New Jersey is ushering in a transformative opportunity for business owners and employees alike with the launch of the Employee Stock Ownership Plan (ESOP) Assistance Program. Effective May 5, 2025, this initiative, spearheaded by the New Jersey Economic Development Authority (NJEDA) in partnership with Rutgers University’s School of Management and Labor Relations, aims to foster employee ownership models across the state, promoting economic equity and sustainable business practices.
What Is the ESOP Assistance Program?
The ESOP Assistance Program is designed to support New Jersey businesses in exploring and implementing Employee Stock Ownership Plans. Through this program, eligible companies can receive feasibility studies and technical assistance to assess the viability of transitioning to an ESOP. The program covers 90% of the service costs, up to $35,000, making this a valuable resource for businesses considering this ownership model.NJEDAPatch+2NJEDA+2NJBIZ+2
Who Is Eligible?
To qualify for the program, businesses must:
- Employ at least 20 full-time workers.
- Be for-profit entities based in New Jersey.
- Demonstrate interest in transitioning to an ESOP.
Applications are now open and can be submitted through the NJEDA website.
Why ESOPs Matter
Employee Stock Ownership Plans offer a unique succession strategy, allowing business owners to sell their companies to their employees. This model not only ensures the continuity of the business but also empowers employees by providing them with a stake in the company’s success. Research indicates that ESOPs can lead to increased productivity, job retention, and wealth accumulation among employees.
In New Jersey, the establishment of ESOPs is seen as a strategic move to address wealth disparities, particularly among Black and Hispanic communities. The state’s Wealth Disparity Task Force, established in 2021, identified ESOPs as a means to promote economic equity and support diverse business ownership. By facilitating the transition to employee ownership, the ESOP Assistance Program aligns with these broader goals.NCEO+1NCEO+1NJEDA+4Patch+4NJEDA+4
How Rutgers Supports the Initiative
Rutgers University’s School of Management and Labor Relations plays a pivotal role in the ESOP Assistance Program. Through its Institute for the Study of Employee Ownership and Profit Sharing and the New Jersey/New York Center for Employee Ownership, Rutgers provides:Rutgers SMLR+2NJBIZ+2NJEDA+2
- Educational resources and tools to help businesses evaluate the feasibility of ESOPs.
- Technical assistance and guidance throughout the transition process.
- Outreach initiatives to raise awareness about the benefits of employee ownership.NJEDA+2NJBIZ+2Patch+2NJEDA
These efforts are part of a broader strategy to increase the number of employee-owned companies in New Jersey, thereby strengthening the state’s economy and fostering inclusive growth.
Upcoming Information Session
To assist interested businesses, Rutgers will host a free informational webinar on May 28, 2025, at 1 p.m. This session will provide an overview of the ESOP Assistance Program, eligibility criteria, and the application process. Business owners and stakeholders are encouraged to attend to learn more about how this program can benefit their organizations.
A Call to Action
The launch of the ESOP Assistance Program marks a significant step toward building a more equitable and resilient economy in New Jersey. By embracing employee ownership, businesses can not only secure their future but also contribute to the financial well-being of their employees and the broader community. If you’re a business owner considering succession planning options, now is the time to explore how an ESOP can work for you.Patch
For more information and to apply, visit the NJEDA website. Don’t miss the opportunity to be part of this transformative initiative.