S. 1728 — Employee Ownership Representation Act of 2025

This section expands the Advisory Council on Employee Welfare and Pension Benefit Plans—established under ERISA (Employee Retirement Income Security Act of 1974) to advise the Secretary of Labor on administering standards for private-sector pension and welfare benefit plans—to 17 members (from 15), with not more than 10 from the same political party (from 8), and adds two representatives from employee ownership organizations. The Secretary of Labor must nominate the first two such representatives within one year of enactment.

This section establishes the Office of Employee Ownership within the Department of Labor, outside the Employee Benefits Security Administration, not later than 90 days after enactment of this Act, headed by a director appointed by the Secretary of Labor who may hire necessary staff. The director is responsible for carrying out the Employee Ownership Initiative (29 U.S.C. 3228), which promotes employee ownership by supporting state programs through federal grants authorized under that section and serving as a clearinghouse for related techniques and information.

This section establishes an Advisory Council on Employee Ownership (Council) consisting of seven members appointed by the Secretary of Labor—four representing employees, one representing companies with an employee stock ownership plan (ESOP) or eligible worker-owned cooperative, one representing ESOP providers, and one representing ESOP or worker-owned cooperative associations—with no more than four members from the same political party. Council members serve two-year terms (reappointable), with vacancies filled for the remainder of the term; a majority constitutes a quorum, and actions require a majority vote of those present. The Council advises the Secretary of Labor on functions under this Act, submits recommendations, meets at least four times annually (or as requested), and submits an annual report; the Secretary provides an executive secretary, services, and interagency support as needed. Council members receive daily compensation equivalent to level IV of the Executive Schedule and travel expenses under 5 U.S.C. 5703. This section exempts the Council from the termination provisions of 5 U.S.C. 1013 (i.e., the two-year automatic termination requirement, charter filing, and renewal process applicable to most federal advisory committees under the Federal Advisory Committee Act).

This section establishes an Advocate for Employee Ownership within the Department of Labor's Employee Ownership Initiative (established under SECURE 2.0). The Advocate, appointed without regard to competitive service or Senior Executive Service requirements and compensated at Executive Schedule level V pay, must (1) consult with the Initiative head, (2) act as liaison among the Department of Labor, employee ownership advocates, employers, workers, ESOP sponsors and participants, and other stakeholders, (3) provide public education and assistance to expand employee ownership including via employee stock ownership plans (ESOPs, i.e., qualified retirement plans under ERISA and the Internal Revenue Code that invest primarily in employer securities), (4) assist in resolving disputes between the Department of Labor and ESOP sponsors, fiduciaries, or participants, (5) recommend legislative and administrative changes to promote employee ownership including access to capital, and (6) coordinate outreach with other federal agencies (e.g., Small Business Administration, Treasury, Commerce) and state and local governments. The Secretary of Labor must solicit the Advocate's input on ESOP-related regulations or interpretations, and beginning the year after enactment, the Advocate must submit annual reports to the Senate HELP and House Education and Workforce Committees (and concurrently to the Secretary) detailing assistance requests, activities and effectiveness, identified problems and mitigations, recommendations to incentivize employee ownership, and U.S. progress on employee ownership, with reports made publicly available. This section authorizes appropriations for the Advocate's compensation and makes a conforming change to ERISA's table of contents.