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back to index backAMERItalk August,  2005


Employer's take note of expanded reporting requirements under the Labor Management Reporting & Disclosure Act

What's reportable conduct?


Employers should be aware that the U.S. Department of Labor (DOL) is expanding its enforcement of Section 203 of the Labor Management Reporting and Disclosure Act (LMRDA), which requires an employer to report certain financial dealings with unions, union officials, and employees among others. 

Background
Under the LMRDA, employers have long been required to report to the DOL certain payments to unions, union officials, employees, and labor relations consultants on what is known as a Form LM-10. Similarly, unions are required to report certain payments that might create a conflict of interest on a Form LM-30.  In practice, however, the DOL has not actively enforced these reporting requirements.   The DOL previously announced increased Union reporting requirements and enforcement. The DOL has now announced increased reporting requirements and plans for active enforcement for employers as well.

What is required for employers?


Employers must file a Form LM-10 within 90 days of the end of the employer's fiscal year for each year in which reportable conduct occurs.  A Form LM-10 is available, by clicking here (pdf file download).

Employers should know that the DOL's recent announcement indicates that before the Agency actually begins active enforcement of the employer filing requirement, it will issue further guidelines for employers regarding their reporting obligations.  According to the DOL, employers will not have to file the Form LM-10 until the guidance is issued and "grace period" for filing has passed.  The DOL does not intend to take enforcement action on reporting requirements until the grace period expires.  For many employers, it will also be important to note that, according to the DOL, if the LM-10 is filed by the end of the DOL's grace period, no enforcement action will occur based on any previous reporting failures, except in extraordinary cases.

What is reportable conduct?


An employer must generally file a LM-10 if any payment or anything of value is given to a union or union officials and employees, including: 

Payments or promises to make, directly or indirectly, payments or loans of money or other things of value (including reimbursed expenses) to any labor organization, officer, agent, steward or other representative of a labor organization;

Payments, directly or indirectly, (including reimbursed expenses) to any employee(s) or groups or committee of employer's employees for the purpose of causing them to persuade other employees to exercise or not to exercise their rights under the National Labor Relations Act (NLRA) without previously, or at the same time, disclosing such payment to all such employees;

Expenditures where an object, directly or indirectly, was to interfere with employees' rights under the NLRA;

Expenditures where an object, directly or indirectly, was to obtain information regarding activities of employees or of a labor organization in connection with a labor dispute in which the employer was involved;

Agreements or arrangements (or payments including reimbursed expenses) with/to a labor relations consultant or other independent contractor or organization where an object, directly or indirectly, was to persuade employees to exercise or not to exercise their rights under the NLRA;and
 
Agreements or arrangements (or payments including reimbursed expenses) with/to a labor relations consultant or other independent contractor or organization where an object, directly or indirectly, was to furnish information regarding employee or labor organization activities in connection with a labor dispute in which the employer was involved. 

For any reportable conduct, an employer must disclose the recipient/promisee's name and address, the date and amount, method of payment, full explanation of the purpose for each such payment, promise, agreement or arrangement, and detailed account of services.

What is not reportable?

Employers are not required to report:

Payments to Labor Management Relations Act (LMRA) Section 302(c) Taft-Hartley trust funds;

Payments made in the regular course of business to a class of persons determined without regard to whether they are identified with a labor organization and whose relationships with a labor organization are not ordinarily or readily ascertainable by the payer (e.g., interest on bonds and stock dividends issued by the reporting employer);

Loans made to employees under circumstances/terms unrelated to the employee's status in a labor organization;
 
Payments made to employees as wages/compensation for services as a regular employee of the employer, or by reason of his service as an employee of the employer, or for periods during regular working hours in which the employee engages in activities other than productive work, provided the payment for such time periods is required by law or a bona fide collective bargaining agreement, or made pursuant to a custom or practice under such collective agreement, or made pursuant to a policy, custom, or practice established by the employer without regard to the employee's position in a labor organization;

Initiation fees and assessments paid to a labor organization and deducted from an employee's wages pursuant to LMRA Section 302(c);

Sporadic or occasional gifts, gratuities, or favors of institutional value ($25 or less) given under circumstances/terms unrelated to recipient's status in a labor organization (e.g., traditional Christmas gifts, lunch);
 
Expenditures related exclusively to matters protected by NLRA Section 8(c) (expressing or disseminating views, argument, or opinion whether in written, printed, graphic, or visual form provided such expression contains no threat of reprisal or force or promise of benefit); or

Agreements or arrangements for services exclusively to provide advice or to represent the employer before a court, administrative agency, or arbitration tribunal or engaging in collective bargaining on the employer's behalf. 

What else should employers know?


Records supporting Form LM-10 must be retained for five years.  If reporting is required, the employer's president and treasurer are required to sign the LM-10 form.  Failure to comply with the reporting requirements can result in criminal penalties and personal liability of principal corporate officers.


Source: Butzel Long -
GAI


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