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Rule2026-10849

Labor Organization Annual Financial Reports

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Published

June 1, 2026

Effective

July 1, 2026

Issuing agencies

Labor DepartmentLabor-Management Standards Office

Abstract

The Department of Labor (Department) publishes this combined final rule to its regulations to improve its LM Labor Organization Annual Financial Reports by establishing a longer LM form for the largest labor organizations (Form LM-2 Long Form), revising a slightly shorter form for most labor organizations at and above the $350,000 threshold (Form LM-2), making a parallel revision to Form LM-3, and updating reporting thresholds for Forms LM-3 and LM-4 to promote financial integrity and transparency. The final rule applies prospectively under section 208 of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA).

Full Text

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[Federal Register Volume 91, Number 104 (Monday, June 1, 2026)]
[Rules and Regulations]
[Pages 32556-32786]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-10849]

[[Page 32555]]

Vol. 91

Monday,

No. 104

June 1, 2026

Part III

Department of Labor

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Office of Labor-Management Standards

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29 CFR Parts 402, 403, and 408

Labor Organization Annual Financial Reports; Final Rule

Federal Register / Vol. 91 , No. 104 / Monday, June 1, 2026 / Rules
and Regulations

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DEPARTMENT OF LABOR

Office of Labor-Management Standards

29 CFR Parts 402, 403, and 408

RIN 1245-AA10

Labor Organization Annual Financial Reports

AGENCY: Office of Labor-Management Standards, Department of Labor.

ACTION: Final rule.

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SUMMARY: The Department of Labor (Department) publishes this combined
final rule to its regulations to improve its LM Labor Organization
Annual Financial Reports by establishing a longer LM form for the
largest labor organizations (Form LM-2 Long Form), revising a slightly
shorter form for most labor organizations at and above the $350,000
threshold (Form LM-2), making a parallel revision to Form LM-3, and
updating reporting thresholds for Forms LM-3 and LM-4 to promote
financial integrity and transparency. The final rule applies
prospectively under section 208 of the Labor-Management Reporting and
Disclosure Act of 1959 (LMRDA).

DATES: Effective Date: This rule is effective July 1, 2026.
Applicability Date: This rule will apply prospectively to labor
organizations whose fiscal years begin on or after July 1, 2026.

FOR FURTHER INFORMATION CONTACT: Andrew C. Hasty, Chief of the Division
of Interpretations and Regulations, Office of Labor-Management
Standards, U.S. Department of Labor, 200 Constitution Avenue NW, Room
N-5609, Washington, DC 20210, by telephone at (202) 693-0123 (this is
not a toll-free number), 711 (TTY/TDD), or by email at <a href="/cdn-cgi/l/email-protection#07686b6a742a7772656b6e644763686b29606871"><span class="__cf_email__" data-cfemail="80efecedf3adf0f5e2ece9e3c0e4efecaee7eff6">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Statutory Authority
II. Background
a. Introduction
b. Statutory Background
c. Regulatory Background
i. 2020 NPRM
ii. 2025 NPRM
d. The Agency Has Satisfied the Administrative Procedure Act's
Notice and Comment Requirements
III. Adopted Proposals
a. Introduction
b. Canvasing Field Investigators
i. Field Investigators' Response on Benefits and Drawbacks of
Form LM-2
ii. Field Investigators' Response on Items That Could Be Added
to the Reporting Forms
c. Summary of Proposals
i. 2020 NPRM
ii. 2025 NPRM
d. Comments Received
i. Comments Overview
ii. Policy Justification
iii. Comments Based on Disclosures
iv. Comments Opposing Based on General Burden
v. Other Comments
e. Finalized Form LM-2 Long Form
f. Finalized Revisions to Form LM-2
g. Finalized Revisions to Form LM-3
h. Finalized Revisions to Form LM-4
IV. Severability
V. Effective Date
VI. Regulatory Procedures
a. Executive Orders 12866 (Regulatory Planning and Review),
13563 (Improving Regulation and Review), and 14192 (Unleashing
Prosperity Through Deregulation)
b. Regulatory Flexibility Act
c. Paperwork Reduction Act
d. Executive Order 13132
e. Executive Order 12988
f. Unfunded Mandates Reform Act
g. Treasury and General Government Appropriations Act, 1999
h. Executive Order 12630
i. Treasury and General Government Appropriations Act, 2001
j. Congressional Review Act, 1996

I. Statutory Authority

The Department's statutory authority to issue this final rule is
set forth in sections 201 and 208 of the Labor-Management Reporting and
Disclosure Act of 1959, as amended (LMRDA or Act), 29 U.S.C. 431, 438.
Section 208 of the LMRDA provides that the Secretary of Labor
(Secretary) shall have authority to issue, amend, and rescind rules and
regulations prescribing the form and publication of reports required to
be filed under Title II of the Act and such other reasonable rules and
regulations as she may find necessary to prevent the circumvention or
evasion of the reporting requirements. 29 U.S.C. 438. This rule
implements section 201 of the LMRDA, which requires covered labor
organizations to file annual, public reports with the Department,
identifying the labor organization's assets and liabilities, receipts,
salaries and other direct or indirect disbursements to each officer and
all employees receiving $10,000 or more in aggregate from the labor
organization, direct or indirect loans (in excess of $250 aggregate) to
any officer, employee, or member, loans (of any amount) to any business
enterprise, and other disbursements during the reporting period. 29
U.S.C. 431(b). The statute further requires that such information shall
be filed ``in such detail as may be necessary accurately to disclose [a
labor organization's] financial condition and operations[.]'' Id.
The Secretary has delegated the authority under the LMRDA to the
Director of the Office of Labor-Management Standards and permitted
redelegation of such authority. See Secretary's Order 03-2012 (Oct. 19,
2012), published at 77 FR 69376 (Nov. 16, 2012).

II. Background

a. Introduction

On October 13, 2020, the Department proposed to introduce a new
form titled, Form LM-2 Long Form, and update and revise the prior
version of the Form LM-2 labor organization annual financial disclosure
report (prior Form LM-2), which had not had major revisions since 2003.
The Department has made some changes to its 2020 proposal to reduce
burden. Overall, today's final rule will provide additional valuable
information about the nation's largest labor organizations to union
members, the Department, and the public. See 85 FR 64726 (Oct. 13,
2020) (2020 NPRM). As noted in the 2020 NPRM, the Form LM-2 Long Form
and the revisions to the prior Form LM-2 are part of the Department's
continuing efforts to better effectuate the reporting requirements of
the LMRDA.
The Department provided for a 60-day comment period that closed on
December 14, 2020. The Department received 99 comments, of which 97
were unique and posted. The Department received comments from labor
organizations, public interest groups, employer associations, certified
public accountants, as well as current and former labor organization
members and other individuals.
On July 1, 2025, the Department issued a notice of proposed
rulemaking (NPRM) to update the filing thresholds in 29 CFR 403.4(a)
for Forms LM-2, LM-3, and LM-4 Labor Organization Annual Reports. 90 FR
28251 (July 1, 2025) (2025 NPRM). The comment period was open through
July 31, 2025. The Department received a total of 299 comment
submissions. Eleven were unique, substantive comments filed by labor
organizations, employer associations, policy institutes, other
stakeholder groups, and private individuals; the remainder were form
letters.
The Department views the 2020 and 2025 NPRMs as distinct regulatory
proposals that operate in the same reporting framework. The
Department's introduction of the new LM-2 Long Form as well as its
proposed revisions to the Form LM-2, as set forth in the 2020 NPRM, 85
FR 64726 (Oct. 13, 2020), and the Department's interest in

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moderating the burden on reporting labor organizations, as set forth in
the 2025 NPRM, 90 FR 28251 (July 1, 2025), are distinct but related
policy choices. The Department concludes that these proposals will
function in coordination once effective. Accordingly, for efficiency,
this rulemaking finalizes the proposals in both the 2020 NPRM regarding
the Form LM-2 Long Form and revised Form LM-2 and the 2025 NPRM
regarding the filing thresholds for Forms LM-2, LM-3 and LM-4.
After careful consideration of the comments to the 2020 and 2025
NPRMs, and as explained in this rulemaking, the Department has modified
elements of the new Form LM-2 Long Form and the revised Form LM-2 from
the formats initially proposed. We further note that the LM-2 reporting
updates now include a revision that, for consistency with accounting
practices, results in a parallel change to Form LM-3. In response to
the comments on the 2020 and 2025 NPRMs, the Department has also
updated the thresholds for Forms LM-2, LM-3, and LM-4 to account for
inflation.
This combined final rule supports the LMRDA's various reporting
provisions which are designed to empower labor organization members by
providing them with the means and information to maintain democratic
control over their labor organizations and ensure proper accounting of
labor organization funds. Labor organization members are better able to
monitor their labor organization's financial affairs and to make
informed choices about the leadership of their labor organization and
its direction when labor organizations disclose financial information
required by the LMRDA in an easily accessible way. By reviewing the LM
annual financial reports, a member may ascertain the labor
organization's priorities and whether they are in accord with the
union's constitution, the organization's purpose, the member's own
priorities, and those of fellow members. At the same time, this
transparency promotes the labor organization's own interests as a
democratic institution as well as the interests of the public and the
government. Furthermore, the LMRDA's reporting and disclosure
provisions, together with the fiduciary duty provision, 29 U.S.C. 501,
which directly regulates the primary conduct of labor organization
officials, operate to safeguard a labor organization's funds from
depletion by improper or illegal means. Timely and complete reporting
also helps deter labor organization officers or employees from
embezzling or otherwise making improper use of such funds.
The Department issues this final rule to bring the reporting
requirements for labor organizations in line with contemporary
expectations for the disclosure of financial information. The next
section discusses the statutory and regulatory background for this
rule. Subsequent sections discuss the new Form LM-2 Long Form, specific
changes to the revised Form LM-2, and a parallel change to Form LM-3,
as well as the regulatory analysis, the filing threshold changes, and
the revised regulatory text.

b. Statutory Background

In enacting the LMRDA in 1959, a bipartisan Congress found that
``there have been a number of instances of breach of trust, corruption,
disregard of the rights of individual employees, and other failures to
observe high standards of responsibility and ethical conduct which
require further and supplementary legislation that will afford
necessary protection of the rights and interests of employees and the
public generally as they relate to the activities of labor
organizations, employers, labor relations consultants, and their
officers and representatives.'' 29 U.S.C. 401(b).
The LMRDA was designed to remedy these various ills through a set
of integrated provisions aimed largely at labor organization governance
and management. These include a ``bill of rights'' for labor
organization members, which provides for equal voting rights, freedom
of speech and assembly, and other basic safeguards for labor
organization democracy, see 29 U.S.C. 411-415; financial reporting and
disclosure requirements for labor organizations, their officers and
employees, employers, labor relations consultants, and surety
companies, see 29 U.S.C. 431-436, 441; detailed procedural,
substantive, and reporting requirements relating to labor organization
trusteeships, see 29 U.S.C. 461-466; detailed procedural requirements
for the conduct of elections of labor organization officers, see 29
U.S.C. 481-483; safeguards for labor organizations, including bonding
requirements, the establishment of fiduciary responsibilities for labor
organization officials and other representatives, criminal penalties
for embezzlement from a labor organization, a prohibition on certain
loans by a labor organization to officers or employees, prohibitions on
individuals convicted of certain crimes from holding union office or
employment or serving in other prohibited capacities, and prohibitions
on payments for prohibited purposes by an employer or labor relations
consultant to employees, labor organizations, and labor organization
officers and employees, see 29 U.S.C. 501-505; and prohibitions against
extortionate picketing, retaliation for exercising protected rights,
and deprivation of LMRDA rights by violence, see 29 U.S.C. 522, 529,
530.
The LMRDA was the direct outgrowth of a congressional investigation
conducted by the Select Committee on Improper Activities in the Labor
or Management Field, commonly known as the McClellan Committee, chaired
by Senator John McClellan of Arkansas. In 1957, the committee began a
highly publicized investigation of labor organization racketeering and
corruption. Its findings of financial abuse, mismanagement of labor
organization funds, and unethical conduct provided much of the impetus
for the bipartisan enactment of the LMRDA's remedial provisions. See
generally Benjamin Aaron, The Labor-Management Reporting and Disclosure
Act of 1959, 73 Harv. L. Rev. 851, 851-55 (1960). During the
investigation, the committee uncovered a host of improper financial
arrangements between officials of several international and local labor
organizations and employers whose employees were represented or may
have been organized by the labor organizations in question. The
committee found similar arrangements between labor organization
officials and the companies that handled matters relating to the
administration of labor organization benefit funds. See generally
Interim Report of the Select Committee on Improper Activities in the
Labor or Management Field, S. Report No. 85-1417 (1957); see also
William J. Isaacson, Employee Welfare and Benefit Plans: Regulation and
Protection of Employee Rights, 59 Colum. L. Rev. 96 (1959).
Financial reporting and disclosure were conceived as a partial
remedy for these improper practices. As noted in a key Senate Report on
the legislation, disclosure would discourage questionable practices
(``The searchlight of publicity is a strong deterrent.''); aid labor
organization governance (Labor organizations will be able ``to better
regulate their own affairs. The members may vote out of office any
individual whose personal financial interests conflict with his duties
to the members.''); facilitate legal action by members against
``officers who violate their duty of loyalty to the members;'' and
create a record (The reports will furnish a ``sound factual basis for

