to still be in business than their counterparts.
The program applies to companies that are at least two years old, have at least three employees, have annual net revenue of no more than $5 million, offer employee ownership opportunity to every employee, and plan to or have entered into an employee ownership agreement with at least half their employees.
Under the new law, “loans offered as part of the program must be used to obtain technical assistance or for transition purposes and may not be used to pay off other debt, for general operating expenses, or for capital expenditures.”