Worker-Ownership Explained
What is a worker-owned business?
A business owned and controlled by its workers on a democratic basis.
Worker-ownership is flexible and has variations, from employee stock ownership plans (ESOPs) to worker co-ops. Worker-ownership is also known as employee ownership.
In the worker co-op model, workers have the option of becoming worker-owners. Each worker-owner has a vote in key decisions affecting the business.
Like any other business, a worker-owned business is for-profit. However, the worker-owned model tends to balance individual and community needs. It also broadens wealth.
What are the advantages of worker-ownership?
Research has shown worker, company, and community benefits, including higher wages and greater stability.
Worker-owners
Share in profits
Have a voice in key decisions
Access relationship- and skill-building opportunities
Achieve greater business stability and community impact
Increase equity across race, class, and gender
How do you become a worker-owner?
Typically there is a work requirement, such as working for the business for a certain amount of time.
Typically there is also a membership share requirement. Each worker-owner buys a membership share at a price set by a worker co-op.
There may be other requirements, such as attending meetings.
Although workers are generally encouraged to become worker-owners in worker-owned businesses, they are not obligated to.
What does worker-ownership entail?
Share in profits and risks
For example, a portion of profits may be allocated to the worker-owners based on their contributions.
Participate in decision-making structures
For example, worker-owners may elect a Board of Directors or vote on a business expansion.
Examples of Worker Co-ops in the U.S.
Equal Exchange, which distributes organic coffee, tea, sugar, bananas, cocoa, and chocolate produced by farmer cooperatives from around the world.
Union Cab Cooperative, which operates a taxi fleet in Madison, Wisconsin.
Read more about worker co-ops on the US Federation of Worker Cooperatives website.
Worker-owners celebrating with Ellen Vera, our director of development and co-op organizing, after their business officially becomes worker-owned.
