labor lawAdivision of labor law center

The U.S. Department of Labor just released  a final rule that improves financial reporting, providing union members with more complete information regarding union trusts.

 

The unstated subtext here is that some union trusts have been mismanaged, allowing unethical union leaders to strip funds, while concealing their actions from rank and file members.

 

The new union trust reporting rule, which goes into effect on January 1, 2009, requires unions  to annually file Form T-1.  The rule is issued under the authority of the Labor-Management Reporting and Disclosure Act of 1959 or LMRDA. One of the goals of the LMRDA is to provide meaningful information about union financias and expenditures.

 

According to the U.S. Department of Labor, not all labor unions are required to file the T-1 report under the new 2009 rules. Labor unions with total annual receipts of $250,000 or more that have a labor union trust must the report. These are the labor unions that are currently required to file a “Form LM-2” labor union annual financial report. 

 

For an organization or fund to be a labor union’s trust, the organization or fund must meet several conditions:

It must be established by the labor union or have a governing body that includes at least one member appointed or selected by the labor union. 

IA primary purpose of the trust must be to provide benefits to the members of the labor union or their beneficiaries. 

 

“This final rule builds on the administration’s commitment to transparency and accountability for corporations, pension funds and labor unions. Union members expect access to relevant and useful information in order to make fundamental investment, career and retirement decisions, evaluate options and exercise legally guaranteed rights,” said Don Todd, deputy assistant secretary for labor-management programs.

 

Deputy Todd added, “With meaningful disclosure, the department hopes to deter potential misuse of union trusts that have occurred in the past and allow union members to know exactly where their hard-earned dollars are being spent.”

 

According to unnamed officials at the federal Office of Labor Management Standards or OLMS, union trusts are established and maintained primarily to provide benefits to union members and their beneficiaries. Common examples of union trusts include credit unions, strike funds, redevelopment or investment groups, training funds, apprenticeship programs, building funds and educational funds.

 

Read more about this new 2009 regulation at  www.unionreports.gov .

 

 

 

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