---
kind: "section"
citation: "29 U.S.C. § 3228"
title: "29"
title_heading: "Labor"
number: "3228"
heading: "Worker ownership, readiness, and knowledge"
release: "119-102"
url: "https://uscodex.org/usc/29/3228"
units:
  - "Chapter 32 — Workforce Innovation and Opportunity"
  - "Subchapter I — Workforce Development Activities"
  - "Part D — National Programs"
---

# §3228. Worker ownership, readiness, and knowledge

- (a) **Definitions—** In this section:
  - (1) **Existing program—** The term “existing program” means a program, designed to promote employee ownership, that exists on the date on which the [Secretary](#a-4) is carrying out a responsibility authorized under this section.
  - (2) **Initiative—** The term “Initiative” means the Employee Ownership Initiative established under [subsection (b)](#b).
  - (3) **New program—** The term “new program” means a program, designed to promote employee ownership, that does not exist on the date on which the [Secretary](#a-4) is carrying out a responsibility authorized under this section.
  - (4) **Secretary—** The term “Secretary” means the Secretary of Labor.
  - (5) **State—** The term “[State](/usc/29/3102.md?p=56)” has the meaning given the term under [section 3102 of this title](/usc/29/3102.md).
- (b) **Employee Ownership Initiative—**
  - (1) **Establishment—** The [Secretary](#a-4) shall establish within the Department of Labor an Employee Ownership [Initiative](#a-2) to promote employee ownership.
  - (2) **Functions—** In carrying out the [Initiative](#a-2), the [Secretary](#a-4) shall—
    - (A) support within the [States](/usc/29/3102.md?p=56) [existing programs](#a-1) designed to promote employee ownership; and
    - (B) facilitate within the [States](/usc/29/3102.md?p=56) the formation of [new programs](#a-3) designed to promote employee ownership.
  - (3) **Duties—** To carry out the functions enumerated in [paragraph (2)](#b-2), the [Secretary](#a-4) shall support [new programs](#a-3) and [existing programs](#a-1) by—
    - (A) making Federal grants authorized under [subsection (d)](#d); and
    - (B)
      - (i) acting as a clearinghouse on techniques employed by [new programs](#a-3) and [existing programs](#a-1) within the [States](/usc/29/3102.md?p=56), and disseminating information relating to those techniques to the programs; or
      - (ii) funding projects for information gathering on those techniques, and dissemination of that information to the programs, by groups outside the Department of Labor.
  - (4) **Consultation with Treasury—** The [Secretary](#a-4) shall consult with the [Secretary](#a-4) of the Treasury, or the [Secretary](#a-4)’s delegate, in the case of any employee ownership arrangements or structures the administration and enforcement of which are within the jurisdiction of the Department of the Treasury.
- (c) **Programs regarding employee ownership—**
  - (1) **Establishment of program—** Not later than 180 days after December 29, 2022, the [Secretary](#a-4) shall establish a program to encourage [new programs](#a-3) and [existing programs](#a-1) within the [States](/usc/29/3102.md?p=56) to foster employee ownership throughout the United States.
  - (2) **Purpose of program—** The purpose of the program established under [paragraph (1)](#c-1) is to encourage new and [existing programs](#a-1) within the [States](/usc/29/3102.md?p=56) that focus on—
    - (A) providing education and outreach to inform employees and employers about the possibilities and benefits of employee ownership and business ownership succession planning, including providing information about financial education, employee teams, open-book management, and other tools that enable employees to share ideas and information about how their businesses can succeed;