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further action in the event that other legislation is required.''). S.
Rep. No. 187, at 412 (1959), reprinted in 1 NLRB Legislative History of
the Labor-Management Reporting and Disclosure Act of 1959.
As the House Report disclosed, ``It is the purpose of this bill to
insure that full information concerning the financial and internal
administrative practices and procedures of labor organizations shall
be, in the first instance available to the members of such
organizations. In addition, this information is to be made available to
the Government, and through the Secretary of Labor, is to be open to
inspection by the general public. By such disclosure, and by relying on
voluntary action by members of labor organizations, it is hoped that a
deterrent to abuses will be established.'' House Report No. 741, at 766
(86th Cong., 1st Sess., 2 U.S. Code Cong. & Admin. News, 1959, p.
2424).

c. Regulatory Background

Section 201 of the Act requires labor organizations to file annual
public reports with the Department, detailing the labor organization's
financial conditions and operations. 29 U.S.C. 431(b). After Congress
enacted the LMRDA, the Department developed forms for implementing the
LMRDA's financial reporting requirements. Those annual report forms
(Form LM-2, Form LM-3, and Form LM-4) required information about a
labor organization's assets, liabilities, receipts, disbursements,
loans to officers and employees and business enterprises, payments to
each officer, and payments to each employee of the labor organization
paid more than $10,000 during the fiscal year. The Department required
reporting details about labor organizations that varied depending on
the amount of the labor organization's annual receipts. 29 CFR 403.4.
Before today's final rule, labor organizations with annual receipts
of $250,000 or more, and all labor organizations in trusteeship
(regardless of the amount of their annual receipts), were required to
file Form LM-2--and there was only one version of that form. 29 CFR
403.2-403.4 (2025). The form could also be filed voluntarily by any
labor organization with less than $250,000 in annual receipts. Form LM-
2 required certain receipts and disbursements to be reported by
functional categories, such as representational activities; political
activities and lobbying; contributions, gifts, and grants; union
administration; and benefits. Further, the form required labor
organizations to allocate the time their officers and employees spent
according to functional categories, as well as the payments that each
of these officers and employees received, and it compelled the
itemization of certain transactions totaling $5,000 or more.
Using filing data for federal fiscal year ending September 30,
2025, Form LM-2 was filed by 23.6 percent of the reporting labor
organizations. If a labor organization had less than $250,000 in total
annual receipts, it could file either a Form LM-3 or Form LM-4, both of
which required significantly less detail than Form LM-2. Form LM-3 was
filed by 44.5 percent of the reporting labor organizations (i.e., those
with less than $250,000 in total annual receipts but $10,000 or more).
Labor organizations with receipts of less than $10,000 were permitted
to file Form LM-4. They constituted 27.8 percent of the filers. The
remaining 4.1 percent were allowed to file a simplified report, which
was available to labor organizations with no assets, liabilities,
receipts, or disbursements.
As remains the case under this final rule, the LM Labor
Organization Annual Report forms must be signed and filed
electronically with the Department within 90 days of the end of the
labor organization's fiscal year. The labor organization's president
and treasurer (or its corresponding officers) are personally
responsible for filing the reports and for any statement in the reports
known by them to be false. 29 CFR 403.6. These officers are also
responsible for maintaining records in sufficient detail to verify,
explain, or clarify the accuracy and completeness of the reports for
not less than five years after the filing of the forms. 29 CFR 403.7. A
labor organization ``shall make available to all its members the
information required to be contained in such reports'' and ``shall . .
. permit such member[s] for just cause to examine any books, records,
and accounts necessary to verify such report[s].'' 29 CFR 403.8(a). The
reports are public information. 29 U.S.C. 435(a). The Secretary is
charged with providing for the inspection and examination of the
financial reports, 29 U.S.C. 435(b). For this purpose, OLMS maintains
an Online Public Disclosure Room (see <a href="https://olmsapps.dol.gov/olpdr/">https://olmsapps.dol.gov/olpdr/</a>)
on its public-facing website, <a href="http://www.dol.gov/agencies/olms">www.dol.gov/agencies/olms</a>, where reports
filed since the year 2000 are available for the public's review and
download.
The format of Form LM-2 remained essentially unchanged from the
early 1960s until October 2003, when revisions created the prior
version of Form LM-2 through the rulemaking chronology detailed below.
On December 27, 2002, the Department issued an NPRM proposing
revisions of Form LM-2 (and other proposals for reforms of reports),
expanding LMRDA coverage, and a newly created form. 67 FR 79280 (Dec.
27, 2002).
On October 9, 2003, the Department issued a final rule with an
effective date of January 4, 2004. 68 FR 58373 (Oct. 9, 2003) (2003
final rule). The rule put into effect the NPRM-proposed changes to Form
LM-2 with modifications. The key changes made by that final rule were
as follows:
1. $5,000 Itemization Threshold: Form LM-2 filers itemized certain
categories of receipts and disbursements of $5,000 or more, as well as
receipts and disbursements to a single entity that totaled $5,000 or
more in the reporting year.
2. Confidentiality Exemption: Labor organizations (hereinafter also
referred to as ``labor unions'' or ``unions'') could take advantage of
special procedures for reporting confidential information, such as
information that would expose the reporting union's prospective
organizing strategy and information that would provide a tactical
advantage to parties with whom the union engages in contract
negotiations. Such information was not specifically reported or
publicly disclosed.
3. Functional Reporting: Disbursements were reported in five
specified categories (Representational Activities; Political Activities
and Lobbying; Contributions, Gifts and Grants; General Overhead; and
Union Administration).
4. Functional Reporting of Work Time: Form LM-2 required unions to
estimate the time spent by each union officer and union employee
(collectively, ``union officials'') on different duties, based on the
categories of activities represented by Form LM-2 schedules and
represented as a percentage of work time totaling 100 percent. Unions
then reported the portion of gross salaries for each schedule based on
the percentage of time estimates.
5. Accounts Payable/Receivable: Form LM-2 included schedules
designed for reporting delinquent accounts payable and receivable (with
the typical Form LM-2 itemization threshold of $5,000).
6. Reporting of Investments: Form LM-2 required unions to report
all investments that both had a book value greater than $5,000 and
represented five percent or more of the union's investments.
7. Membership Categories: Form LM-2 required unions to report their
number of members by category. The union was permitted to determine the
categories.

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Common categories included active members, retirees, full retirees,
apprentices, etc.
Approximately four and a half years later, the Department issued a
notice of proposed rulemaking, 73 FR 27346 (May 12, 2008), to further
revise Form LM-2 in several ways. The Department proposed a major
modification that would require an expanded number of schedules to
further itemize receipts. The Department subsequently issued a final
rule, 74 FR 3678 (Jan. 21, 2009) (2009 final rule), with an effective
date of February 20, 2009, and an applicability date of July 1, 2009.
The rule was ultimately rescinded before any reports were filed. The
three key changes in the 2009 rule were:
1. Additional information on Schedules 3 and 4: Had it become
applicable, the rule would have required additional information on the
Form LM-2 Schedule 3--Sales of Investments and Fixed Assets, and
Schedule 4--Purchase of Investments and Fixed Assets, disclosing the
party buying or selling union assets.
2. Additional information on Schedules 11 and 12: The rule would
have required additional information on the Form LM-2 Schedule 11--All
Officers and Disbursements to Officers, and Schedule 12--Disbursements
to Employees, disclosing the total value of the benefits received by
union officers and union employees (i.e., it would have required unions
to include the value of union officer and employee benefits in
Schedules 11 and 12, respectively, rather than aggregated in a lump sum
figure in Schedule 20).
3. Itemization of Receipts: The rule would have added itemization
schedules corresponding to additional categories of receipts.
On April 21, 2009, the Department issued a notice of proposed
rulemaking to rescind the Form LM-2 changes made by the January 2009
final rule. 74 FR 18172 (Apr. 21, 2009). The NPRM expressed concern
that the January 2009 final rule failed to consider the value of
increased reporting and its attendant burdens, which may have resulted
in a reporting regime that lacked what the NPRM stated was a required
balance between the need for transparency in union financial reporting
and the need to protect unions from excessive burdens attendant to such
reporting. Id. at 18175.
On October 13, 2009, the Department issued a final rule, which
rescinded the Form LM-2 changes made by the January 2009 final rule. 74
FR 52401 (Oct. 13, 2009).\1\ As to the perceived failure to adequately
balance burden with benefit, the Department concluded that the annual
reports need not disclose ``every bit of probative financial
information.'' Id. at 52406 (internal quotation marks omitted).
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\1\ On February 20, 2009, OLMS extended the effective date of
the January 2009 final rule to April 21, 2009. 74 FR 7814 (Feb. 20,
2009). The April 2009 final rule delayed the effective date of the
January 2009 final rule until October 19, 2009, and the
applicability date until January 1, 2010. 74 FR 18132 (Apr. 21,
2009).
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Another basis for the Department's rescission of the January 2009
rule was the view that it had promulgated the rule ``too soon after the
2003 changes'' and ``without an adequate review of the benefits and
costs of the changes.'' Id. The Department stated that ``a more
comprehensive review'' was needed to measure the benefits of the 2003
revisions against their costs; the Department suggested as two
potential options ``a survey of all Department investigators or a
documented review of the thousands of filings received by the
Department under the 2003 rule.'' Id. at 52408.
i. 2020 NPRM
On October 13, 2020, the Department issued a notice of proposed
rulemaking to revise and update the Form LM-2 (revised Form LM-2) and
establish a new Form LM-2 Long Form in the interest of labor
organization financial integrity and transparency. 85 FR 64726 (Oct.
13, 2020). The 2020 NPRM incorporated findings the Department collected
by canvassing OLMS field investigators on their experiences and
insights on the 2003 changes to Form LM-2, as well as their views on
what further improvements, if any, could be made.
The Department proposed a series of amendments to reporting
requirements addressing multiple subject areas relevant to labor
organization financial disclosure and transparency. The 2020 NPRM was
intended to reassess existing reporting thresholds, clarify reporting
obligations, and enhance the utility of disclosed information for
members, the public, and the Department. To provide a clear
understanding of the scope of that rulemaking, the Department
summarizes here the principal subject areas addressed in the 2020 NPRM,
which together define the range of issues on which the Department
sought comment and from which any final regulatory provisions must
logically derive.
The 2020 NPRM included proposals concerning reporting thresholds
applicable to the prior Form LM-2 and its accompanying itemization
schedules filed by labor organizations. Specifically, the Department
proposed revisions to the $250,000 filing threshold for prior Form LM-
2, which was required of labor organizations with higher annual
receipts. The NPRM sought comment on whether that threshold continued
to strike an appropriate balance between ensuring transparency and
minimizing unnecessary reporting burdens, and whether adjustments to
that threshold would improve the effectiveness of the reporting regime.
The Department also proposed raising the $5,000 itemization threshold
to $7,500 for various schedules filed with prior Form LM-2.
For the largest labor organizations, the Department proposed to
create a new financial disclosure form, the Form LM-2 Long Form. The
agency sought comment on an $8,000,000 filing threshold for that form.
In addition to threshold-related proposals, the 2020 NPRM addressed
several specific categories of financial reporting. The Department
proposed revisions concerning the reporting of strike funds, including
whether such funds should be more clearly identified or separately
disclosed in annual reports to improve transparency regarding their use
and administration. The NPRM also included proposals related to foreign
transactions, with a focus on enhancing disclosure of financial
interactions involving foreign entities, accounts, or interests. These
proposals were intended to ensure that members and the public have a
clearer understanding of the scope and nature of labor organization
financial activities that extend beyond domestic operations.
The 2020 NPRM further considered the scope and application of
confidentiality provisions within the reporting framework. The
Department requested comment on modifications to existing
confidentiality exemptions that permit labor organizations to withhold
certain sensitive information, and it sought comment on whether such
exemptions should be modified, narrowed, or eliminated to better
balance transparency with legitimate privacy and security concerns. The
2020 NPRM also addressed whistleblower protections, proposing measures
intended to strengthen protections against retaliation and to encourage
individuals to report potential violations of the LMRDA. These
provisions reflected the Department's interest in ensuring that
reporting and compliance mechanisms are supported by adequate
safeguards for individuals who come forward with information.

