During my travels this week, I heard about ESOPs a couple times. The first was at the Schaumburg Business Association Leadership Lunch where John Costello shared his journey as a business owner of Cherry's Industrial. He went from sleepless nights and the weight of the world on his shoulders to a thriving company with financial transparency, employees that share and live out core values, a common destiny and a shake in the outcome of the company.
I then read the Sunday Daily Herald Business section. This got a little more in the mud on the good and bad of Employee Ownership. ESOP plans are growing in popularity as a great way for a business owner to exit (dailyherald.com)
An ESOP can take various forms, but generally setting one up involves creating a separate entity that's owned by a company's employees, with the ownership determined based on a variety of factors from compensation to tenure to job position. They can be complicated, but below outlines some steps.
To form an Employee Stock Ownership Plan (ESOP) for a company, follow these steps:
Key Performance Indicators (KPIs) play a crucial role in the success of any business. They provide measurable and quantifiable metrics that allow organizations to assess their performance and progress towards their goals. Here are some key reasons why KPIs are important in business:
Social responsibility refers to a company's commitment to operating in an ethical and sustainable manner, taking into account the impact of its activities on society and the environment. Some of the benefits of social responsibility include:
This law goes into effect 1/1/24 so clients have time to think about how they want to implement this.
What is required: All employees in Illinois must accrue at least 1 hour of PAID SICK LEAVE for every 40 hours worked. After 90 days of employment, employees must be permitted to take their accrued paid sick leave for their own or their family’s illness.
What is not permitted: Requiring employees to find a replacement to be able to take the time off (you can request an employee help find their replacement, but not require it). Requiring proof of the illness or need for time off (you can request the reason, but not require the employee to answer or provide proof). Requiring employees to take time off in full day increments.
Employers can require “reasonable” notice. For planned time off, like appointments or procedures, this is no more than 7 days’ notice. For unplanned time off, the required notice can’t be sooner than the employee is aware of the need.
Employers can require time off be paid in 2 hour increments if the schedule time is at least 2 hours. If the scheduled work time is less than the employer can pay out only what was scheduled.
Employers can either accrue time or frontload time. If time is accrued, then employees must be permitted to rollover their unused time from year to year. However currently the requirement for pay out and accrual caps at 40 annually. So employees may be stuck rolling over unused hours indefinitely. Clarification may come on this before the launch.
If an employee leaves employment, their sick leave accrued does not need to be paid out to them (If an employer uses their vacation pay to meet the requirements of this law, then they must still pay it out as vacation pay must be paid to employees at employment termination). If an employee returns to the company within a 12 month period, their accrued sick leave picks up where it left off. The 90 day clock does not restart so a returning employee can take their time off immediately (or picks up where they left off if they worked less than 90 days).
Paid Leave for All Workers Act (illinois.gov)
In true blog fashion, the last parts are at the top of the page. Scroll all the way down and work your way back up to read them in order.
Tom is the Business Development Manager for GLM. If you are interested in learning more about GLM's services, contact him: