AN ACT RELATING TO LABOR AND LABOR RELATIONS -- THE RHODE ISLAND OPPORTUNITY FOR EMPLOYEE OWNERSHIP ACT

HB 5940 requires owners of qualifying Rhode Island businesses to notify all employees in writing within seven days if they plan to sell the business (or at least 51% of it), giving employees a 30-day exclusive window to form a group and purchase it as an employee-owned business. It applies to private Rhode Island businesses with at least three workers that meet small business size standards and operate locally for over a year. Key provisions include mandating owner transparency (sharing financial records), ensuring existing labor agreements continue post-sale, and offering owners a capital gains tax exemption on sales under $1 million. The bill aims to facilitate worker ownership transitions while protecting democratic governance within the new employee-owned entity.