[[Page 32560]]

Finally, the 2020 NPRM proposed requirements for additional
identifying information to be included in labor organization reports.
These proposals were intended to improve the ability of the Department,
union members, and the public to identify reporting entities and
related individuals or organizations, thereby enhancing the overall
transparency and usability of the reported data. The Department
solicited public comment on its proposals, their economic
justification, their anticipated effects on reporting burden and
transparency, and any alternatives that would better achieve the stated
objectives.
The Department received comments on the 2020 NPRM. As of March 17,
2021, the Department withdrew the 2020 NPRM as listed on the regulatory
agenda and classified the state of rulemaking as completed.\2\ The
Department retained the comments and preserved the record related to
the 2020 NPRM. In formulating this final rule in 2026, the Department
reviewed, considered, and addressed all substantive comments received
on the 2020 NPRM. Those comments are not stale, and the Department
found them informative when making its determinations discussed below.
While the rulemaking was listed as ``withdrawn'' and ``completed'' on
the regulatory agenda, the Department has satisfied its obligation to
provide notice and comment on the proposals in the 2020 NPRM before
issuing this final rule. As discussed below, the Department determined
that it need not seek further public comments on its proposals,
although it chose to do so solely regarding the proposal to adjust the
prior Form LM-2 filing threshold for inflation.
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\2\ <a href="http://Reginfo.gov">Reginfo.gov</a>, Spring 2021, RIN 1245-AA10, <a href="https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202104&RIN=1245-AA10">https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202104&RIN=1245-AA10</a>.
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ii. 2025 NPRM
On July 1, 2025, the Department issued a notice of proposed
rulemaking to update the filing thresholds in 29 CFR 403.4(a) for Forms
LM-2, LM-3, and LM-4 Labor Organization Annual Reports. 90 FR 28251
(July 1, 2025) (2025 NPRM). The comment period was open through July
31, 2025.
In the 2025 NPRM, the Department proposed targeted amendments to
the reporting requirements, with a primary focus on revising the filing
thresholds applicable to labor organization annual financial reports.
The 2025 NPRM was designed to reassess longstanding filing thresholds
in light of significant inflation since their last revision and to
reduce unnecessary reporting burdens on labor organizations whose
receipts no longer justify more detailed reporting. As with prior
rulemakings, the Department summarizes here the principal subject areas
addressed in the 2025 NPRM in order to clarify the scope of the
proposals and identify the issues on which the Department solicited
public comment.
The central focus of the 2025 NPRM was the revision of filing
thresholds for Forms LM-2, LM-3, and LM-4. The Department proposed to
increase the threshold for filing Form LM-2 from $250,000 to $450,000
in total annual receipts, reflecting the erosion of the threshold's
real value due to inflation since its last adjustment in 2003. The 2025
NPRM explained that, over that period, overall price levels increased
substantially, such that the $250,000 threshold captured labor
organizations with comparatively modest receipts that would not have
been subject to the most detailed reporting requirements under earlier
economic conditions. By proposing a rise in the Form LM-2 threshold,
the Department sought to better align reporting obligations with
economic realities while preserving detailed disclosure for the largest
labor organizations.
Consistent with this proposal, the Department also proposed
corresponding revisions to the Form LM-3 and Form LM-4 thresholds.
Specifically, the NPRM proposed increasing the upper threshold for Form
LM-3 eligibility from $250,000 to $450,000 and raising the Form LM-4
threshold from $10,000 to $25,000. These proposed changes were intended
to maintain the structure of the tiered reporting system while ensuring
that each reporting category reflected inflation-adjusted distinctions
among labor organizations. The Department emphasized that these
adjustments would not eliminate reporting obligations but would instead
allow certain labor organizations to file forms appropriate to their
size and financial activity.
The 2025 NPRM also addressed conforming changes to regulatory text,
forms, and instructions associated with these thresholds. The
Department proposed revisions to 29 CFR 403.4(a) and to Forms LM-2, LM-
3, and LM-4 and their instructions to reflect the updated thresholds
and ensure internal consistency across reporting materials. These
conforming amendments were intended to provide clarity to filers
regarding which form must be used based on total annual receipts.
In addition, the NPRM discussed the anticipated effects of the
proposed threshold changes, including reductions in reporting burden
and associated compliance costs. The Department estimated that a
substantial number of labor organizations would become eligible to file
less detailed forms, resulting in significant reductions in reporting
hours and costs while maintaining transparency for larger labor
organizations that would continue to file Form LM-2. The NPRM
emphasized that the proposal was deregulatory in nature, as it did not
propose new reporting requirements but instead sought to reduce
existing burdens by adjusting thresholds to reflect economic
conditions.
The 2025 NPRM did not propose revisions to other aspects of the
reporting regime addressed in prior rulemakings, such as strike funds,
foreign transactions, confidentiality exemptions, whistleblower
protections, or additional identifying information. Rather, the scope
of the 2025 NPRM was limited to filing thresholds for annual reports
that existed when the 2025 NPRM was issued and related conforming
changes. Accordingly, the Department solicited public comment on the
proposed threshold adjustments, their economic justification, their
anticipated effects on reporting burden and transparency, and any
alternatives that would better achieve the stated objectives.
Taken together, the proposals in the 2025 NPRM were confined to the
adjustment of filing thresholds for prior Forms LM-2, LM-3, and LM-4,
along with associated conforming amendments and analysis of their
economic impact.
The Department received comments on the 2025 NPRM. In formulating
this final rule in 2026, the Department reviewed, considered, and
addressed all substantive comments received on the 2025 NPRM.

d. The Agency Has Satisfied the Administrative Procedure Act's Notice
and Comment Requirements

Section 553 of the Administrative Procedure Act (APA) establishes
the notice and comment requirements that apply to rules such as this
one. Perez v. Mortgage Bankers Ass'n, 575 U.S. 92, 96 (2015). First,
the agency must provide notice of the proposed rulemaking by
publishing, in the Federal Register, a notice that includes ``either
the terms or substance of the proposed rule or a description of the
subjects and issues involved.'' 5 U.S.C. 553(b)(3). Second, the agency
must give the public an opportunity to comment on the

[[Page 32561]]

proposed rule ``through submission of written data, views, or
arguments,'' and the agency must consider ``the relevant matter
presented'' in the public comments. Id. 553(c). To comply with the
APA's notice and comment requirements, the agency's NPRM must provide
``fair notice'' of the final rule that is ultimately adopted. Long
Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 174 (2007). The
Department has complied with these requirements regarding the agency's
2020 proposals because OLMS has already provided a full opportunity for
public comment through the 2020 NPRM, 85 FR 64726 (Oct. 13, 2020), and
the core circumstances underlying that proposal have not materially
changed.\3\
---------------------------------------------------------------------------

\3\ Alternatively, the Department invokes the Good Cause
exception to forego notice and comment. The Department has already
provided a full opportunity for notice and comment through the 2020
NPRM, 85 FR 64726, and the 60-day comment period that closed on
December 14, 2020. Providing a further period would be unnecessary
as the core circumstances, including factual predicates, legal
authority, regulatory environment, and evidentiary basis, have not
materially changed since the close of the comment period, and the
original record remains fresh. OLMS has affirmatively determined,
through contemporaneous review supported in the administrative
record, that the record continues to serve the APA's purposes.
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i. Procedural History and Preservation of the Administrative Record
On October 13, 2020, the Department published the 2020 NPRM. The
comment period closed on December 14, 2020, and the agency received
approximately 100 public comments. Docket No. LMSO-2020-0002. The Fall
2020 Unified Agenda projected a final rule date of January 2021.
However, the Spring 2021 Unified Agenda classified the NPRM as
``withdrawn'' as of March 17, 2021, and designated the rulemaking as a
``Completed Action.'' No final rule was published.\4\
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\4\ Characterizing a rule as ``withdrawn'' in the Unified Agenda
does not nullify the NPRM such that the agency must start over with
a new NPRM before finalizing. See Sanofi Aventis U.S. LLC v. United
States Dep't of Health & Hum. Servs., 58 F.4th 696, 706-07 (3d Cir.
2023).
---------------------------------------------------------------------------

