U.S. Senator Kirsten Gillibrand is scheduled to be in Rochester this afternoon to announce bipartisan legislation that would support small businesses that invest in their workers and communities by transitioning to an Employee Stock Ownership Plan or a cooperative.
Gillibrand has visited Once Again Nut Butter in Nunda last October to feedback from employees enrolled in the company’s Employee Stock Ownership Plan as she was drafting the legislation to encourage more ESOP programs around the country.
On Monday, Gillibrand will be joined by Rochester Mayor Lovely Warren at H&C Tool Supply and Hewes Fastener Corp., 235 Mount Read Blvd., Rochester.
The legislation is known as the Main Street Employee Ownership Act.
Gillibrand’s legislation would improve access to capital and technical assistance to transition small businesses to Employee Stock Ownership Plans, or ESOP.
The legislation would give the U.S. Small Business Administration new authority and tools to lead a national effort in expanding small business employee ownership. This includes updating the agency’s lending practices to better serve employee-owned businesses, facilitating SBA lending to cooperative businesses, and empower the SBA to assist small business owners in converting their companies to employee ownership.
ESOPs and cooperatives help workers share in the success of companies and reduce the risk of businesses suddenly leaving their communities, Gillibrand said in a news release.
Gillibrand, in her visit to Once Again Nut Butter, said the story of Once Again, which is 100 percent owned by its workers through the ESOP “could help push forward that legislation.”
Once Again Nut Butter, founded in 1976 as a worker cooperative by Jeremy Thaler and Constance Potter, became an ESOP in 1998 and in 2006 was 100 percent employee owned. The biggest difference between a worker co-op and an ESOP is the valuation of company stock.
In the past 7-1/2 years, Once Again has grown from 20 employees and $14.5 million in revenue to more than 70 employees and more than $50 million in sales, said Gael Orr, sales coordinator for Once Again, told Gillibrand during the senator’s visit.
Other employees told Gillibrand that they had been able to put children – or themselves – through college since coming to work at Once Again.
Studies have shown that employee-owned companies have more productive workers, better working conditions and greater shareholder returns.
“I want to impress that a company where it values its employees and invests in its employees can be more successful and accomplished,” Gillibrand said.
Companies that transition to employee ownership have seen increases in productivity of 4 to 5 percent in the year the business becomes employee-owned. Employee ownership also rewards workers, paying 5 to 12 percent more and giving workers 2.2 times more in retirement savings and greater job stability, according to a study by Citi Community Development and The Democracy Collaborative.
ESOPs are less likely than comparable businesses to lay off workers in economic downturns and employee-owned companies are less likely to go bankrupt and tend to stay in business longer, according to a report from the National Center for Employee Ownership.