Worker cooperatives are a business model where people employed in the business also receive dividends from the surplus earnings of the business, and have voting power within the business. It is a potential model for increasing wages, and instituting democratic values in the workplace. Illinois currently has two statutes on worker cooperatives, the Agricultural Co-operative Act (805 ILCS 315/1) and the Co-operative Act (805 ILCS 310/1).
This report gives an overview of what worker cooperatives are, reviews the Illinois Co-operative Act 805 ILCS 310/1, and makes recommendations for amending the Co-operative Act. Since this report focuses on worker cooperatives, it will not address the Agricultural Co-operative Act (805 ILCS 315/1) which organizes agricultural consumer cooperatives.
The Co-operative Act was amended in 2016 which modified the statute’s language to allow all types of businesses to be organized as worker cooperatives in Illinois. This was a milestone in allowing worker cooperatives to grow, especially within the service sector. Regardless, two elements from many other statutes organizing worker cooperatives are missing from the Illinois Co-operative Act.
- Inclusion of language that describes the distribution of earnings to cooperative members through patronage dividends or labor patronage
- Inclusion of more worker cooperative values in the statute language, specifically the voting system of one member, one-vote.