Worker Cooperatives Take Center Stage in Economic Recovery Bill (AB 2849)

On September 29, 2022, Governor Newsom signed Assembly Bill 2849—the Promote Ownership by Workers for Economic Recovery Act—into law. 

The Act is the most substantial step toward promoting worker-owned businesses in California since the California Worker Cooperative Act of 2016, which established a new kind of business entity specifically for worker cooperatives. The Act establishes a panel with the purpose of studying the economic impact of worker-owned businesses and how State policy can promote their growth. The panel will serve under the authority of the already-existing Labor and Workforce Development Agency. 

The panel will consist of the Secretary of the Labor and Workforce Development Agency or a director of a subsidiary department thereof appointed by the Secretary, the Director of the Governor’s Office of Business and Economic Development, an appointee of the Speaker of the Assembly, an appointee of the President Pro Tempore of the Senate, and a representative from the Future of Work Commission selected by the Governor.

The panel is responsible for establishing an Association of Cooperative Labor Contractors, whose members will have a right to organize, participate in labor organizations, and have jobs with minimum labor standards. Accordingly, the Act envisions closer ties between the workers cooperative movement and the labor movement at large.

For more information about this new law or others, please contact your labor law counsel.