Local legislation:
RI Opportunity for
Employee Ownership
The RI Opportunity for Employee Ownership Act (2025 session: S-0752 , H-5940)
is a carefully crafted policy that strengthens the state tax base, as well as the health of local economies across Rhode Island, all while creating new avenues for business ownership. This bill is aimed at maximizing small business continuity when owners sell or transition into retirement - a critical emerging need across Rhode Island - and providing employees the life-changing opportunity to co-own their workplaces.
We’re grateful to our friends at Coalition for Worker Ownership and Power COWOP in Massachusetts, for creating the original version of this bill and offering us helpful advice and support (including the language of this section)!
The Problem:
Despite anchoring the economic health of main streets in communities large and small, a majority of RI small businesses have no succession plan in the event of the owner ceasing operations for any reason. This can leave deep negative impacts in our communities. Meanwhile, the pace of retirements is increasing- a phenomenon referred to as a coming “silver tsunami”.
The Bill:
The Opportunity for Employee Ownership Act is designed to help stabilize the state’s tax base and small business landscape by incentivizing the creation of worker-owned businesses. By facilitating sales of small businesses to existing employees when a business owner transitions out of ownership, local economies can preserve successful businesses, while also gaining the many demonstrated benefits of worker ownership.
The bill allows the owner to realize additional income from the sale, by exempting a qualified sale to employees from state capital gains tax obligations, for any gains under $1M. This ensures the bill is targeted specifically at small businesses, and allows local economies to maintain their vitality by providing primary stakeholders a way into running their own business, while circulating their revenue locally.
Why Worker Ownership?
Employees owning the businesses where they work have shown time and again that they improve business resilience and strengthen the communities in which they operate.
Worker owned businesses provide:
a pathway to business ownership for entrepreneurs without access to inherited wealth
increased job satisfaction, workplace democracy, job security and income for the people doing the work
Small businesses often play a key role to anchor economic and civic life in our communities, and worker ownership can allow them to remain open and thrive.
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Show your support by:
connecting with RIWCA: instagram @ricooperatives, email ricooperatives@gmail.com
coming to the statehouse to testify
submitting letters of support to the committees where the bill is being considered: RI House Labor Committee HouseLabor@rilegislature.gov and RI Senate Labor & Gaming Committee SLegislation@rilegislature.gov
letting your local elected officials know you support the RI Opportunity for Employee Ownership Act and asking them to support it too
spreading the word to others
Thank you for your support!
Rhode Island Worker Cooperative Alliance
riworkercoop.org