    - (B) providing technical assistance to assist employee efforts to become business owners, to enable employers and employees to explore and assess the feasibility of transferring full or partial ownership to employees, and to encourage employees and employers to start new employee-owned businesses;
    - (C) training employees and employers with respect to methods of employee participation in open-book management, work teams, committees, and other approaches for seeking greater employee input; and
    - (D) training other entities to apply for funding under this subsection, to establish [new programs](#a-3), and to carry out program activities.
  - (3) **Program details—** The [Secretary](#a-4) may include, in the program established under [paragraph (1)](#c-1), provisions that—
    - (A) in the case of activities described in [paragraph (2)(A)](#c-2-A)—
      - (i) target key groups, such as retiring business owners, senior managers, labor organizations, trade associations, community organizations, and economic development organizations;
      - (ii) encourage cooperation in the organization of workshops and conferences; and
      - (iii) prepare and distribute materials concerning employee ownership, and business ownership succession planning;
    - (B) in the case of activities described in [paragraph (2)(B)](#c-2-B)—
      - (i) provide preliminary technical assistance to employee groups, managers, and retiring owners exploring the possibility of employee ownership;
      - (ii) provide for the performance of preliminary feasibility assessments;
      - (iii) assist in the funding of objective third-party feasibility studies and preliminary business valuations, and in selecting and monitoring professionals qualified to conduct such studies; and
      - (iv) provide a data bank to help employees find legal, financial, and technical advice in connection with business ownership;
    - (C) in the case of activities described in [paragraph (2)(C)](#c-2-C)—
      - (i) provide for courses on employee participation; and
      - (ii) provide for the development and fostering of networks of employee-owned companies to spread the use of successful participation techniques; and
    - (D) in the case of training described in [paragraph (2)(D)](#c-2-D)—
      - (i) provide for visits to [existing programs](#a-1) by staff from [new programs](#a-3) receiving funding under this section; and
      - (ii) provide materials to be used for such training.
  - (4) **Guidance—** The [Secretary](#a-4) shall issue formal guidance, for—
    - (A) recipients of grants awarded under [subsection (d)](#d) and [one-stop partners](/usc/29/3102.md?p=42) (as defined in [section 3102 of this title](/usc/29/3102.md)) affiliated with the [workforce development systems](/usc/29/3102.md?p=67) (as so defined) of the [States](/usc/29/3102.md?p=56), proposing that programs and other activities funded under this section be—
      - (i) proactive in encouraging actions and activities that promote employee ownership of businesses; and
      - (ii) comprehensive in emphasizing both employee ownership of businesses so as to increase productivity and broaden capital ownership; and
    - (B) acceptable standards and procedures to establish good faith fair market value for shares of a business to be acquired by an employee stock ownership plan (as defined in [section 1107(d)(6) of this title](/usc/29/1107.md?p=d-6)).

