U.S. Department of Labor Office of Labor-Management Standards (OLMS)

1. U.S. Department of LaborOffice of Labor-Management Standards(OLMS) Revised Form LM-2

2. The OLMS Mission Administer the Labor-Management Reporting and Disclosure Act (LMRDA) • Union Democracy • Safeguard Union Assets • Financial Recordkeeping and Reporting

3. Labor Organization Financial Reports • Required by LMRDA Title II • Public Disclosure • - The Internet • Deadlines • - 90 days after fiscal year • - 30 days after termination

4. Changes in Labor Organization Financial Reporting • On December 27, 2002, the Department of Labor published a proposal to revise the forms used by labor organizations to file annual financial reports. • Over 35,000 comments were received about the proposal. • On October 9, 2003, a Final Rule implementing changes to Form LM-2 was published. • No changes were made to Form LM-3 and LM-4.

5. Effective Date of Final Rule • The revised Form LM-2 became effective on July 1, 2004, but applies only to annual financial reports filed by unions for fiscal years beginning on or after the effective date. • The earliest date that the revised Form LM-2 must be filed is September 2005.

6. Change in Filing Threshold • The threshold for filing a Form LM-2 has been increased to $250,000 in total annual receipts. • Do not include receipts of a trust in calculating total annual receipts unless the trust is wholly owned, wholly controlled, and wholly financed by the labor organization.

7. Electronic Filing • The revised Form LM-2 must be filed electronically unless a hardship exemption is obtained from the Department.

8. Temporary Hardship Exemption • If a labor organization experiences unanticipated technical difficulties that prevent the timely submission of the electronic Form LM-2, the organization may file Form LM-2 in paper format by the required due date. • An electronic copy of the report must be filed within 10 business days after the required due date of the report.

9. Continuing Hardship Exemption • A labor organization may apply in writing for a continuing hardship exemption if Form LM-2 cannot be filed electronically without undue burden or expense. • OLMS must receive the written application at least thirty days prior to the required due date of the report. • A continuing hardship exemption can be granted for up to one year.

10. For More Information About Hardship Exemptions Contact OLMS: • Telephone: 202-693-0123 • FAX: 202-693-1340 • Email: olms-public@dol.gov

11. Form T-1 • On May 31, 2005, the U.S. Court of Appeals for the District of Columbia Circuit upheld the Final Rule, promulgated under the Labor-Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. §§ 431-441, that revised the reporting form used by the largest labor organizations – the Form LM-2. AFL-CIO v. Secretary of Labor, No. 04-5057 (D.C. Cir. May 31, 2005). • The Court, however, rejected the Department’s promulgation of the Form T-1, which required unions to report on certain trusts in which they had an interest, and vacated the provisions of the Final Rule relating to the Form T-1. Under the Court's rules, the Department has 45 days from the date of the decision, until July 15, in which to seek rehearing or rehearing en banc of the Court's decision, or if rehearing is not sought, 90 days from the date of the decision, until August 30, in which to file a petition for certiorari with the Supreme Court.

12. Overview of Changes to Form LM-2Clarification of Coverage The Final Rule adopts language clarifying that any "conference, general committee, joint or system board, or joint council" that is subordinate to a covered national or international labor organization is itself a labor organization within the meaning of section 3(j) of the LMRDA and therefore is required to file an annual financial report.

13. Overview of Changes to Form LM-2Recordkeeping The officers required to file Form LM-2 are responsible for maintaining records that will provide in sufficient detail the information and data necessary to verify the accuracy and completeness of the report. This now includes any electronic documents, including recordkeeping software, used to complete, read, and file the report.

14. Overview of Changes to Form LM-2Receipts and Disbursements • Certain categories of receipts and disbursements of $5,000 or more must be individually identified and reported on Form LM-2. • Several disbursement categories from Statement B of the old Form LM-2 were eliminated, including Office & Administrative Expense, Education & Publicity Expense, Professional Fees, and Other Disbursements. • Several new disbursement categories were created for Statement B of Form LM-2, including Representational Activities, Political Activities and Lobbying, General Overhead, Union Administration, and Strike Benefits.

15. Overview ofChanges to Form LM-2Receipts and Disbursements (cont.) • New schedules have been added for accounts receivable, accounts payable, membership status, representational activities, political activities and lobbying, general overhead, and union administration. • Form LM-2 filers must make a good faith estimate to the nearest 10% of the proportion of each officer's and employee's time spent in each of five categories on the Form LM-2 (Representational Activities; Political Activities and Lobbying; Contributions, Gifts and Grants; General Overhead; and Union Administration) and report that percentage of gross salary in the relevant schedule.

16. Information Items 1—21 Item 21. Dues and Fees – A separate line has been added for “working” dues which previously were required to be reported on the same line as regular dues.

17. Schedule 1 – Accounts Receivable Aging Schedule This is a new schedule. The labor organization must report: • all accounts receivable with an entity or individual that aggregate to a value of $5,000 or more and that are more than 90 days past due at the end of the reporting period or were liquidated, reduced or written off during the reporting period; and • the total aggregated value of all other accounts receivable.

