New Jersey Enacts Legislation to Support Employee Ownership Transitions
News related to:NJEDA · 2 min read
TRENTON, N.J., Sept. 22, 2026 /CourierPR/ -- Governor Mikie Sherrill has signed a comprehensive piece of legislation in New Jersey that aims to facilitate the transition of businesses to employee ownership. The bipartisan package, which includes the establishment of an Employee Ownership Transition Program and a revolving loan fund at the New Jersey Economic Development Authority (NJEDA), is designed to support entrepreneurs and strengthen local communities.
The new Employee Ownership Transition Program will provide financial assistance for feasibility studies and consultative services to firms considering the transition to employee ownership. The program will also include statewide outreach efforts in partnership with the NJ/NY Center for Employee Ownership at Rutgers University. Additionally, the legislation establishes an Employee Ownership Revolving Loan Fund, which will directly finance the conversions.
The loan fund is a revival of a tool NJEDA pioneered 50 years ago, when it helped finance the employee buyout of the Okonite Company in Passaic County, New Jersey. The Okonite Company remains 100% employee-owned today, having paid more than $300 million in ESOP distributions to its workers. The fund can be capitalized through state appropriations, federal sources such as U.S. Economic Development Administration grants, and philanthropic capital.
The white paper details a toolkit for states to expand employee ownership, including credit enhancement, institutional capital mobilization, and tax incentives.
The New Jersey/New York Center for Employee Ownership, Rutgers School of Management and Labor Relations, looks forward to partnering with NJEDA to ensure that every owner considering a sale knows selling to employees is a real option. The center is optimistic about the potential of the new program to drive economic growth and improve the financial well-being of workers in the state.
The legislation was sponsored by State Senators Andrew Zwicker and Shirley Turner and Assemblymembers Lisa Swain, Roy Freiman, and Al Barlas. The bill, titled A5016/S4218, was signed into law on September 4, 2023.
The Employee Ownership Transition Program and the revolving loan fund are part of a broader strategy to support employee ownership in New Jersey. The program will provide resources and financial support to businesses looking to transition to employee ownership, helping to ensure that local companies remain in local hands and continue to contribute to the state's economy.