Employee Ownership Month Quiz #5

Thanks for taking the fifth of our five Employee Ownership Month quizzes, ESOP Advocacy! Below are the correct answers to the quiz, as well as links for additional information. 

1. Which of the following bills is The ESOP Association encouraging its members to support?

Three bills currently in Congress—S. 177, H.R. 2258, and S. 4236—would benefit the ESOP community, and The ESOP Association encourages its members to ask their elected officials in Congress to sponsor these bills. For the latest word on The ESOP Association’s top legislative priorities, visit the Top Advocacy Issues page on our website.

2. Which of the following bills would provide eligible businesses with grants of up to $20,000 per employee when a company establishes a new ESOP or expands an existing ESOP?

S. 4236, Temporary Federal ESOP Grant Program Act of 2020. The ESOP Association worked closely with the office of Senator Ron Johnson (R-WI) to ensure that this bill would encourage the formation and expansion of ESOPs and benefit companies that invest in fixed assets, such as manufacturing equipment or tools, buildings, or computers. For more on this bill, see this Washington Alert, which is offered exclusively to ESOP Association members.

3.S. 177 and H.R. 2258 are nearly identical bills that share the name the Promotion and Expansion of Private Employee Ownership Act of 2019. How many members of the House and Senate currently support these bills?

At last count, more than 50 members of the House support H.R. 2258 and more than 35 members of the Senate support S. 177, as explained on our Top Advocacy Issues page. To see which members of the House and Senate currently support these bills—and which have supported ESOPs in the past but aren’t currently sponsoring this legislation—visit our ESOP Champions page, which offers an easy-to-read list broken down by state.

4. What is the best way to engage your elected officials and encourage them to support ESOPs and pro-ESOP legislation?

While all the items listed as possible answers to this question are good ways to engage with your elected officials, the most effective method is to invite them to visit your company. Doing so gives your member of the House or Senate a chance to learn about your company, meet employee owners (their constituents and potential supporters at the ballot box), and see firsthand what makes your ESOP company culture so unique.

5. How long has the ESOP community been waiting for the Department of Labor to issue guidance and regulations in areas such as determining the “adequate consideration” to be paid when an ESOP trust buys shares of a company?

Amazingly, the ESOP community has been waiting for regulations and guidance since ESOPS were codified into law in the mid-1970s under the Employee Retirement Income Security Act—more than 40 years ago! The DOL did the necessary legwork and promised to deliver these regulations decades ago—but never did. This is an enormous problem for law abiding ESOP companies that simply want to know the rules under which they should operate.

The ESOP Association has worked to bring this problem to the attention of Congress, including in a special House hearing held earlier this year. Visit our website to see the written testimony and video of that hearing, and to download a fact sheet (scroll to the bottom of the page for the link) about this issue.