U.S. Reps. Mike Kelly (R-PA) and Jimmy Panetta (D-CA) introduced legislation that seeks to promote employee ownership through private Employee Stock Ownership Plans (ESOPs).
The Promotion and Expansion of Private Employee Ownership Act of 2025 would encourage S corporation business owners to form an ESOP, especially when looking to transition ownership.
Additionally, the bill would provide needed technical assistance for companies that may be interested in forming an ESOP and ensure small businesses that become ESOP-owned retain their SBA certification. Further, the legislation would create an Advocate for Employee Ownership at the U.S. Department of Labor.
“By expanding Employee Stock Ownership Plans (ESOPs), we can put more hardworking Americans on the path to financial prosperity and a secure retirement,” Kelly, chairman of the Ways and Means Subcommittee on Tax, said. “This bipartisan, bicameral plan is a win-win for workers and businesses: it allows businesses to include employee ownership in the compensation package, and ESOPs often retain more employees as a result. This is great legislation for both the employer and employee alike.”
Along with Kelly and Panetta, the bill was cosponsored by Reps. Ron Estes (R-KS), Brad Schneider (D-IL), Carol Miller (R-WV), Danny Davis (D-IL), Blake Moore (R-UT) and Terri Sewell (D-AL).
“Too many hardworking Americans are approaching retirement without financial security and peace of mind,” Panetta said. “By helping businesses become employee-owned through their retirement plans, this bipartisan bill would give workers a stake in their company and a stronger path to build savings. When employees have ownership, businesses do better, communities grow stronger, and our economy becomes more resilient.”
The bill is backed by the Employee-Owned S Corporations of America (ESCA).
“Employee Stock Ownership Plans (ESOPs) empower hardworking Americans to achieve financial prosperity and secure their retirement while helping their companies grow and thrive,” Stephanie Silverman, president and CEO of ESCA, said. “With job stability and economic growth a top priority for all workers, creating additional employee ownership opportunities is one way Congress can help more Americans retire with confidence and weather economic uncertainty.”