OLMS retained the complete administrative record from the 2020
NPRM, including the notice of proposed rulemaking; the canvassing of
OLMS field investigators conducted in two phases in July and September
2019, including the questionnaire and responses thereto (see 85 FR
64734 (Oct. 13, 2020)); the economic analysis and regulatory impact
assessment; the approximately 100 public comments, and all supporting
materials. In promulgating this final rule, OLMS has reviewed this
record in its entirety and finds no new evidence that would warrant
altering the proposed rule.
ii. Legal Framework
The APA does not establish a ``useful life'' for a notice-and-
comment record, and there is no set time limit between closure of a
comment period and publication of a final rule. Action on Smoking &
Health v. Civil Aeronautics Bd., 713 F.2d 795, 800 (D.C. Cir. 1983);
see also Sanofi Aventis, 58 F.4th at 707 (upholding rule
notwithstanding ``long delay between the notice of proposed rulemaking
and finalizing the rule''); Am. Mining Cong. v. EPA, 907 F.2d 1179,
1191-92 (D.C. Cir. 1990) (finding no need for new notice and comment
prior to promulgating a 1988 rule that relied on data acquired in a
1980 notice-and-comment process). However, ``the life of such a record
is not infinite.'' Action on Smoking, 713 F.2d at 800. Courts have
recognized that additional notice and comment may be required when
``circumstances have changed so much'' since the original proceedings
that the agency ``would wish to write a different rule.'' Am.
Optometric Ass'n v. FTC, 626 F.2d 896, 907 (D.C. Cir. 1980). This ``new
evidence'' must amount to ``a change in `core' circumstances, the kind
of change that goes to the very heart of the case.'' Id. (quoting
Greater Boston Television Corp. v. FCC, 463 F.2d 268, 283 (D.C. Cir.
1971)).
iii. Core Circumstances Have Not Materially Changed
If the information the Department relied on for its proposal has
not changed to such a significant degree that it would lead to a change
in the rule, the notice and opportunity for comment that the Department
originally provided will likely satisfy the APA's requirements. See Am.
Optometric Ass'n, 626 F.2d at 907. The Department has reviewed the
entire administrative record and finds that the core circumstances have
not materially changed.
The largest labor organizations continue to present heightened
transparency and enforcement concerns. Findings from the canvassing
study regarding indirect disbursements for travel-related expenses for
officers and employees, opacity of certain foreign transactions, and
limited enforcement utility of functional time-allocation reporting
remain valid and uncontradicted by any subsequent study, audit finding,
or enforcement trend.
The LMRDA, 29 U.S.C. 401-531, and the Secretary's rulemaking
authority under sections 431 and 438 remain unchanged. No intervening
judicial decisions have altered the statutory basis for this
rulemaking. The Supreme Court's decision in Loper Bright Enterprises v.
Raimondo, 603 U.S. 369 (2024), overturning Chevron deference, does not
affect the Secretary's express statutory authority to prescribe the
form and content of financial reports under 29 U.S.C. 431. Unlike the
intervening Supreme Court decision in American Optometric, which
altered the state-law landscape underlying the FTC's rule and prompted
remand, Loper Bright does not bear on the substance of the reporting
requirements at issue here.
Moreover, prior Forms LM-2, LM-3, and LM-4 remained structurally
unchanged since the 2003 rulemaking. No other agency regulations
conflicted with or superseded the proposals in the 2020 NPRM. The
results of the canvassing study, economic analysis, and approximately
100 public comments continue to provide a sufficient evidentiary basis
for this final rule. The record fully tests the regulation through
diverse public input, provides fairness to affected parties, and
supports judicial review. See Small Refiner Lead Phase-Down Task Force
v. EPA, 705 F.2d 506, 519 (D.C. Cir. 1983) (identifying these three
purposes of notice-and-comment).
iv. 2025 NPRM on Filing Thresholds Does Not Alter Core Circumstances
The 2025 NPRM proposed only inflation adjustments to the Forms LM-
2, LM-3, and LM-4 thresholds, without altering form content or creating
new reporting tiers. The 2025 and 2020 NPRMs address distinct
regulatory questions: the former concerns dollar values at which
organizations transition between existing tiers; the latter concerns
enhanced reporting requirements for the largest organizations through a
new tier with additional schedules (Form LM-2 Long Form) and revisions
to expand reporting on Form LM-2. The one exception is that both NPRMs
proposed changing prior Form LM-2's $250,000 threshold. To the extent
core circumstances regarding inflation had changed from 2020 regarding
that threshold, the Department provided new notice and an opportunity
for public comment on that issue in the 2025 NPRM.
The Department reviewed the 2025 NPRM record, including 299
comments, and finds nothing that materially alters the core
circumstances of the 2020 NPRM. One non-profit expressly urged the
Department to consider the 2020 NPRM's approach of pairing a threshold
adjustment to prior Form LM-2 with enhanced reporting for the largest
filers. A labor relations consultant noted that hundreds of
organizations representing over one million union members would

[[Page 32562]]

lose detailed itemized reporting under the 2025 NPRM, identifying
representational spending as the category of greatest interest to dues-
paying members. These comments do not identify changed conditions,
rather, they speak directly to the transparency deficiencies the 2020
NPRM was designed to address and reaffirm the continuing need for
enhanced reporting. Far from evidencing a change in core circumstances,
the comment record from the 2025 NPRM reinforces the factual predicates
underlying this final rule.
v. Exclusion of Form LM-2 Long Form Threshold From 2025 NPRM
The 2025 NPRM did not seek comment on the proposed $8,000,000 Form
LM-2 Long Form threshold because it is a new threshold proposed in 2020
that has never been in effect. The 2025 NPRM adjusted previous
thresholds for inflation: the Form LM-2 threshold of $250,000, in
effect since 2003, and the Form LM-3 threshold of $10,000, in effect
since 1992.\5\ Because the Form LM-2 Long Form threshold has never been
adopted, there was no threshold to recalibrate. Including it in the
2025 NPRM would have been inconsistent with that rulemaking's limited
purpose. This omission does not reflect a change in agency position or
core circumstances.
---------------------------------------------------------------------------

\5\ The Form LM-4 was introduced in the 1992 final rule that
established the Form LM-3 threshold of $10,000. 57 FR 49356 (Oct.
30, 1992).
---------------------------------------------------------------------------

vi. The Original Administrative Record Remains Fresh
OLMS has determined that the original record remains sufficiently
fresh to support the final rule. Mobil Oil Corp., 35 F.3d at 584 (``If
the original record is still fresh, a new round of notice and comment
might be unnecessary. Such a finding . . . must be made by the agency
and supported in the record; it is not self-evident.'').
Over five years have elapsed since publication of the 2020 NPRM.
The passage of time alone, however, does not render a record stale; the
APA establishes no fixed deadline. Action on Smoking, 713 F.2d at 800.
The relevant inquiry is whether the original record continues to serve
the APA's purposes of ensuring that the regulation has been tested by
diverse public comment, that affected parties have been afforded
fairness, and that the record supports judicial review. Small Refiner,
705 F.2d at 519.
OLMS finds each purpose satisfied. The 2020 NPRM generated
approximately 100 substantive comments addressing the full range of
issues presented, including creation of the new Form LM-2 Long Form,
the proposed $8,000,000 threshold for the Form LM-2 Long Form, the 12
additional schedules for the Form LM-2 Long Form, revisions to the Form
LM-2, and estimated compliance burden. The 60-day comment period was
not truncated, and no commenter has suggested it was procedurally
deficient.
The subject matter of this rulemaking further supports a finding of
continued freshness. The regulatory framework governing labor
organization reporting has remained largely unchanged for decades. The
basic LMRDA reporting framework has been in place since 1959. The most
recent significant revision to LM form content occurred in 2003, and
the reporting structure remained unchanged for seventeen years before
the 2020 NPRM. The institutional structures of labor organizations, the
nature of the financial transactions the proposed schedules are
designed to capture, and the enforcement challenges identified in the
canvassing study are not circumstances that fluctuate materially over
several years. This rulemaking does not involve the type of rapidly
evolving scientific data, volatile market conditions, or shifting
state-law landscape that prompted remand in American Optometric
Association, 626 F.2d at 907.
OLMS has conducted a thorough contemporaneous review of the record
against current conditions. To the extent any external changes have
occurred since 2020, such as general inflation, changes in the number
of filers, or developments in electronic filing technology, these do
not constitute changes in core circumstances ``that go[ ] to the very
heart of the case.'' Am. Optometric Ass'n, 626 F.2d at 907. The core
rationale for the Form LM-2 Long Form--that the largest labor
organizations require more detailed financial reporting to serve the
interests of union members and the public and to support effective
enforcement--remains unchanged. Nothing in the administrative record or
in the intervening years suggests otherwise.
OLMS satisfied the APA's notice and comment requirements by issuing
the 2020 NPRM, providing the public an opportunity to comment on the
NPRM, and considering the relevant matters presented in the public
comments. As the core circumstances for promulgating the proposals from
the 2020 NPRM have not changed, the Department now finalizes those
proposals after considering the comments received.

III. Adopted Proposals

a. Introduction

On October 13, 2020, the Department proposed changes to enhance
Form LM-2 reporting by requiring labor organizations to disclose
additional information about their financial activities to their
members, this Department, and the public. With this final rulemaking,
the Department now introduces a new Form LM-2 Long Form and a revised
Form LM-2. Most of the changes proposed in the 2020 NPRM, including new
schedules, have been adopted in the final rule and will be identified
and discussed below. In response to public comments received, the
Department modified the initial proposal and decided not to incorporate
several items on which it sought comments. With this final rule, the
Department presents its rationale for adopting specific changes to Form
LM-2 reporting, including creating the new Form LM-2 Long Form for the
largest and most complex labor organizations. Additionally, the
Department shares its reasoning for modifying or not implementing
changes initially proposed. It is worth noting that the revisions to
the Form LM-2 necessitate a parallel change to the Form LM-3,
specifically the revision eliminating the reporting distinction between
certain indirect and direct disbursements to officers and employees.
Concurrently, and to moderate the burden on smaller labor organizations
to comply with their annual financial reporting obligation under the
LMRDA, this rule also finalizes the 2025 NPRM by updating the filing
thresholds (annual receipts) for Forms LM-2, LM-3 and LM-4.
The primary purpose of this rule is in furtherance of labor
organization transparency. Today's national and international labor
organizations operate more like sophisticated modern corporations in
their structure, scope, and complexity than the labor organizations in
existence when the LMRDA became law more than 65 years ago. As evidence
of this, Fiscal Year 2025 filing data, the most recent year of complete
filing data at the time of this rule, shows that three labor
organizations reported holding over $1 billion in assets. As benefits
have become a larger component of compensation, information about
benefits paid to union officers and employees has become more important
to union members. The proportion of wages and salaries paid to workers
compared to their ``other compensation'' has changed significantly in
this time span. In 1966, more than 80 percent of total compensation
consisted of wages

[[Page 32563]]

and salaries, with less than 20 percent representing benefits. U.S.
Department of Labor, ``Report on the American Workforce'' 76, 87
(2001). By 2025, private sector worker wages and salaries dropped to
70.3 percent of total compensation and benefits grew to 29.7 percent of
the compensation package. Bureau of Labor Statistics, U.S. Department
of Labor, ``The Economics Daily'', Compensation costs for private
industry in March 2025.
Moreover, labor organization members, like consumers, citizens, or
creditors, expect access to relevant and useful information to make
basic investment, career, retirement decisions, and exercise legally
guaranteed rights.
In 2003, the Department revised Form LM-2, and those changes helped
further the LMRDA's reporting mandate. However, based on the
Department's experience since 2003, along with valuable input from OLMS
field personnel whose day-to-day work responsibilities center around
LMRDA enforcement, the Department determined that additional
enhancements to Form LM-2 reporting are necessary.
When the Department proposed revising Form LM-2 in 2020, it had
just expended considerable resources on investigating widespread
corruption involving high-level officials in the automotive industry.
The corruption schemes involved the United Auto Workers International
Union (UAW) in Detroit, Michigan, and a Detroit automaker. Those
investigations produced multiple criminal convictions in the U.S.
District Court for the Eastern District of Michigan.
The joint investigations conducted by OLMS, the Department's Office
of Inspector General, the Federal Bureau of Investigation (FBI), and
the Internal Revenue Service centered around a conspiracy involving
Fiat Chrysler executives bribing labor officials to influence labor
negotiations. Violations included conspiracy to violate the Labor
Management Relations Act by paying and delivering more than $1.5
million in prohibited payments and things of value to UAW officials,
receiving prohibited payments and things of value from others acting in
the interest of Fiat Chrysler, failing to report income on individual
tax returns, conspiring to defraud the United States by preparing and
filing false tax returns for the UAW-Chrysler National Training Center
that concealed millions of dollars in prohibited payments directed to
UAW officials, and deliberately providing misleading and incomplete
testimony in the federal grand jury.
When individuals trusted to safeguard labor union funds abuse that
trust by defrauding or embezzling from union members, the union is
damaged as an institution. On January 29, 2021, the United States and
the UAW entered a consent decree subjecting the union to federal
oversight for six years. Under the consent decree, an independent
monitor was tasked with overseeing the UAW's operations to address
fraud, corruption, and misconduct within the UAW.\6\
---------------------------------------------------------------------------

\6\ United States v. Int'l Union, United Auto., Aerospace &
Agric. Implement Workers of Am., Consent Decree, No. 2:20-cv-13293
(E.D. Mich. Jan. 29, 2021).
---------------------------------------------------------------------------

