The year 2024 marked the inaugural year of the Washington Employee Ownership Program (WA-EOP), focusing on establishing a strong foundation for its successful launch. Key efforts included forming the Commission, developing strategic partnerships with national, state, and local organizations and collaborating with the Department of Commerce.  Open and transparent communication with the Governor’s Board of Commissioners Office was also a priority, to ensure alignment and program effectiveness. Some of the key highlights from the inaugural year include:

• Established the Washington State Office of Employee Ownership and appointed the inaugural program manager in February 2024.
• Launched the WA-EOP Commission, including drafting bylaws and onboarding procedures for new commissioners, and holding three public meetings to encourage community engagement and participation.
• Built strong relationships with key stakeholders, including state and federal agencies, as well as community partners, to foster long-term program success.
• Introduced an official email communication channel, providing businesses with direct access for support and inquiries. To date, the office has received over 100 inquiries from companies exploring employee ownership options.
• Collaborated with the Washington State Department of Revenue (DOR) to develop and implement the employee ownership tax credit, which became effective on July 1, 2024. Five newly-formed employee-owned companies have already submitted applications for the tax credit.
• Initiated an interagency data-sharing agreement with DOR to streamline communication and improve data collection, enabling measurable tracking of program results.
• Engaged with the Washington Office of the Secretary of State (OSOS) to explore integrating employee-owned companies into the existing business registration system.
• Developed and launched the program’s official website and commission portal, providing a centralized hub for resources, communication, and information.
• Conducted research to establish a baseline of companies in Washington currently operating as ESOPs, cooperatives, or trusts.
• Compiled a comprehensive list of resources, including federal and state agencies, non-profit and for-profit organizations, and community partners offering support for employee ownership entities.
• Presented and facilitated workshops with stakeholders and community partners to promote the program and its benefits.
• Began developing Washington Administrative Code (WAC) regulations for the Employee Ownership Program. The CR-101 notice was filed on October 7, 2024, and we aim to file CR-102 in early December.

In 2025, the Washington Employee Ownership Program (WA-EOP) will prioritize strengthening its foundation and expanding its impact through targeted initiatives that facilitate business transitions to employee ownership. These efforts will focus on enhancing regulatory clarity, streamlining processes, and increasing access to technical assistance for businesses exploring employee ownership models. Additionally, WA-EOP will work to build and deepen strategic partnerships with key stakeholders at the local, state and national levels. Another critical priority will be optimizing financial incentives, ensuring businesses have the necessary resources and support to successfully transition to employee ownership structures.

1. Establish clear and comprehensive regulations
To ensure the smooth implementation and long-term sustainability of the Employee Ownership Program, the WA-EOP will develop and refine regulations in alignment with state laws. This process includes:

• Drafting, reviewing, and finalizing Washington Administrative Code (WAC) provisions to provide legal clarity and program consistency.
• Defining eligibility criteria, reporting requirements, and compliance guidelines for businesses transitioning to employee ownership.
• Engaging stakeholders, legal experts, and policymakers to refine regulatory frameworks that support sustainable employee ownership structures.

2. Launch and promote the Employee Ownership Technical Assistance program
The WA-EOP will introduce a statewide technical assistance program to help businesses navigate the transition process. Key components of this initiative include:

• Tailored technical assistance: Offer one-on-one consulting, workshops, and educational resources to business owners, employees, and financial advisors.
• Targeted outreach campaign: Conduct statewide engagement efforts to raise awareness of employee ownership benefits, leveraging digital platforms, industry events, and local business networks.
• Comprehensive market study: Identify opportunities, challenges, and barriers businesses face in transitioning to employee ownership, helping to refine support strategies and program offerings.

3. Expand and Strengthen Strategic Partnerships
Collaboration is critical to scaling the impact of the Employee Ownership Program. The WA-EOP will:

• Strengthen alliances with national and statewide organizations, including employee ownership advocacy groups, financial institutions, business associations, and workforce development agencies.
• Establish cross-agency partnerships within Washington State government to align efforts and maximize available resources for businesses.
• Leverage insights and best practices from leading organizations in employee ownership to enhance technical assistance, policy development, and funding opportunities.

4. Optimize the Tax Credit Expense Reimbursement Program

Washington State has allocated $2 million annually for B&O tax credit reimbursements to incentivize business transitions to employee ownership. To maximize utilization and impact, the WA-EOP will:

• Increase awareness: Conduct outreach to educate business owners and financial professionals about eligibility and benefits.
• Provide application guidance: Assist businesses in understanding application procedures, ensuring they can access available reimbursements.
• Ensure efficient fund utilization: Currently, $500,000 in reimbursements is already in the pipeline, with continued efforts to support businesses in securing the remaining available funds.
• Monitor and optimize impact: Evaluate how businesses leverage the tax credit program and adjust strategies to ensure funds are fully utilized to facilitate successful ownership transitions.