Home » Policies for the People

California Worker Cooperative Act

Policy Details

Policy Type: Policy
Jurisdiction: State — California
Status: Passed
Tags: Climate Finance, Democratization, JEDI, Labor/Workforce

Policy Summary

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 816California Worker Cooperative Policy Coalition, and The Sustainable Economies Law Center.

Related Policies (by Tags)

Help us expand Policies for the People

Share policies that you think would be a good addition to this tool and our team will review them for inclusion in future updates.