The aforementioned OLMS cases illustrate that reporting and
disclosure helps uncover criminal conduct. A rigorous and strictly
enforced reporting regime deters and reveals legal violations and aids
OLMS in the enforcement of the LMRDA's civil and criminal penalties.
When proposing revisions to Form LM-2 reporting, the Department cited
multiple examples of large-scale labor organization fraud and
embezzlement cases that OLMS had investigated. OLMS continues to
uncover misconduct and criminal activity involving labor organization
funds based on information reported on union LM forms. For example,
OLMS conducts audits through its Compliance Audit Program and other
investigations to ensure that unions comply with the LMRDA. When
selecting a union for an audit or investigation, OLMS considers a risk-
based analysis of Form LM-2 filing data.
In the period since the 2020 NPRM was published, OLMS investigators
have uncovered evidence of numerous embezzlement schemes, based at
least in part on LM reports, that led to criminal convictions. In one
example, International Alliance of Theatrical Stage Employees (IATSE)
Local 306, a former officer was sentenced to three years of probation
and was ordered to pay restitution in the amount of $65,843.\7\ In
another example, a former President of United Steelworkers (USW) Local
513 was sentenced to six months of imprisonment, followed by two years
of probation, and was also ordered to pay restitution in the amount of
$56,014.\8\ Moreover, from the period spanning October 1, 2020, through
September 30, 2025, OLMS used information from LM reporting and other
sources to obtain convictions of 255 individuals responsible for fraud,
embezzlement, or other criminal activity involving labor union funds.
See OLMS Criminal Enforcement Actions, <a href="http://www.dol.gov/agencies/olms/criminal-enforcement">www.dol.gov/agencies/olms/criminal-enforcement</a>.
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\7\ See https://www.dol.gov/agencies/olms/criminal-enforcement/
2025#:~:text=On%20March%207,York%20District%20Office.
\8\ See <a href="https://www.justice.gov/usao-edmi/pr/former-president-ypsilanti-steelworkers-union-sentenced-stealing-58000-union-funds">https://www.justice.gov/usao-edmi/pr/former-president-ypsilanti-steelworkers-union-sentenced-stealing-58000-union-funds</a>.
---------------------------------------------------------------------------

The Form LM-2 reporting enhancements made in this rulemaking will
help OLMS more effectively enforce the LMRDA and, in doing so, better
safeguard union funds and assets, which helps strengthen the labor
movement and protect American workers. Moreover, these enhancements
will help ensure that information is reported consistent with LMRDA
objectives by providing labor organization members with useful data
that will enable them to be responsible and effective participants in
the democratic governance of their labor organizations. The changes are
designed to provide members of labor organizations with additional and
more detailed information about the financial activities of their labor
organization than is available through current reporting. The
Department believes its concurrent adjustments to the receipt filing
thresholds for Forms LM-2, LM-3 and LM-4 in this rule, by finalizing
its 2025 NPRM, 90 FR 28251 (July 1, 2025), are appropriate to moderate
the burden on labor organizations that comes with more robust reporting
and disclosure requirements.
As noted in the 2025 NPRM, the Department requires labor
organizations to file their annual financial disclosure reports through
the OLMS Electronic Forms System (EFS). The EFS, first introduced for
Form LM-2 filers in 2005, has made it easier than ever for the
regulated community to file LM reports. The EFS is an internet-based
system that enables labor organizations, their officials, employers,
and labor relations consultants to complete and electronically submit
LM reports to OLMS. When previous updates to Form LM-2 were made in the
2003 rulemaking, the EFS was not available to LM filers. Today the EFS
must be used by the labor organization filers of LM reports. The filer
accesses EFS to register for an EFS User ID and password to obtain a
User PIN, as well as edit account information or retrieve existing
passwords or User IDs. By accessing the EFS, the filer can also obtain,
work on, or sign and submit an LM form. EFS allows anyone with an
internet-connected computer to complete, sign, and electronically file
an LM form without purchasing a digital signature or downloading
special software. EFS performs all calculations for the LM reports and
completes a form error validation check prior to submission. EFS also
allows labor

[[Page 32564]]

organizations that maintain electronic accounting records to import
financial data from their accounting programs directly into the Form
LM-2 or LM-3 they are completing. The EFS's import functionality will
be available to labor organizations required to file the new Form LM-2
Long Form.
The enhancements adopted in this final rule, as more fully
described below, will ensure that information is reported in such a way
as to meet the objectives of the LMRDA. This rule builds on the LM
reporting changes made over 20 years ago with the Department's 2002
NPRM and 2003 Final Rule, as well as the 2008 NPRM and 2009 Final Rule,
which ultimately did not go into effect but put forward similar
revisions.
The core circumstances supporting the need for this rule today do
not differ from those in 2020, when the Department issued the 2020 NPRM
proposing the Form LM-2 Long Form as well as changes to the Form LM-2,
and received comments on those proposals. As of the promulgation of
this final rule, the LM reporting forms, the types of information
submitted, the gaps in reported information, and the types and scope of
identified labor organization corruption all continued to resemble the
environment in 2020. Further, while there have been technological
changes in the ensuing years, those are not substantial changes in
circumstances such that the Department would wish to issue a different
rule. OLMS maintains the same electronic reporting system, and labor
organizations file via similar software. Moreover, as explained below,
the needs identified by OLMS field investigators remain today.
Today, the Department finalizes both the 2020 NPRM and the 2025
NPRM in one combined final rule. The Department views the 2020 and 2025
NPRMs as distinct but related regulatory proposals that will function
in coordination once effective. For efficiency, the Department issues a
joint final rule that revises the Department's LM Labor Organization
Annual Financial Reports in one document after addressing significant
comments on both proposals.

b. Canvassing OLMS Field Investigators

In July and September 2019, the Department canvassed OLMS field
investigators about the benefits and drawbacks of key changes made to
Form LM-2 by the 2003 rulemaking. It also asked field investigators for
specific changes that could be made to Form LM-2 to increase
transparency and aid in investigations. The Department undertook this
canvassing in response to the 2009 proposed rule's suggestion for
additional study of the 2003 changes, such as reviewing them with OLMS
field investigators and district directors who regularly work with Form
LM-2 data and interact with stakeholders within the regulated
community. The insights obtained through canvassing OLMS field staff
helped confirm how disclosure requirements play an invaluable role in
ensuring union democracy and transparency under the LMRDA. Drawing from
their firsthand investigative experiences, field staff commented that
many of the reforms accomplished in 2003 had been helpful in uncovering
financial wrongdoing in the labor organizations subject to LMRDA
reporting requirements. Field staff also provided candid feedback on
changes regarded as less helpful. Staff also offered suggestions and
comments on additional reforms that, if implemented, could further
protect union members' rights and enhance LMRDA compliance.
The Department presented this information in the 2020 NPRM. It was
not included in the 2025 NPRM which addressed only Form LM-2, LM-3, and
LM-4 filing thresholds. The Department determined that no further
canvassing of OLMS field staff was necessary between 2019 and 2026
because Form LM-2 reporting requirements had not changed, nor had there
been substantive changes in OLMS investigation practices or in the
types of illegal conduct that LM reporting was designed to deter. OLMS
leadership is in regular contact with the agency's field personnel,
holding weekly meetings with field leadership and regularly scheduled
calls with district offices. There have been no significant changes in
investigative practices, nor in the types of illegal conduct
investigated. The collective comments provided by OLMS field personnel,
as well as public comments thereon, informed the Department's decisions
on the specific revisions included in this final rule to the Form LM-2
Long Form and Form LM-2.
The purpose of this final rule is to implement the Department's
interpretations of sections 201 and 208 of the LMRDA regarding labor
organization reports, 29 U.S.C. 431, 438, to reflect the best reading
of the statute as requiring the largest covered labor organizations to
file more detailed annual public reports with the Department and to
prevent the circumvention or evasion of the reporting requirements. The
Department's October 2009 rule stated that the Department should
consider the utility of increased reporting against the burdens it
imposes, citing legislative history about the need for government to
not impede union self-governance. The LMRDA weighs that balance heavily
in favor of ``necessary protection of the rights and interests of
employees and the public generally as they relate to the activities of
labor organizations, employers, labor relations consultants, and their
officers and representatives.'' 29 U.S.C. 401(b). The LMRDA ``is
necessary to eliminate or prevent improper practices on the part of
labor organizations'' and others. 29 U.S.C. 401(c). While this rule
changes reporting requirements for certain labor organizations, the
Department views those changes as necessary and appropriate to ensure
transparency and deter malfeasance, in an effort to prevent misconduct
before it happens. The Department views this as especially important
given that labor union criminal misconduct persists, as noted in the
section II.(a) Introduction, despite the Department's vigorous
enforcement of the LMRDA. While this final rule requires additional
union disclosures that may help deter misuse of union funds, we note
that the rule also appropriately reduces reporting obligations in areas
that have proved unhelpful in effectuating the LMRDA's purposes.
The Department also believes these changes will further union self-
governance. When implemented, this final rule will give union members
more granular information about how their elected leaders use their
funds, allowing members to better hold union officials accountable and
help ensure that the LMRDA is followed. Robust reporting regimes are
the norm under laws that apply to securities, lobbying, contributions
to political candidates, and in many other areas where voters select
officials who are charged with their trust. Greater disclosure enhances
transparency and fosters accountability. Over 100 years ago, the late
U.S. Supreme Court Justice Louis D. Brandeis observed regarding
transparency, ``Sunlight is said to be the best of disinfectants.''
Louis D. Brandeis, Other People's Money 92 (1914). Those words are as
relevant today as a century ago. The Department intends that the
heightened transparency that results from the implementation of these
LM Labor Organization Annual Report revisions will deter misconduct to
better safeguard union treasuries, helping to achieve the objectives of
the LMRDA.

[[Page 32565]]

i. Field Investigators Responses on Benefits and Drawbacks of Form LM-2
In pursuing this rulemaking, and in recognition that OLMS field
staff possess valuable knowledge of labor union financial recordkeeping
and reporting, the agency developed a framework for the purpose of
collecting field staff insights to help inform revisions to Form LM-2.
The canvassing questionnaire framework and the responses to it have
been made part of the administrative record.\9\ The canvassing
framework summarized the key changes to Form LM-2 made in 2003, and
asked field staff ``whether the changes . . . have aided or hindered
OLMS in its enforcement activities.'' See 85 FR 64731 (Oct. 13, 2020).
OLMS leadership also provided context for undertaking the canvassing by
informing field personnel that ``[w]e are looking to determine whether
the changes OLMS made to the Form LM-2 in 2003 have proven beneficial.
The document LM Form Benefits of 2003 Changes contains a description of
the changes made in 2003. Please ask your district directors to meet
with their staff. I envision each office holding a 30 minute
brainstorming session. The idea is to determine whether the new parts
of the Form LM-2, like itemization or functional categories, have
helped with investigations.'' See id.
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\9\ See DOL Canvas of Investigators, <a href="http://Regulations.gov">Regulations.gov</a> (Oct. 14,
2020), <a href="https://www.regulations.gov/document/LMSO-2020-0002-0004">https://www.regulations.gov/document/LMSO-2020-0002-0004</a>.
---------------------------------------------------------------------------

