What's a worker co-op?

There are many kinds of cooperatives, such as credit unions and co-op markets. But unlike other consumer-owned cooperatives, a worker cooperative is a business owned by the people doing the work.

A worker cooperative (or co-op) is a type of business that puts worker wellbeing and community benefit at the core of its purpose.

Workers own the business and determine how it is run, based on the principle of one person, one vote. The worker-owners typically earn dividends each year based on the amount of labor they contribute to the co-op.

Worker co-ops can be managed collectively or by an elected board of directors. The worker-owners are able to direct everyday operations through many different management structures.

Worker co-ops can employ non-owners, but employees are offered membership after a reasonable trial period.

Conversions

Many worker co-ops start out as traditional businesses, but convert when their original owners decide to retire. There are a number of reasons to go this route:

Tax benefits

Employers who sell their business to their employees can benefit from significant tax incentives.

Continuing the legacy

Small businesses that sell to larger corporations are usually gutted or shut down, bringing the legacy of a local business to an unfortunate end. Converting to worker ownership ensures that the legacy lives on.

Supporting communities

Keeping businesses owned by locals builds a more robust economy that is circular and sustainable, rather than extractive and exploitative.

Want to learn more about worker co-op conversions? See these resources from the Democracy at Work Institute.

Worker Co-ops in Rhode Island

Since Rhode Island's Worker Cooperative incorporation bill was passed in 2017, a community of co-ops have sprung up all over the Ocean State. They operate in several industries, including cleaning services, printing/marketing, and restaurants.