On October 2, 2008, the Department of Labor, Office of Labor-Management Standards (”OLMS”), published a Final Rule that increases annual financial disclosures required of unions by the Labor-Management Reporting and Disclosure Act (”LMRDA”).  

The new Final Rule implements Form T-1, entitled the Trust Annual Report.  Form T-1 requires a covered labor union to provide financial information about various “trusts” affiliated with the union, such as assets, liabilities, receipts and disbursements.  Form T-1 will give employees and employers a more robust picture of a union’s financial situation. 

The new Final Form T-1 Rule only applies to labor unions with total annual receipts of $250,000 or more.  This limited scope continues OLMS’s recent history of targeting larger unions for increased financial transparency.  In addition to the new Form T-1 Final Rule, OLMS recently increased the amount of disclosure in the Form LM-2 filled out by large unions and established procedures for revoking a small union’s privilege of filing the streamlined LM-3 financial disclosure form.  OLMS explained that these changes are meant “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.”

In order for an organization or fund trigger a labor union’s duty to file a T-1, the organization or fund must (1) be established by the labor union or have a governing body that includes at least one member appointed or selected by the labor union, (2) one of the trust’s primary purpose must be to provide benefits to the members of the labor union or their beneficiaries, and (3) the labor union, alone or in combination with other labor unions, must appoint or selects a majority of the members of the trust’s governing board or the labor union’s contribution to the trust, alone or in combination with other labor unions, represents more than 50% of the trust’s receipts. 

The Form T-1 final rule will take effect on January 1, 2009.