Q. What is the effective date for the Form LM-2?
A. The Form LM-2 became effective on July 1, 2004, and will apply only to annual financial reports filed by unions for fiscal years beginning on or after the effective date.
Q. Who must file the Form LM-2?
A. For fiscal years beginning on or after July 1, 2004, each labor organization subject to the Labor-Management Reporting and Disclosure Act, as amended (LMRDA), the Civil Service Reform Act (CSRA), or the Foreign Service Act (FSA) which had total annual receipts of $250,000 or more must file the revised Form LM-2 with the Office of Labor-Management Standards (OLMS) of the U.S. Department of Labor's Employment Standards Administration.
Q. What do you mean by the term "total annual receipts?"
A. The term "total annual receipts" means all financial receipts of the labor organization during its fiscal year, regardless of the source, including receipts of any special funds. Receipts of a trust in which the labor organization is interested should not be included in the total annual receipts of the labor organization when determining which form to file unless the trust is wholly owned, wholly controlled, and wholly financed by the labor organization.
Q. If my union's receipts are less than $250,000, what form do I file?
A. Labor organizations with total annual receipts of less than $250,000 for fiscal years beginning on or after July 1, 2004 may file the simplified annual report Form LM-3 if not in trusteeship. Labor organizations with total annual receipts of less than $10,000 may file the abbreviated annual report Form LM-4 if not in trusteeship.
Q. What form do I file for a union that is in trusteeship?
A. Any labor organization that has placed a subordinate labor organization in trusteeship is responsible for filing the subordinate's annual financial report which must be filed on Form LM-2.
Q. If an LM-3 filer is placed in trusteeship, every transaction will have to be redone. If records are missing, destroyed, or unavailable, what are the options for filing?
A. A union that has placed a subordinate labor organization in trusteeship should attempt to reconstruct the information needed to complete the Form LM-2 on behalf of the subordinate to the best of its ability. This may include getting records from the subordinate's bank and other entities with which it did business during the reporting year. If there is information that is unavailable despite the union's best efforts, it should be explained in Item 69.
Q. Must Form LM-2 terminal reports be filed for those smaller locals in trusteeship which normally would file Forms LM-3 or LM-4, and if so why is this still required when these locals do not meet the threshold for filing an LM-2?
A. Just as under the current rule, Form LM-2 must be filed for any union that is in trusteeship.
Q. What steps must be taken by a local, which customarily files an LM-3, but, upon being forced to sell its building in November (e.g., because of a plant closing), has generated unexpected one-time revenue in excess of $250,000? Must the local file an LM-2 for the year even though the local would not have maintained its records as an LM-2 filer - i.e, what triggers LM-2 status - the previous year's finances or a one time event during a year?
A. If a union's receipts exceed $250,000 during the reporting year, the union must file Form LM-2 regardless if it is caused by a one-time event.
Q. If a labor organization itself has under $250,000 in total annual receipts for a fiscal year beginning on or after January 1, 2004, but the receipts from a "subsidiary organization" (that meets the definition in the Form LM-3 instructions) bring its receipts to over $250,000, what form does the labor organization file?
A. The labor organization files a Form LM-2. The instructions for Form LM-3, the form used by unions with under $250,000 in total annual receipts, state that the receipts of subsidiary organizations must be included in determining which form to file, and the instructions for Form LM-2 provide that the receipts of a trust which is wholly owned, wholly controlled, and wholly financed by the labor organization must be included in determining which form to file.
Q. My union's fiscal year ends on June 30. If my union has $225,000 in total annual receipts for the fiscal year ending on June 30, 2004, can I file Form LM-3?
A. No. The increase in the threshold for filing Form LM-2 to $250,000 is only effective for fiscal years beginning on or after July 1, 2004. Because the fiscal year ending June 30, 2004 began on July 1, 2003, a Form LM-2 for that year must be filed for a union that had total annual receipts of $225,000, but the old Form LM-2 may be used.
Q. Our union has members and funds in Canada. Would we have to report the Canadian funds?
A. Affiliates located in Canada are not covered by the LMRDA. Although a non-covered affiliate may meet the definition of a trust, it is not the Department's intention to require reporting by labor organizations that are not engaged in an industry affecting commerce or otherwise subject to U.S. law. However, if an LMRDA-covered union has an interest in a trust that is located in Canada, the trust can still be a significant trust in which the union is interested.