    The guidance under [subparagraph (B)](#c-4-B) shall be prescribed in consultation with the [Secretary](#a-4) of the Treasury.

- (d) **Grants—**
  - (1) **In general—** In carrying out the program established under [subsection (c)](#c), the [Secretary](#a-4) may make grants for use in connection with [new programs](#a-3) and [existing programs](#a-1) within a [State](/usc/29/3102.md?p=56) for any of the following activities:
    - (A) Education and outreach as provided in [subsection (c)(2)(A)](#c-2-A).
    - (B) Technical assistance as provided in [subsection (c)(2)(B)](#c-2-B).
    - (C) Training activities for employees and employers as provided in [subsection (c)(2)(C)](#c-2-C).
    - (D) Activities facilitating cooperation among employee-owned firms.
    - (E) Training as provided in [subsection (c)(2)(D)](#c-2-D) for [new programs](#a-3) provided by participants in [existing programs](#a-1) dedicated to the objectives of this section, except that, for each fiscal year, the amount of the grants made for such training shall not exceed 10 percent of the total amount of the grants made under this section.
  - (2) **Amounts and conditions—** The [Secretary](#a-4) shall determine the amount and any conditions for a grant made under this subsection. The amount of the grant shall be subject to [paragraph (6)](#d-6), and shall reflect the capacity of the applicant for the grant.
  - (3) **Applications—** Each entity desiring a grant under this subsection shall submit an application to the [Secretary](#a-4) at such time, in such manner, and accompanied by such information as the [Secretary](#a-4) may reasonably require.
  - (4) **State applications—** Each [State](/usc/29/3102.md?p=56) may sponsor and submit an application under [paragraph (3)](#d-3) on behalf of any local entity consisting of a unit of [State](/usc/29/3102.md?p=56) or local government, [State](/usc/29/3102.md?p=56)-supported [institution of higher education](/usc/29/3102.md?p=28), or nonprofit organization, meeting the requirements of this section.
  - (5) **Applications by entities—**
    - (A) **Entity applications—** If a [State](/usc/29/3102.md?p=56) fails to support or establish a program pursuant to this section during any fiscal year, the [Secretary](#a-4) shall, in the subsequent fiscal years, allow local entities described in [paragraph (4)](#d-4) from that [State](/usc/29/3102.md?p=56) to make applications for grants under [paragraph (3)](#d-3) on their own [initiative](#a-2).
    - (B) **Application screening—** Any [State](/usc/29/3102.md?p=56) failing to support or establish a program pursuant to this section during any fiscal year may submit applications under [paragraph (3)](#d-3) in the subsequent fiscal years but may not screen applications by local entities described in [paragraph (4)](#d-4) before submitting the applications to the [Secretary](#a-4).
  - (6) **Limitations—** A recipient of a grant made under this subsection shall not receive, during a fiscal year, in the aggregate, more than the following amounts:
    - (A) For fiscal year 2025, $300,000.
    - (B) For fiscal year 2026, $330,000.
    - (C) For fiscal year 2027, $363,000.
    - (D) For fiscal year 2028, $399,300.
    - (E) For fiscal year 2029, $439,200.
  - (7) **Annual report—** For each year, each recipient of a grant under this subsection shall submit to the [Secretary](#a-4) a report describing how grant [funds](/usc/29/1301.md?p=a-5) allocated pursuant to this subsection were expended during the 12-month period preceding the date of the submission of the report.
- (e) **Evaluations—** The [Secretary](#a-4) is authorized to reserve not more than 10 percent of the [funds](/usc/29/1301.md?p=a-5) appropriated for a fiscal year to carry out this section, for the purposes of conducting evaluations of the grant programs identified in [subsection (d)](#d) and to provide related technical assistance.
- (f) **Reporting—** Not later than the expiration of the 36-month period following December 29, 2022, the [Secretary](#a-4) shall prepare and submit to Congress a report—
  - (1) on progress related to employee ownership in businesses in the United States; and
  - (2) containing an analysis of critical costs and benefits of activities carried out under this section.
- (g) **Authorizations of appropriations—**
  - (1) **In general—** There are authorized to be appropriated for the purpose of making grants pursuant to [subsection (d)](#d) the following:
    - (A) For fiscal year 2025, $4,000,000.
    - (B) For fiscal year 2026, $7,000,000.
    - (C) For fiscal year 2027, $10,000,000.
    - (D) For fiscal year 2028, $13,000,000.
    - (E) For fiscal year 2029, $16,000,000.
  - (2) **Administrative expenses—** There are authorized to be appropriated for the purpose of funding the administrative expenses related to the [Initiative](#a-2)—
    - (A) for fiscal year 2024, $200,000, and
    - (B) for each of fiscal years 2025 through 2029, an amount not in excess of the lesser of—
      - (i) $350,000; or
      - (ii) 5.0 percent of the maximum amount available under [paragraph (1)](#g-1) for that fiscal year.

## Source credit

(Pub. L. 117–328, div. T, title III, § 346, Dec. 29, 2022, 136 Stat. 5381.)

## Notes

### Editorial Notes

### Codification

Section was enacted as part of the SECURE 2.0 Act of 2022, and also as part of the Consolidated Appropriations Act, 2023, and not as part of title I of the Workforce Innovation and Opportunity Act which comprises this subchapter.