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OLMS Proposed Rule Regarding Form T-1 Trust Reporting for Labor Organizations Impacts Jointly Trusteed Apprenticeship and Training Funds

SWACCA Regulatory Alert

OLMS Proposed Rule Regarding Form T-1 Trust Reporting for Labor Organizations Impacts Jointly Trusteed Apprenticeship and Training Funds

Yesterday,  the Department of Labor’s Office of Labor-Management Standards (OLMS) published a proposed rule to reestablish a Bush-era regulation compelling large labor unions to file detailed financial reports on various trusts in which these unions are involved. These rules were issued at the end of the Bush Administration and never took effect because they were rescinded by the Obama Administration.  This rulemaking will impact jointly trusteed labor management cooperation funds and apprenticeship and training funds.


This redux of the Bush-era rule would compel large unions to include in their publicly available LM-2 union financial disclosure reports detailed financial information on each of the trusts in which the labor organization is interested if the union, either alone or in combination with other labor organizations: (1) selects or appoints the majority of the members of the trust’s governing board; or (2) contributes more than 50% of the trust’s receipts.  In evaluating whether one or more unions contribute more than 50% of a trust’s receipts, the proposed rule provides that contributions made to a trust pursuant to a collective bargaining agreement would be considered contributions from the signatory labor union that would count towards this threshold. The proposed rule also explains the methodology a trust should use to determine if more than 50% of its receipts come from labor organizations.  The proposed rule states that “most” Form T-1s will be filed for four types of trusts.  Among them are labor-management cooperation committees and jointly-trusteed apprenticeship and training funds. 

How Might this Rule Impact Jointly Trusteed Funds and Their Trustees?

In the proposed rule, DOL observes that while these covered trusts are already tracking most receipts, disbursements, and payments in the regular course of business, it is “unlikely” they are tracking the information in the detail or format required by the proposed rule.  As a result, OLMS acknowledges that “covered 3(l) trusts will have to change their accounting systems to track the necessary information in a format that can be provided to the interested labor organization to complete the Form T-1.”

Included in the specific proposed reporting requirements of the Form T-1 are itemization for “major disbursements” (both direct and indirect) and “major receipts” of the covered trusts.  “Major disbursements” and “major receipts” are defined as those that individually, or in the aggregate to a single source during the reporting period, equal $10,000 or more.  Trusts will also have to track both “direct disbursements” and “indirect disbursements” that are made for the benefit of a trustee, officer or employee of the trust (including travel, lodging and other expenses paid directly or reimbursed by the trust).  This will entail trusts breaking out credit card payments by payee and determining which payments were for the benefit of a trustee, officer or employee.

Substantive comments on the proposed rule of due July 29, 2019 and comments on the proposed reporting form and the burden analysis of the proposed rule are due July 1, 2019.  For more on the proposed rule see the DOL, Office of Labor Management Standards website here.

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