18. How to Complete Schedule 1 • In Column (A) enter the name of the entity or individual with which the labor organization has an account receivable of $5,000 or more that is 90 days or more past due or was liquidated, reduced, or written off during the reporting period. • In Column (B) enter the total amount of money owed to the labor organization by the entity or individual at the end of the reporting period.

19. How to Complete Schedule 1 (cont.) • In Column (C) enter the total amount of money owed to the labor organization by the entity or individual at the end of the reporting period that was 90 to 180 days past due. • In Column (D) enter the total amount of money owed to the labor organization by the entity or individual at the end of the reporting period that was more than 180 days past due.

20. How to Complete Schedule 1 (cont.) • In Column (E) enter the total amount of money owed to the labor organization by the entity or individual that was liquidated, reduced, or written off during the reporting period. • On Line 27 report the totals for all other accounts receivable of the labor organization.

21. Schedule 2 – Loans Receivable This was Schedule 1 on the old Form LM-2. It has been renumbered but the information required to be reported is the same.

22. Schedule 3 – Sale of Investments and Fixed Assets This was Schedule 6 on the old Form LM-2. It has been renumbered, but the only change is to require a street address for land or buildings, if appropriate.

23. Schedule 4 – Purchase of Investments and Fixed Assets This was Schedule 7 on the old Form LM-2. It has been renumbered but the only change is to require a street address for land or buildings, if appropriate.

24. Schedule 5 – Investments Other Than U.S. Treasury Securities This was Schedule 2 on the old Form LM-2. Several changes have been made.

25. Schedule 5 – Investments Other Than U.S. Treasury Securities (cont.) Line 3 now requires the itemization of each marketable security which has a book value over $5,000 and exceeds 5% of the total book value of all the labor organization’s marketable securities. (These thresholds were previously $1,000 and 20%.)

26. Schedule 5 – Investments Other Than U.S. Treasury Securities (cont.) Line 6 now requires: • The itemization of each other investment which has a book value over $5,000 and exceeds 5% of the total book value of all the labor organization’s other investments. (These thresholds were previously $1,000 and 20%.) • The itemization of all trusts in which the labor organization is interested that are investments of the labor organization (such as real estate trusts, building corporations, etc.)

27. Schedule 6 – Fixed Assets This was Schedule 5 on the old Form LM-2. It has been renumbered and the instructions have been clarified, but the information required to be reported is the same.

28. Schedule 7 – Other Assets This was Schedule 3 on the old Form LM-2. It has been renumbered but the only change is the requirement for the labor organization to report the value of any ownership interest of a non-investment nature that it has in a trust in which it is interested (such as a training fund).

29. Schedule 8 – Accounts Payable Aging Schedule This is a new schedule. The labor organization must report: • all accounts payable with an entity or individual that aggregate to a value of $5,000 or more and that are more than 90 days past due at the end of the reporting period or were liquidated, reduced or written off during the reporting period; and • the total aggregated value of all other accounts payable.

30. How to Complete Schedule 8 • In Column (A) enter the name of the entity or individual with which the labor organization has an account payable of $5,000 or more that is 90 days or more past due or was liquidated, reduced, or written off during the reporting period. • In Column (B) enter the total amount of money owed by the labor organization to the entity or individual at the end of the reporting period. • In Column (C) enter the total amount of money owed by the labor organization to the entity or individual at the end of the reporting period that was 90 to 180 days past due.

31. How to Complete Schedule 8 (cont.) • In Column (D) enter the total amount of money owed by the labor organization to the entity or individual at the end of the reporting period that was more than 180 days past due. • In Column (E) enter the total amount of money owed by the labor organization to the entity or individual that was liquidated, reduced, or written off during the reporting period. • On Line 27 report the totals for all other accounts payable of the labor organization.

32. Schedule 9 – Loans Payable This was Schedule 8 on the old Form LM-2. It has been renumbered but the information required to be reported is the same.

33. Schedule 10 – Other Liabilities This was Schedule 4 on the old Form LM-2. It has been renumbered and the instructions have been clarified, but the information required to be reported is the same.

34. Schedule 11 – All Officers and Disbursements to Officers This was Schedule 9 on the old Form LM-2. The major change is the requirement to report in Line (I) the percentage of time spent by each officer in the following categories: • Representational Activities (Schedule 15) • Political activities and lobbying (Schedule 16) • Contributions, gifts, and grants (Schedule 17) • General overhead (Schedule 18) • Union administration (Schedule 19)

35. Schedule 11: All Officers and Disbursements to Officers - Allocation of Time • Good faith estimates are acceptable. • The percentages may be rounded to the nearest 10%. • If the time spent in a category is less than 5%, the best estimate to the nearest percentage should be reported rather than rounding to zero. • The total must equal 100%.