The 2019 canvassing questions included seven reporting elements on
the version of the Form LM-2 that the Department used from 2003 until
today without significant revisions. The questions addressed changes
that were implemented with the 2003 rulemaking. OLMS asked its field
investigators and managers to consider and comment on the value of
these key changes:
1. $5,000 Itemization threshold. Form LM-2 filers itemize certain
categories of receipts and disbursements of $5,000 or more, as well as
receipts and disbursements to a single entity that total $5,000 or more
in the reporting year.
2. Confidentiality Exemption. Provides labor organizations with a
procedure to avoid itemizing disbursements that may disclose the
following types of sensitive information that would:
<bullet> Identify individuals paid by the union to work in non-
union bargaining units to assist the union in organizing employees;
<bullet> Expose the reporting union's prospective organizing
strategies;
<bullet> Provide tactical advantages in negotiations;
<bullet> Reveal information pursuant to a confidentiality
agreement, or that the union is otherwise prohibited by law from
disclosing; and
<bullet> Endanger the health or safety of an individual.
3. Disbursement Categories. Disbursements are reported in five
specific categories:
<bullet> Representational Activities;
<bullet> Political Activities and Lobbying;
<bullet> Contributions, Gifts, and Grants;
<bullet> General Overhead; and
<bullet> Union Administration.
4. Functional Reporting Work Time. Form LM-2 requires unions to
estimate the time spent by each union officer and employee on different
duties, based on the categories of activities represented by the Form
LM-2 schedules and represented as a percentage of work time totaling
100%. Unions then report the portion of gross salaries for each
schedule based on the percentage of time estimates.
5. Accounts Payable/Receivable. Form LM-2 includes schedules for
reporting accounts payable and receivable, adhering to the $5,000
itemization threshold.
6. Reporting of Investments. Unions must report all investments
with a book value greater than $5,000 and that represent 5% or more of
their total investments.
7. Membership Categories. Unions are required to report the number
of members by aggregated categories, which unions can define for
reporting.
See id.
The 2020 NPRM included a summary of field personnel responses and
comments on the benefits and hindrances of the seven key changes made
to LM reporting with the 2003 rule. Neither the objectives of the LMRDA
nor the work of an OLMS field investigator (including auditing and
investigating union finances) have changed significantly since 2020.
For those reasons, the Department believes the insights OLMS field
personnel provided when canvassed in 2019 for the NPRM remain fresh and
relevant today. See Mobil Oil Corp., 35 F.3d at 584 (``If the original
record is still fresh, a new round of notice and comment might be
unnecessary.''). As such, the Department considered the results of the
canvassing, as well as the public comments received, when developing
this final rule. The Department summarizes the collective views and
insights that the canvassing revealed on each of the seven key changes.
First, concerning the $5,000 itemization threshold, the field
investigators viewed this change as extremely beneficial. They
explained that itemization not only aided embezzlement investigations
but served as a case targeting tool to help determine whether Form LM-
30 and Form LM-10 cases should be opened. One field office stated that,
``[o]f the seven changes to the Form LM-2 in 2003, the consensus is
that the $5,000 itemization threshold was the best of the seven as it
provides more transparency to the membership and can be utilized for
targeting special report investigations.'' 85 FR 64731 (Oct. 13, 2020).
One investigator noted itemization can reveal conflicts of interest
that are reportable on other LMRDA forms.\10\ Notably, no field
personnel viewed the itemization requirement as hindering OLMS
investigations.
---------------------------------------------------------------------------

\10\ Pursuant to the instructions for the Form LM-10 Employer
Report, employers must file annual reports to disclose certain
specified financial dealings with their employees, unions, union
agents, and labor relations consultants. Pursuant to the
instructions for the Form LM-30 Union Officer and Employee Report,
labor organization officers or employees (other than exclusively
clerical or custodial employees) who have directly or indirectly
held any legal or equitable interest in, received any payments from,
or engaged in any transactions or arrangements with certain
employers or businesses must file a report with OLMS. This report is
submitted on Form LM-30 and is required to make public any actual or
likely conflict between the personal financial interests of union
officers or employees and their obligations to the union and its
members. OLMS refers to Form LM-10 and LM-30 cases, along with
several other case types, as ``special reports'' cases.
---------------------------------------------------------------------------

Second, the canvassing revealed mixed views regarding the
confidentiality exemption. One investigator wrote that it ``has been a
hindrance in case targeting because it allows unions to hide
transactions under the guise that it will hurt their organizational
strategy.'' See id. Others stated that while the confidentiality
exemption likely primarily benefited only unions, they understood how
some reporting might be harmful to the unions.
The third change involved disbursement categories, that is, the
reporting of disbursements in five specified functional categories:
Representational Activities, Political Activities and Lobbying;
Contributions, Gifts and Grants; General Overhead; and Union
Administration. The canvassing revealed that field staff saw benefits
of this change but also commented on its limitations. Investigators
offered examples of being able to target audits ``based on unusual
categorization patterns.'' See id. The categories allowed them to trace
``categorized transfers between affiliates that indicated reporting or
other potential

[[Page 32566]]

LMRDA violations.'' See id. On the other hand, investigators noted that
the $5,000 itemization occurs only within each category so that
disbursements of more than $5,000 might not be itemized if the
disbursement fell under more than one category. In general, field staff
credited the functional reporting for aiding understanding of the
purposes behind labor union spending but recognized that it can hinder
investigations by concealing individual transactions because of the
$5,000 itemization threshold.
Fourth, regarding union officers and employees allocating their
time by functional categories, OLMS field personnel stated that this
change added little to no value to their investigations. They explained
that the reporting of staff time in functional categories could not be
audited, could not be enforced, and did not lead to other enforcement
activity. One field office stated, ``It provides unverifiable
disclosure information to the public.'' See id. Another stated that
``this information offers no valuable insight for case targeting'' and
``provided no benefit in criminal investigations or compliance
audits.'' See id. Another wrote, ``It is and will always be a ballpark
guess and the categories are confusing to the union and to OLMS field
staff.'' See id. at 64731-32.
Fifth, regarding accounts payable/receivable aging schedules, the
canvassing revealed that investigators viewed this change favorably as
aiding their investigations. One field office wrote that the
information is ``necessary to determine how much the union is owed/
owes'' while another believed it was ``useful to encounter
embezzlements.'' See id. at 64732.
Sixth, regarding reporting of investments, one office found it
necessary for tracking purposes on investments from year to year.
Another stated that it ``can be useful to the field and to members.''
See id. Another said, ``[t]his is useful to the extent the unions are
able to figure out how to report it. We have found corroborating
information reported here that has been useful in a criminal
investigation as well as a union officer reports case.'' See id.
Another office concluded that the information was ``good for union
members.'' See id.
The seventh change included in the canvassing was about membership
categories. Investigators found categories helpful when filers included
agency fee payers and stated categorization assists in determining the
number of active dues paying members, as it corresponds to dues
receipts. An investigator noted this is particularly helpful in trade
unions where there are different levels of membership, e.g.,
apprentices and journeymen, that pay different dues amounts. Another
investigator felt that membership categories were helpful to estimate
dues receipts and very useful in supervised election cases.
These field personnel insights helped the Department formulate this
final rule. Information collected about the Form LM-2 revealed that
OLMS field investigators favored itemization, agreeing that it both
provides transparency and aids investigations. Investigators expressed
some concern that the existing confidentiality exemption detracted from
transparency. Yet they recognized that labor unions do have valid
business needs for some confidentiality. As for the functional
reporting categories, the field investigators believed that it helped
in selecting unions for audit but reduced transparency by limiting the
number of itemized transactions. The field discerned no value in union
officers and union employees allocating their time by functional
categories. The investigators believed the accounts payable/receivable
aging schedules, as well as reporting of investments, aided in the
enforcement of the LMRDA. As for the membership categories, the
investigators found it helpful when targeting audits, estimating dues
receipts, and in overseeing supervised elections of union officers.
ii. Field Investigators' Responses on Items That Could Be Added to the
Reporting Forms
The investigators were also asked to identify any information that
was not available on Form LM-2 but would be useful to OLMS in its
mission or to union members. They were also asked to identify any
unnecessary information required on the LM-2 or on other annual
disclosure forms. The regional directors were directed to ``canvas your
district directors to identify any changes that could be made to the
Form LM-2/3/4 annual financial disclosure form. The idea is to consider
what additional information would be useful to OLMS in its mission or
to union members interested in their union's financial conditions,
operations, and activities. Conversely, if you believe that certain
information now reported on the annual disclosure forms is unnecessary,
please let us know.'' See id.
Two responses advocated removing three of the special procedures
for reporting confidential information. Under these procedures, the
following information was subject to special reporting privileges under
the confidentiality exception: (1) Information that would identify
individuals paid by the union to work in a non-union facility in order
to assist the union in organizing employees, provided that such
individuals are not employees of the union who receive more than
$10,000 in the aggregate from the union in the reporting year; (2)
information that would expose the reporting union's prospective
organizing strategy; (3) information that would provide a tactical
advantage to parties with whom the reporting union or an affiliated
union is engaged or would be engaged in contract negotiations; (4)
information pursuant to a settlement that is subject to a
confidentiality agreement, or that the union is otherwise prohibited by
law from disclosing; and (5) information in those situations where
disclosure would endanger the health or safety of an individual. The
investigator would eliminate the first three of these exceptions.
A district director recommended that the forms identify whether the
labor organization that is the subject of the report is under
trusteeship. The district director concluded this would allow easy and
immediate recognition of organizations in trusteeship.
A district director suggested adding a question that would identify
officers and employees who were paid $10,000 or more by the filing
labor organization and other labor organizations. Similarly, an
investigator suggested that OLMS add the following question to Form LM-
2: ``Has any officer who received $10,000 or more by your organization
also received $10,000 or more as an officer or employee of another
labor organization or of an employee benefit plan?'' If the answer is
``yes,'' the union would be required to complete a table listing the
name of the officer, the amount paid, and the file number of any filing
affiliate.
A regional director asked for a change in wording on a question on
Form LM-2. Instead of asking whether the labor organization had
``discovered'' a shortage of funds, the labor organization would be
asked whether the labor organization has ``experienced'' a shortage of
funds. Specifically, Form LM-2, Item 13 asked, ``During the reporting
period did the labor organization discover any loss or shortage of
funds or other assets?'' The regional director recommended changing
this sentence to read, ``[d]uring the reporting period did the labor
organization experience any loss or shortage of funds or other
assets?'' The regional director reasoned, ``Since the person embezzling
funds is often the

[[Page 32567]]

same person that completes the LM report, to ensure [false reporting]
can be used as an alternative violation/charge, these questions should
ask if the union experienced and/or discovered a loss.'' See id. at
64733.
An investigator recommended revising Form LM-3 to add a schedule
requiring the labor union to identify disbursements to employees.
Similarly, the investigator recommended that Form LM-4 require the
labor union to complete a schedule of all officers and disbursements to
officers. An investigator stated that OLMS should add a column to the
schedule of compensation to officers and employees. On the then-Form
LM-2, this would affect Schedule 11--All Officers and Disbursements to
Officers and Schedule 12--Disbursements to Employees. The column would
identify disbursements for benefits paid to the officers. The
investigator recommended that, considering these changes, then-Form LM-
2, Schedule 20--Benefits, could be eliminated.
One investigator offered that labor organizations that file Form
LM-4 should disclose the date of their next scheduled election of
officers. At the time of the canvassing, Form LM-2 and Form LM-3 filers
already reported election dates.
For then-Form LM-2, Schedule 4--Purchase of Investments and Fixed
Assets, an investigator proposed adding a column to show credit
received on purchases, such as a trade-in of an automobile.
Regarding then-Form LM-2, Item 46--On Behalf of Affiliates for
Transmittal to Them and its counterpart Item 63--To Affiliates of Funds
Collected on Their Behalf, one investigator proposed to require a
description of the types of funds being withheld and transmitted. That
investigator had the same suggestion with regard to Item 47--From
Members for Disbursements on Their Behalf and Item 64--On Behalf of
Individual Members.
A regional director recommended a number of changes, including (a)
reporting the principal employers of the union members, along with each
employer's city and state, (b) adjusting EFS so that the fiscal year
appears on the top of each page of all annual reports, (c) reporting
distributions to PAC funds and PAC fund payees, and (d) disclosing
whether a union officer or employee received compensation from another
labor union.
An investigator recommended that OLMS require reporting of
transactions on the labor organization annual report if an officer or
employee, or a spouse or minor child of the officer or employee, either
directly or indirectly held any legal or equitable interest, received
any payments, or engaged in transactions or arrangements (including
loans) of the types described in the Form LM-30 instructions.
An investigator endorsed using the IRS Principal Business or
Professional Activities Codes to answer the ``Type or Classification
(B)'' column on Schedules 14 through 19 on then-Form LM-2. As
background, the instructions for then-Form LM-2 required labor
organizations to ``[e]nter in Column (B) the type of business or job
classification of the entity or individual.'' The instructions for the
Annual Report Form 5500 included a chart of the codes which are
available online. General Instructions to Form 5500-SF, p. 23. The
investigator stated that these codes would help get more uniform
answers and prevent some of the vague and deficient answers.
An investigator recommended that union vendors should be listed
with their Employer Identification Number (EIN), a nine-digit number
that the IRS assigns to identify the tax accounts of employers and
certain others who have no employees. EINs are used by employers, sole
proprietors, corporations, partnerships, non-profit associations,
trusts, estates of decedents, government agencies, and other business
entities. The investigator explained that sham businesses often do not
have an EIN. However, multiple investigators have indicated that they
consider such sham business schemes exceedingly rare and had yet to
encounter such ploys (rather than traditional schemes involving
failures to report transactions or creating false records).
For Form LM-4, a supervisory investigator recommended requiring
labor unions to list the names of officers, as well as identifying
whether the officer is continuing in office, is a past officer, or is a
new officer. The supervisory investigator stated this would allow OLMS
to better be able to locate and contact officers of a union other than
the signers of its previous LM-4, should both of those signers leave
office. That supervisory investigator also recommended adding the date
of the next election of officers to Form LM-4, allowing OLMS to
determine any turnover in officers in a union and to aid in locating/
contacting officers of a union. The supervisory investigator stated it
would also enable OLMS to avoid scheduling an audit at a time close to
a labor union officer election.
A district director recommended eliminating a reporting exception
applicable to Item 24 of Form LM-3. The reporting exception was also
applicable to then-Form LM-2, Schedule 11--All Officers and
Disbursements to Officers and Schedule 12--Disbursements to Employees
of Form LM-2. This exception covered ``indirect disbursements for
temporary lodging (room rent charges only) or transportation by public
carrier necessary for conducting official business while the officer is
in travel status away from his or her home and principal place of
employment with [the labor] organization if payment is made by [the]
organization directly to the provider or through a credit
arrangement.'' See 85 FR 64733-34 (Oct. 13, 2020). The district
director explained that the exception is cumbersome to follow (and even
for OLMS representatives to explain to the regulated community),
unnecessary for accurate disclosure, and contrary to the procedures
applied to disclosure for the remainder of transactions reportable in
Item 24 and Schedules 11 and 12 on then-Form LM-2. By disclosing those
transactions as payments to officers or employees (rather than in more
general categories elsewhere on the reports), the public would know who
really benefited from them, the district director concluded.
Regarding then-Form LM-2, Schedule 3--Sale of Investments and Fixed
Assets and Schedule 4--Purchase of Investments and Fixed Assets, a
regional director proposed separation into two different schedules. The
regional director stated this would more easily allow for a
reconciliation of investments and fixed assets by using beginning of
year figures plus sales, minus receipts, and comparing them to end of
year figures. This could not be done using electronic data from Form
LM-2s because investments and fixed assets were combined. Two different
schedules may provide better transparency for evaluation of the
performance of investments.
An investigator suggested that automobiles purchased and sold
should be specifically identified either with a VIN or by detailed
description, similar to the requirement for land and buildings. This
would provide better transparency for vehicles as the 2003 forms
require labor organizations to report only the cost, book value, sales
price, and amount received. The investigator stated that any
extraordinary handling of a vehicle such as, for example, a sale well
below book value would be obvious.
A district director proposed removing Line (I) (estimated
percentage of time spent by the officer/employee on

