California Worker Cooperative Act

The California Worker Cooperative Policy Coalition introduced Assembly Bill 816 in 2015 to amend the Consumer Cooperative Corporation Law governing consumer cooperative corporations in California. As a result, California became the 12th state to legally establish a clear pathway for companies to incorporate and operate worker cooperatives under the California Worker Cooperative Act.¹ 

Worker-owned cooperatives are part of a growing movement to strengthen the local economy by empowering workers to democratically share ownership and govern the business. AB 816 affirms the importance of worker-cooperatives by stating: “A worker cooperative has the purpose of creating and maintaining sustainable jobs, and generating wealth in order to improve the quality of life of its worker-members, dignify human work, allow workers’ democratic self-management, and promote community and local development in this state.²” 

By clarifying that pre-existing Cooperative Laws apply to all cooperatives, The California Worker Cooperative Act accomplishes the following:

• Provides a legal and clear pathway for companies to incorporate and operate worker cooperatives
• Creates visibility for worker cooperatives
• Allows community members and stakeholders to invest (as opposed to donate) in worker cooperatives by raising exemptions from securities for the sale of memberships from $300 up to $1,000
• Protect worker-owners by including guidelines that outline the role of investors and how they can and cannot influence the business through votes, etc. 

Read a detailed summary of the bill prepared by the California Worker Cooperative Policy Coalition.

Policy summary sourced with materials from: Assembly Bill 816, California Worker Cooperative Policy Coalition, and The Sustainable Economies Law Center.