36. Schedule 11: All Officers and Disbursements to Officers - Allocation of Time (cont.) • Multiply the total disbursements for each officer (Column (H)) by the percentage in Line (I) for each of the listed schedules. Report the total for all officers in each schedule. • It may be helpful to create an intermediate worksheet to sum the total disbursements for each schedule, but only the totals need to be reported in each schedule.

37. Schedule 12 – Disbursements to Employees This was Schedule 10 on the old Form LM-2. The major change is the requirement to report the percentage of time spent by each employee in the same five categories and in the same manner as discussed for Schedule 11 (Disbursements to Officers).

38. Schedule 13 – Membership Status This is a new schedule.

39. Schedule 13 – Membership Status (cont.) To complete Schedule 13: • In Column (A) list each category of membership tracked by the reporting labor organization and define each category of membership in Item 69 (Additional Information). The definition should include a description of the members covered by the category and indicate whether the members pay full dues. • In Column (B) enter the number of members for each of the membership categories listed in Column (A).

40. Schedule 13 – Membership Status (cont.) • In Column (C) indicate “Yes” if the category of membership listed in Column (A) is generally eligible to vote in all elections held by the labor organization. Describe in Item 69 (Additional Information) any voting restrictions that apply to the category.

41. Schedule 13 – Membership Status (cont.) In Line 8 enter the total of all members of the labor organization. Do not include agency fee payers. Enter the total from Line 8 in Item 20 (Number of Members). • In Line 9 enter the number of agency fee paying nonmembers. • In Line 10 enter the total of Lines 8 and 9, which will be all members and agency fee payers.

42. Schedule 14 – Allocating Receipts Each receipt of the labor organization must be allocated to one of the receipt items in Statement B. Some of these items have backup schedules that require more detailed information. If a receipt does not conform to one of the defined items in Statement B it must be included in Schedule 14 (Other Receipts) in which any "major" receipts during the reporting period must be separately identified. A "major" receipt includes: • any individual receipt of $5,000 or more; or • total receipts from any single entity or individual that aggregate to $5,000 or more during the reporting period. All other receipts in this schedule are aggregated. This process is discussed further below.

43. Schedules 15 through 19 – Allocating Disbursements Each disbursement of the labor organization must be allocated to one of the disbursement items in Statement B. Some of these items have backup schedules that require more detailed information. Schedules 15 through 19 reflect various services provided to union members by the union in which all "major" disbursements during the reporting period in the various categories must be separately identified. A "major" disbursement includes: • any individual disbursement of $5,000 or more; or • total disbursements to any single entity or individual that aggregate to $5,000 or more during the reporting period.

44. Schedules 15 through 19 – Allocating Disbursements (cont.) All other disbursements in these schedules are aggregated. All disbursements, other than those reported elsewhere in Statement B, must be allocated to Schedules 15 through 19, as appropriate.

45. Completing Schedules 14 through 19 Initial Itemization Page • The first step to completing each one of Schedules 14 through 19 is to prepare an Itemization Page and a Continuation Sheet(s), as necessary, for each payee/payer for whom there is for that schedule: - an individual receipt/disbursement of $5,000 or more or - total receipts/disbursements that aggregate to $5,000 or more during the reporting period. • Do not complete a Schedules 15 through 19 for disbursements to officers or employees that must be reported in Schedules 11 and 12. • A separate set of Itemization Pages must be used for each receipt and disbursement schedule.

46. Completing the Itemization Page • Enter in Column (A) the full name and business address of the entity or individual from which the receipt was received or to which the disbursement was made. If you do not know and cannot reasonably attain the full address, the city and state are sufficient. • Enter in Column (B) the type of business or job classification of the entity or individual, such as printing company, office supplies vendor, lobbyist, think tank, marketing firm, legal counsel, etc.

47. Completing the Itemization Page(cont.) • preparing organizing campaign pamphlets • staffing a help desk • opposition research • litigation regarding representation issues • litigation regarding a refusal to bargain charge • grievance arbitration • get-out-the-vote • voter education • advocating or opposing legislation • job retraining • et cetera. Enter in Column (C) the purpose of each individual receipt/disbursement for that payee/payer of $5,000 or more, which means a brief statement or description of the reason the receipt/disbursement was made, such as:

48. Completing the Itemization Page(cont.) • Enter in Column (D) the date that the receipt/disbursement was made. The date of the receipt/disbursement for reporting purposes is the date the labor organization actually received or disbursed the money. • Enter in Column (E) the amount of the receipt/disbursement.

49. Completing the Itemization Page (cont.) • Enter in Line (F) the total of all transactions listed in Column (E). • Enter in Line (G) the totals from any Continuation Pages for this payee/payer. • Enter in Line (H) the total of all itemized transactions with this payee/payer (the sum of Lines (F) and (G)). • Enter in Line (I) the total of all non-itemized transactions for the payee/payer (that is, all individual transactions of less than $5,000 each). • Enter in Line (J) the total of all transactions with the payee/payer for this schedule (the sum of Lines (H) and (I)).

50. Completing the Detailed Summary Page The Detailed Summary Page is used to summarize Schedules 14 through 19.