Q. Canadian dues are paid in Canadian dollars, do we report that?
A. If a union in the U.S. covered by the LMRDA receives funds in a foreign currency, the amounts must be reported in U.S. dollars in the LMRDA reporting forms.
Q. When must the Form LM-2 be filed?
A. Form LM-2 must be filed within 90 days after the end of the labor organization's fiscal year (12-month reporting period). The law does not authorize the Department to grant an extension of time for filing reports. If the labor organization went out of existence during its fiscal year, a terminal financial report must be filed within 30 days after the date it ceased to exist, although if the union's terminal report is due prior to September, 2005, the terminal report may be filed on the old Form LM-2.
Q. Is the form and software available to file a report if the union is currently under trusteeship?
A. The Department expects labor organizations to file the Form LM-2 for fiscal years beginning on or after July 1, 2004. See 68 Fed. Reg. 58374-58358, American Federation of Labor and Congress of Indus. Organizations v. Chao, __ F. Supp. 2d __, 174 L.R.R.M. 2097, 2004 WL 101605 (D.D.C. 2004). No report is required to be filed on the revised Form LM-2 until September 28, 2005. Prior to this date, the old Form LM-2 may be used to file terminal and trusteeship reports.
Q. Will the Department accept reports filed on the Form LM-2 before March 2005?
A. Yes.
Q. Are the Forms LM-2, LM-3, and LM-4 filed by unions available to the public?
A. The LMRDA requires that the Department make labor organization financial reports available for inspection by the public. Reports for the year 2000 and after may be viewed and downloaded from the OLMS Web site at http://www.union-reports.dol.gov. Copies of reports and union constitutions and bylaws can be ordered at the same Web site. Reports may also be examined and copies purchased at the OLMS Public Disclosure Room at 200 Constitution Avenue, NW, Room N-1519, Washington, D.C., 20210; telephone: (202) 693-0125.
Q. When bylaws have been changed, in what format are they electronically filed and what happens if the labor organization is not capable of filing electronically?
A. Bylaws should be filed electronically in a pdf or word processing format. If the labor organization is incapable of filing electronically, it may apply for a continuing hardship exemption.
Q. Who is responsible for filing?
A. The president and treasurer or the corresponding principal officers of the reporting labor organization are required to sign Form LM-2 and are personally responsible for its filing and accuracy.
Q. What liability exists for violations of the reporting requirements?
A. Under the LMRDA, officers are subject to criminal penalties for willful failure to file or misrepresentation of a material fact while knowing it to be false, or for knowingly failing to disclose a material fact in a required report or in the information required to be contained in it or in any information required to be submitted with it. The reporting labor organization and the officers required to sign Form LM-2 are also subject to civil prosecution for violations of the filing requirements. Section 210 of the LMRDA (29 U.S.C. 440) provides that "whenever it shall appear that any person has violated or is about to violate any of the provisions of this title, the Secretary may bring a civil action for such relief (including injunctions) as may be appropriate." Under the CSRA and FSA and implementing regulations, false reporting and failure to report may result in administrative enforcement action and litigation. The officers responsible for signing Form LM-2 are also subject to criminal penalties for false reporting and perjury under Sections 1001 of Title 18 and 1746 of Title 28 of the United States Code.
Q. Does "just cause" allow members to look at all records or just the ones withheld?
A. The Department's position is that the failure or refusal to disclose information because it may be adverse to the organization's legitimate interests constitutes "just cause" to examine the books and records that are necessary to verify the information reported in that fashion. Whether or not a member may also be able to establish just cause to examine books and records to verify other information in the Form LM-2 will depend on all of the facts and circumstances and the Department has not taken any position on that issue.
Q. How will disputes about a member's right to review records be resolved?
A. Disputes concerning members' requests for supporting records that a union denies are resolved by a court pursuant to member litigation.
Q. What if I have questions about the revised Form LM-2?
A. Send an e-mail to olms-public@dol.gov or call the Department Of Labor's toll-free number at: 1-866-4-USA-DOL (1-866-487-2365).
