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Overview and Revised Filing Rules
The Office of Labor-Management Standards (OLMS) of the U.S. Department of Labor's Employment Standards Administration administers and enforces most provisions of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). The LMRDA was enacted primarily to ensure basic standards of democracy and fiscal responsibility in labor organizations representing employees in private industry.
When enacting the LMRDA, Congress also required information
about labor unions, their officers and employees, employers, labor relations
consultants, and surety companies. Each union subject to the LMRDA is required
to file an initial information report (Form LM-1) and copies of their
constitution and bylaws. In addition, unions must file annual financial reports
(Form LM-2, LM-3, or LM-4) with OLMS each year.
The LM-2 is the report, which Local Union will be concerned
with when dealing with finances.
On July 1, 2004 the Department of Labor Final Rule on Union
Financial Disclosure went into effect. The Rule substantially revises the LM-2
form and dramatically increases the level of financial detail required in the
report. The following is a brief overview of changes in filing rules when
preparing the LM-2 Report.
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Filing Threshold: The filing threshold has
increased from 200,000 to 250,000.
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Cash Receipts: Cash receipts identified as “other
receipts” which total more than $5,000 either as a single receipt or aggregate
to $5,000 from a single entity, must now be identified separately when compiling
the data necessary to complete identified Schedule 14.
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Categorization and Itemization: Newly created
schedules to the LM-2 will require a functional breakdown of Union
disbursements.
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Initial Itemization Pages: Schedules 15-19 will
require “major” distributions to be identified through completion of a
separate Initial Itemization Page for each of these areas:
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Representational Activities (Schedule 15)
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Political Activities and Lobbying (Schedule 16)
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Contributions, Gifts and Grants (Schedule 17)
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General Overhead (Schedule 18)
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Union Administration (Schedule 19)
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Employees and Officers Good-Faith Estimates of Time:
The new LM-2 requires a categorical breakdown of disbursements to officers
and employees that will be distributed to Schedules 15-19. The rules require
officers and employees earning more than $10,000 a year to estimate the
percentage of time spent performing services related to the functional
categories described above. (Ex: Representational Activities).
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Credit Card or Direct Billing Expenses: Credit Card
Expenses or Direct billing arrangements not distributed to the Employee
Expenses Analysis Journal and LM-2 Schedules 11 and 12 will now be identified
to the actual vendor, not the credit card company or travel agency and listed
in the appropriate functional category (Schedules 15-19).
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Related Trust: Unions are now required to file a
newly created “T-1” form for any trust with annual receipts over $250,000 and
to which the Union has contributed $10,000 or more. (Ex: Joint Funds with an
Employer pursuant to a CBA; Training Institutes; Credit Unions; etc.).
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Membership: The new Schedule 13 requires Unions to
break down membership numbers into “categories of membership”. Unions are to
report this information in whatever categories the Union uses to track
membership in the normal course of business. Schedule 13 expressly
requires Unions to report the number of “Agency Fee Payers” and state whether
these “Agency Fee Payers” are allowed to vote in Union elections.
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Aging Accounts: A new “Accounts Receivable Aging
Schedule and “Accounts Payable Aging Schedule” are to be used to report
accounts receivable and payable of more than $5,000 that are more than 90 days
past due, were liquidated, reduced or written off. The aggregate of all other
accounts 90 days past due, liquidated, reduced or written off must also be
listed.
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Investments: The Schedule Reporting “investments
Other Than U.S. securities” has been revised to now require disclosure of
individual marketable securities and other investments that have a threshold
of $5,000 and exceed the total book value of all marketable securities or
other investments. This is a change from the current $1,000/20 percent
threshold.
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Strike Benefits: The new LM-2 requires reporting
disbursements to members related to strike benefits, including recognitional
strikes, work stoppages and lockouts.
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Electronic Filing: All LM-2 Filers are required to
submit forms to the DOL electronically (via internet) unless a “Hardship
Exception is granted. ·
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Digital Signatures: Electronic filing requires the
use of digital signatures. Please visit:
www.dol.gov/esa/regs/compliance/olms/digital signatures.htm to view
frequently asked questions on this topic and find a links to the sign up for
digital signatures and Digital signatures plug-in sites.
The International Union has prepared a NOTICE with
explanations and recommendations regarding the revised LM-2 reporting
requirements. In addition, seminars have been conducted to explain the revised
rules and specifically how they affect IBT affiliates.
Any questions regarding this information should be directed
to the Office of the General
Secretary-Treasurer.
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