California AB 816, the California Worker Cooperative Act, is a 2015 California law (Chapter 192, Statutes of 2015) that renamed the state's consumer-cooperative statute the Cooperative Corporation Law and created a legal framework for worker cooperatives.
Signed by Governor Jerry Brown on August 12, 2015 and effective January 1, 2016, the act defines a 📝Worker Cooperative as a corporation that includes a class of 📝Worker-Members, natural persons whose patronage consists of labor contributed to or other work performed for the corporation (Corporations Code §12253.5). At least 51 percent of workers must be worker-members or candidates for membership, and a worker cooperative may make 📝Patronage Dividend distributions only to the worker-member class (§12420).
For outside capital, the act permits 📝Community Investor Shares held by non-worker members, whose voting power is limited to approval rights over a merger, sale of major assets, reorganization, or dissolution (§12253). It raised the securities-registration exemption for membership sales from $300 to $1,000 (§25100), let collective-board cooperatives dispense with a separate annual meeting of worker-members (§12460.5), and allowed worker cooperatives to hold indivisible reserves that are never distributed to members and pass to a cooperative-support organization if the cooperative dissolves (§12454.5).
The California Worker Cooperative Policy Coalition, which drafted the bill's June 2015 fact sheet, described it as "aimed at supporting existing worker cooperatives and promoting the establishment of new worker cooperatives," and pointed to Italy, Spain, France, and Quebec, where indivisible reserves strengthen cooperative movements. The 📝Key Changes to the Law summarize its practical effect. This memo reflects the enacted text as of 2026 and is general information, not legal advice.