[[Page 32568]]

activities that fall within Schedules 15 through 19) from then-Form LM-
2, Schedule 11--All Officers and Disbursements to Officers and Schedule
12--Disbursements to Employees. In lieu of these time estimates, the
district director recommended the addition of a more detailed breakdown
of disbursements reported to officers and employees in (1) the salaries
reported in Column D; (2) the allowances reported in Column E; (3) the
reimbursed expenses reported in Column F; and (4) other disbursements
reported in Column G.
For example, the district director continued, the report of
salaries paid to an officer/employee could be broken down and reported
in the following categories: (1) Salary, (2) lost wages, and (3)
bonuses. In another example, the reporting of reimbursed expenses paid
to an officer/employee could be reported in the following categories:
(1) Disbursements for meal expenses/entertainment, (2) disbursements
for mileage, (3) disbursements for travel expenses, and (4)
disbursements for union vehicle expenses. This additional information
on salary, allowances, reimbursed expenses, and other disbursements
would provide better transparency to union members and the public on
how union funds are being spent. Further, it was asserted this would
provide OLMS additional data for targeting potential compliance audits
and/or criminal cases.
Other suggestions included a requirement that the union report
contact phone numbers and/or email addresses for all executive
officers, require Form LM-3 filers to list all employees, and require
LM-4 filers to list all officers. An investigator recommended that a
union should provide the date of the most recent constitution and
bylaws.
Taking the OLMS field operation's observations under consideration,
along with OLMS' experiences in the administration of the 2003
reporting requirements, the Department's 2020 NPRM proposed to
establish a Form LM-2 Long Form and a revised Form LM-2.

c. Summary of Proposals

i. 2020 NPRM
Form LM-2 Long Form: New Form Proposed in 2020 NPRM
In the 2020 NPRM, the Department proposed a new Form LM-2 Long Form
to be filed by the largest labor organizations. The proposed Long Form
would track the items and schedules already established in the prior
Form LM-2 with the following changes. In new Item 3(d), the union would
report whether it was in trusteeship. New Item 10(b) would require the
labor organization to report whether certain officers or employees
received payment from another labor organization. New Item 11(c) would
ask whether the union has a separate strike fund and, if so, provide
information on the fund. A modified Item 13 would clarify that a yes
response is also required if the filer is aware the labor organization
has experienced a shortage of funds. New Item 18(b) would require
reporting of the date of the labor organization's current constitution
and bylaws.
Under the proposal, labor organizations would not be required to
allocate disbursements to officers and employees under specific
functional categories. Instead, disbursements to officers and employees
would be reported in the aggregate on new line items in Statement B,
Cash Disbursements. With this change, Statement B would include a new
Item 70--Officers and a new Item 71--Employees. These new items would
tie to Schedules 13 and 14, which are the renumbered Schedule 11--All
Officers and Disbursements to Officers and Schedule 12--Disbursements
to Employees.
For Schedule 1--Accounts Receivable and Schedule 10--Accounts
Payable, the Department proposed to reduce the burden by raising the
threshold to $7,500. Accounts below this threshold need not be
individually reported.
Under the proposal, four schedules would be divided in two and
become eight schedules. Specifically, the Department proposed to divide
Schedule 3--Sale of Investments and Fixed Assets into two schedules.
The first would be a new Schedule 3--Sale of Investments. The second
would be new Schedule 4--Sale of Fixed Assets.
In the new Schedule 3--Sale of Investments, the Department proposed
adding two new columns. The first new column, entitled ``Name and
Address of Purchaser or Financial Management Firm (A),'' would disclose
the purchasers of investments from the labor organization. A second
column ``Date of Sale (C)'' would disclose the date of the sale. The
other columns (Description (if land or buildings, give location); Cost;
Book Value; Gross Sales Price; and Amount Received) would remain the
same but would be designated with different letters, to accommodate the
two new columns.
The second part of the divided schedule would be the new Schedule
4--Sale of Fixed Assets. As in the case of new Schedule 3, the
Department proposed to add two new columns to the new Schedule 4--Sale
of Fixed Assets. The first new column entitled ``Name and Address of
Purchaser'' would disclose the purchasers of fixed assets from the
labor organization. A second column ``Date of Sale (C)'' would disclose
the date of the sale. In addition, the Department proposed that the
union would be required to identify automobiles individually by make,
model, year, and Vehicle Identification Number (VIN). This information
would be listed under the newly renamed Column B (Description).
Schedule 4 would also be divided. Schedule 4--Purchase of
Investments and Fixed Assets, required a labor organization to report
details of the purchases by the labor organization of U.S. Treasury
securities, marketable securities, other investments, and fixed assets,
including those fixed assets that were expensed. As with sale of
investments and fixed assets, the Department proposed to break this
schedule into two: New Schedule 5--Purchase of Investments and new
Schedule 6--Purchase of Fixed Assets.
In the new Schedule 5--Purchase of Investments, the Department
proposed adding two new columns. The first new column entitled ``Name
and Address of Seller or Financial Management Firm (A)'' would disclose
the identity of the seller of investments to the labor organization. A
second new column ``Date of Purchase (C)'' would disclose the date of
the purchase.
Likewise, to new Schedule 6--Purchase of Fixed Assets, the
Department proposed adding two new columns. The first new column
entitled ``Name and Address of Seller (A)'' would disclose the identity
of the seller of fixed assets to the labor organization. A second new
column ``Date of Purchase (C)'' would disclose the date of the
purchase. In addition, the Department proposed that the union would be
required to identify automobiles individually by make, model, year, and
VIN. This information would be listed under the newly renamed Column B
(Description).
The Department proposed to divide Schedule 15--Representational
Activities into two and renumber them Schedule 24 and Schedule 25. The
first would be designated new Schedule 24--Contract Negotiation and
Administration. The second would be new Schedule 25--Organizing.
In addition, Schedule 16--Political Activities and Lobbying would
be renumbered and divided into two schedules. On new Schedule 26--
Political Activities, labor organizations would report disbursements
for political activities. On new Schedule 27--

[[Page 32569]]

Lobbying, the labor organization would report lobbying disbursements.
The Department proposed two revisions to Schedule 13 & 14. First,
the Department proposed to eliminate functional reporting of union-
employee time. This would increase the readability of the form and
reduce burden on the regulated community. Second, the Department
proposed to eliminate a currently available reporting exception. This
exception is for indirect disbursements for temporary lodging or public
transportation necessary for conducting official business while the
employee is in travel status when payment is made by the labor
organization directly to the provider or through a credit arrangement.
This would provide a more accurate picture of total compensation
received by labor organization employees.
As part of the new Schedule 31--Benefits, the Department
additionally proposed that benefits information for union officers and
employees would appear next to their names on the new Schedules 13 & 14
and would no longer appear in the benefits schedule.
For the new Schedule 15--Membership Status, the Department proposed
to require reporting of retired members, as retired members do not
necessarily share the same interests nor have the same voting rights as
working members.
The Department proposed adding new schedules that coincided with
the items of cash receipts listed on Statement B. Stated otherwise, on
the prior Form LM-2, seven categories of receipts were reported as
seven aggregate, lump sums. On the proposed Form LM-2 Long Form,
reporting of those receipts would be supported by schedules. Those
schedules would represent new requirements that labor organizations
itemize the individual categories of receipts aggregated to $5,000 or
more from any one source. The labor organization would be required to
complete a separate itemization schedule for each individual or entity
from which the labor organization has received $5,000 or more. Each
transaction from that individual or entity would be accompanied by
information about the individual, the purpose of the payment, the date
of the payment, and the amount of the payment. The total amount
received from the individual or entity, both itemized and non-itemized,
would be included at the bottom of the itemized schedule. The totals
from each itemized schedule would then be added together and that
number would be entered in the appropriate item on Statement B.
Those additional schedules would correspond to the following
categories of receipts:
<bullet> Dues and Agency Fees;
<bullet> Per Capita Tax;
<bullet> Fees, Fines, Assessments, Work Permits;
<bullet> Sales of Supplies;
<bullet> Rents;
<bullet> On Behalf of Affiliates for Transmittal to Them; and
<bullet> From Members for Disbursement on Their Behalf.
The Department sought comment on whether to require a Schedule 32--
Foreign Transactions on Form LM-2 Long Form. It would require reporting
if the labor union engaged in a transaction with a foreign entity or a
foreign individual. The labor organization would report any individual
transaction, receipt or disbursement, of $5,000 or more, or total
receipts and/or disbursements from any single entity or individual that
aggregated to $5,000 or more during the reporting period derived from a
foreign entity or individual.
The Department proposed to retain its current itemization
transaction threshold. Specifically, Schedules 14 through 19 on the
prior Form LM-2 were subject to itemization. These schedules reflected
various services provided to union members by the union. All ``major''
disbursements during the reporting period in the various schedules were
separately itemized. A major disbursement included (1) any individual
disbursement of $5,000 or more; or (2) total disbursements to any
single entity or individual that aggregated to $5,000 or more during
the reporting period. All other disbursements in these schedules were
aggregated.
The Department proposed renumbering Schedules 14 through 19 as
Schedules 23 through 30. (The two extra schedules were the result of
dividing into two the schedules for Representational Activities and
Political Activities and Lobbying.) As in the prior version of Form LM-
2, under these newly renumbered schedules, all ``major'' disbursements
during the reporting period in the various categories would be
separately identified. As proposed, a major disbursement would include
(1) any individual disbursement of $5,000 or more or (2) total
disbursements to any single entity or individual that aggregated to
$5,000 or more during the reporting period. All other disbursements in
these schedules would continue to be aggregated.
The Department sought comment on whether to narrow, modify or
eliminate a confidentiality exemption for reporting certain
information. The Department also sought comment on whether to require
the disclosure of EIN for vendors with payments that trigger itemized
disclosure, and whether the Form LM-2 Long Form should include an item
asking, ``Does the Organization have a written whistleblower policy?''
Revised Form LM-2: Changes Proposed in 2020 NPRM
The Department also proposed to revise the prior Form LM-2. The
revised Form LM-2 would mirror the prior Form LM-2 except as follows.
In new Item 3(d), the union would report whether it was in trusteeship.
In new Item 10(b), the union would provide whether it has a trust and,
if so, provide information on the trust. New Item 10(c) would require
the labor organization to report whether certain officers or employees
received payment from another labor organization. New 18(b) would
require reporting of the date of the labor organization's constitution
and bylaws. A modified Item 13 would clarify that a ``yes'' response is
also required if the filer is aware the labor organization has
experienced a shortage of funds.
Under the proposal, labor organizations would not be required to
allocate disbursements to officers and employees under specific
functional categories. Instead, disbursements to officers and employees
would be reported in the aggregate on new line items in Statement B,
Cash Disbursements. With this change, Statement B would include a new
Item 70--Officers and a new Item 71--Employees. These new items would
tie to Schedules 13 and 14, which are the renumbered Schedule 11--All
Officers and Disbursements to Officers and Schedule 12--Disbursements
to Employees.
For Schedule 1--Accounts Receivable and Schedule 10--Accounts
Payable, the Department proposed as part of the revised Form LM-2
instructions to reduce the burden by raising the threshold to $7,500.
Accounts below this threshold need not be individually reported.
Under this proposal, four schedules would be divided in two and
become eight schedules. The Department proposed to divide Schedule 3--
Sale of Investments and Fixed Assets into two schedules: New Schedule
3--Sale of Investments and new Schedule 4--Sale of Fixed Assets.
In the new Schedule 3--Sale of Investments, the Department proposed
adding two new columns. The first new column, entitled ``Name and
Address of

