Senate Appropriations Committee Includes Funding for Employee Ownership Initiative Grant Program in FY25 Labor, Health and Human Services, Education, and Related Agencies Funding Package

The Senate Committee on Appropriations has directed $2 million to fund the grant program of the Department of Labor’s Employee Ownership Initiative in the Fiscal 2025 Labor, Health and Human Services, Education, and Related Agencies Appropriations bill. The full Committee approved the funding package on a strongly bipartisan 25-3 vote.

The ESOP Association worked closely with Senate appropriators and Committee staff to secure the directed funding for the Employee Ownership Initiative’s grant program, housed within the Department of Labor to “establish and expand employee ownership programs”. The EOI is the first federal program at the Department of Labor specifically dedicated to promoting employee ownership. Its establishment was a long-term priority for The ESOP Association to increase awareness of and promote ESOPs and employee ownership in America.

Under the grant program as authorized by Congress, states will be eligible to apply for funds to support existing programs and facilitate the formation of new programs designed to promote employee ownership, including education and outreach, technical assistance, and training. The DOL will first need to issue formal guidance for grant recipients, as required by the law. 

The Appropriations Committee’s report also specifically directs the Employment and Training Administration (ETA) to administer the grant program, while directing the Employee Benefits Security Administration (EBSA) to focus on developing educational materials to promote best practices. The Committee’s report states:

Implementation of Employee Ownership Initiative: “Within available resources, the Committee expects EBSA to continue its efforts to create and widely disseminate educational materials focused on promoting best practices in employee ownership through the Employee Ownership Initiative authorized by section 346 of the SECURE 2.0 Act of 2022. The Committee also includes $2,000,000 within ETA for the grant program authorized by such section to help establish and expand employee ownership programs. The Committee expects EBSA to provide subject matter assistance to ETA as it develops and administers this grant program.”

“The ESOP Association is grateful to Chairwoman Murray, Subcommittee Chair Baldwin, and the Senate Appropriations Committee for recognizing the potential impact of the Employee Ownership Initiative to grow employee ownership in America,” said Jim Bonham, President and CEO of The ESOP Association. “While there is still a long way to go in the congressional appropriations process, this is a highly positive first step in what will be a multi-year effort to fund the Employee Ownership Initiative.”

In addition, the Committee’s report also includes strong language regarding the DOL’s rulemaking on the adequate consideration exemption:

Adequate Consideration Guidance: “The Committee notes that the SECURE 2.0 Act of 2022 also directs the Department to issue formal guidance on the adequate consideration exemption, as defined in section 407 (d)(6) of ERISA. The Committee is disappointed that EBSA failed to achieve the latest regulatory agenda goal of issuing an adequate consideration notice of proposed rulemaking in March of this year. The Committee urges the Department to prioritize a timely, formal notice and comment rulemaking on the adequate consideration exemption that ensures taxpayers benefit from stakeholder input and experience, consistent with congressional intent.”

However, as The ESOP Association previously cautioned upon committee passage of the House version of the LHHS appropriations bill, this is just the beginning of the FY 2025 appropriations process. The final versions of the bill, if passed by both chambers, will be markedly different and reflect the competing fiscal priorities of the Democratic-led Senate and Republican-led House. There will likely be several opportunities to include directed funding for the EOI, including in a conference committee or continuing resolution if the bill is not passed before the beginning of Fiscal 2025 on October 1.

The ESOP Association continues to work closely with our Congressional champions toward a pathway to directed funding for the EOI, and will keep our members fully informed of any developments.

Click here to read the full Senate Appropriations Committee Report on the Fiscal 2025 Labor, Health and Human Services, Education, and Related Agencies Appropriations bill.