Governor Brown Signs California Worker Cooperative

Governor Brown announced today that he signed a bill into law to facilitate the creation of worker-owned cooperative businesses in California. The new law, Assembly Bill 816, will remove unnecessary barriers to the creation of new worker cooperatives in California and improve operations for some existing worker cooperatives.

“Worker owned businesses are central to a full economic recovery and to closing the income inequality gap,” explained State Assemblymember Bonta, who introduced the bill. “As low-income communities continue to struggle with the dual problems of high rates of unemployment and low-wages, worker-owned, worker-managed small businesses have emerged as an effective way to rebuild the local economy and address economic inequality.”

The law is the result of a multi-year effort on the part of a coalition called the California Worker Cooperative Policy Coalition, which includes representation from the Sustainable Economies Law Center, the East Bay Community Law Center, the US Federation of Worker Cooperatives, the Democracy at Work Institute, the Network of Bay Area Worker Cooperatives, the Arizmendi Association of Cooperatives, and several individual members and supporters of cooperatives.AB 816 is the latest example of a growing movement to strengthen local economies through the creation of small businesses that are democratically owned and operated by their workers.

Specifically, AB 816 establishes a worker cooperative corporate entity, a statutory definition of a “worker cooperative”, and eases barriers to raising investment capital from within the local community. AB 816 mandates that a worker cooperative have a class of worker-members, and that the worker-members control the cooperative.