[[Page 32570]]

Purchaser or Financial Management Firm (A),'' would disclose the
purchasers of investments from the labor organization. A second column
``Date of Sale (C)'' would disclose the date of the sale. The other
columns (Description (if land or buildings, give location); Cost; Book
Value; Gross Sales Price; and Amount Received) would remain the same
but would be designated with different letters, to accommodate the two
new columns. The other columns (Description (if land or buildings, give
location) (A); Cost (B); Book Value (C); Gross Sales Price (D); and
Amount Received (E)) would remain the same but would be designated with
different letters, to accommodate the two new columns.
The second of the two divided schedules would be the new Schedule
4--Sale of Fixed Assets. As in the case of new Schedule 3, the
Department proposed to add two new columns to the new Schedule 4--Sale
of Fixed Assets. The first new column entitled ``Name and Address of
Purchaser (A)'' would disclose the purchasers of fixed assets from the
labor organization. A second column ``Date of Sale (C)'' would disclose
the date of the sale. In addition, the Department proposed that the
union would be required to identify automobiles individually by make,
model, year, and VIN. This information would be listed under the newly
renamed Column B (Description).
Schedule 4 would also be divided. As with sale of investments and
fixed assets, the Department proposed to divide Schedule 4--Purchase of
Investments and Fixed Assets into two schedules: New Schedule 5--
Purchase of Investments and new Schedule 6--Purchase of Fixed Assets.
Schedule 4--Purchase of Investments and Fixed Assets, required a labor
organization to report details of the purchases of U.S. Treasury
securities, marketable securities, other investments, and fixed assets,
including those fixed assets that were expensed.
In the new Schedule 5--Purchase of Investments, the Department
proposed adding two new columns. The first new column entitled ``Name
and Address of Seller or Financial Management Firm (A)'' would disclose
the identity of the seller of investments to the labor organization. A
second new column ``Date of Purchase (C)'' would disclose the date of
the purchase.
Likewise, to new Schedule 6--Purchase of Fixed Assets, the
Department proposed adding two new columns. The first new column
entitled ``Name and Address of Seller (A)'' would disclose the identity
of the seller of fixed assets to the labor organization. A second new
column ``Date of Purchase (C)'' would disclose the date of the
purchase. In addition, the Department proposed that the union would be
required to identify automobiles individually by make, model, year, and
VIN. This information would be listed under the newly renamed Column B
(Description).
The Department proposed to divide Schedule 15--Representational
Activities into two schedules and renumber them Schedule 24 and
Schedule 25. The first would be designated new Schedule 24--Contract
Negotiation and Administration. The second would be new Schedule 25--
Organizing.
In addition, Schedule 16--Political Activities and Lobbying would
be renumbered and divided into two schedules. On new Schedule 26, labor
organizations would report disbursements for political activities. On
new Schedule 27, the labor organization would report lobbying
disbursements.
For Schedules 13 & 14, the Department, as part of the revised Form
LM-2 instructions, proposed to eliminate a currently available
reporting exception. This exception is for indirect disbursements for
temporary lodging or public transportation necessary for conducting
official business while the employee is in travel status when payment
is made by the labor organization directly to the provider or through a
credit arrangement.
For the new Schedule 15--Membership Status, the Department proposed
to require reporting of retired members, as retired members do not
necessarily share the same interests nor have the same voting rights as
working members.
Finally, the Department sought comment on whether to raise the
threshold for filing the revised Form LM-2 from $250,000 to $300,000.
ii. 2025 NPRM
In the 2025 NPRM, the Department proposed a change in the filing
thresholds for the Forms LM-2, LM-3, and LM-4, which would be reflected
in 29 CFR 403.4(a) and on each of the Forms and their instructions. The
Department proposed that labor organizations with $450,000 or more in
annual receipts would need to file the Form LM-2, an increase from the
previous $250,000 threshold, and labor organizations with less than
$25,000 may choose to file the Form LM-4, an increase from the previous
$10,000.

d. Comments Received

i. Comments Overview
As part of both the 2020 NPRM and the 2025 NPRM, the Department
solicited and received numerous public comments on the proposals. The
Department provided for a 60-day comment period which began upon the
publishing of the 2020 NPRM. 85 FR 64726 (Oct. 13, 2020). The
Department received 99 comments on that proposed rule. Of these 99
comments, 97 were unique and posted by the Department. Comments were
received from numerous groups representing labor organizations, labor
federations, public interest groups, employer associations, and state
policy institutes, as well as from individuals with experience as
former or current labor organization members, certified public
accountants, and other concerned citizens.
Of the 97 unique comments received, the Department considers 48 of
those comments as substantive. Thirty-three of these substantive
comments expressed general support for the 2020 NPRM, while 15 of these
substantive comments were generally opposed.
Substantive comments in support of the 2020 NPRM came from employer
associations and other groups focused on labor organization
accountability, as well as individuals who were members and officers of
labor organizations and those without labor organization affiliations.
Primarily, these comments supported the creation of the new Form LM-2
Long Form and the changes proposed to the Form LM-2 as ways to increase
labor organization financial accountability and transparency towards
its members. These comments generally viewed the proposed rule in line
with the purposes of the LMRDA, and the new sections on the Form LM-2
Long Form and the adjusted sections on the revised Form LM-2 as
necessary updates since the 2003 changes to the labor organization
annual financial reports.
Substantive comments opposed to the 2020 NPRM came from labor
organizations and labor-aligned institutions, as well as accounting
firms and individual certified public accountants (CPA) concerned with
the methodology of the LM Forms proposed in the rule. These comments
stated the Form LM-2 was already burdensome, and that in their view the
2020 NPRM proposed unnecessary additions. These comments also expressed
concern at the potential removal of protections for labor organizations
and individuals in the new forms.
The Department also provided for a 30-day comment period upon the

[[Page 32571]]

publishing of the 2025 NPRM, ending July 31, 2025. The Department
received a total of 299 comment submissions. Eleven were unique,
substantive comments filed by labor organizations, employer
associations, policy institutes, other stakeholder groups, and private
individuals; the remainder were form-letters.
Support for adjusting the thresholds was expressed by labor
organizations and associated entities. Opposition was voiced largely by
employer associations and organizations focused on union
accountability, as well as many individual commenters. Comments
offering support for raising the filing thresholds for Forms LM-2, LM-
3, and LM-4 argue that increasing the thresholds is a necessary
adjustment to reflect economic realities and inflation since the last
increase in 2003. Commenters stated that many unions, particularly
smaller ones with limited resources and membership, find the current
reporting requirements burdensome and complex, often requiring
significant time and financial investment in compliance. Proponents
believe that raising the thresholds would benefit labor organizations
by allowing them to allocate more resources towards representation and
collective bargaining, while still satisfying the need for
transparency, as they stated that unions are committed to sharing
financial information with their members. In addition, advocates
propose automatically indexing the thresholds to inflation to prevent
future discrepancies and reduce the likelihood of additional burdens
being placed on unions whose receipts do not keep up with inflation.
Comments opposed to raising the thresholds assert that doing so
would significantly undermine financial transparency and accountability
within labor organizations. Commenters state that easing reporting
requirements would diminish union members' ability to monitor how their
dues are spent, potentially enabling mismanagement and corruption to
flourish unchecked. These critics state that raising the thresholds
would exempt numerous unions from detailed financial reports, thus
obstructing OLMS' ability to identify financial misconduct, which could
harm the interests of union members lacking access to essential
financial disclosures. Opponents state that the current reporting
regime is necessary for maintaining oversight and protecting the
statutory rights of union members and view the proposal as a regression
that could promote secrecy among union leaders rather than
accountability.
ii. Policy Justification
In the 2020 NPRM, the Department sought specific comment on a
number of topics. These included the threshold for the Form LM-2,
strike funds, confidentiality exemptions, whistleblower protections,
and other forms of identifying information. The 2020 NPRM also received
numerous comments on the new Items, Schedules, and Instructions in Form
LM-2 Long Form and revised Form LM-2, as well as other potential
inclusions on both forms.
In the 2025 NPRM, the Department's proposal addressed only the
filing thresholds for Forms LM-2, LM-3, and LM-4. The Department
received numerous comments on these specific issues, as well as a few
others on other changes commenters sought as part of the 2025 NPRM.
The Department considered all of the significant comments it
received and is making targeted modifications to the final Form LM-2
Long Form and revised Form LM-2, changes to the thresholds for all
Forms, as well as minor additional changes to Forms LM-3 and LM-4.
Form LM-2 Long Form Filing Threshold
In the 2020 NPRM, the Department proposed an $8 million filing
threshold for the Form LM-2 Long Form. This threshold was based on the
Small Business Administration's (SBA) definition of a small labor
organization entity, as identified by North American Industry
Classification System (NAICS) codes. 13 CFR 121.201. In determining the
appropriate size standard for an industry, SBA considers economic
characteristics, market shares, technological changes, and historical
activity. 13 CFR 121.102. The SBA's definition of a small entity serves
as an upper bound of a small entity's annual receipts. 13 CFR 121.201.
In the 2020 NPRM, the Department proposed that filers reporting annual
receipts in excess of the SBA definition would be required to file a
Form LM-2 Long Form.
The monetary threshold in the SBA definition of a small labor
organization entity has increased since the Department promulgated the
2020 NPRM. As of the most recent data, SBA identifies $16.5 million as
the appropriate size standard for a ``small'' labor union or similar
labor organization. 13 CFR 121.201. As discussed below, the Department
does not view this as a change in core circumstances because the
Department decided it was more appropriate to rely upon a study of
itemized annual receipts in lieu of the SBA definition.
During the public comment period, the Department received two
comments supporting a higher Form LM-2 Long Form filing threshold,
eight comments supporting a lower Form LM-2 Long Form filing threshold,
and two comments supporting using the SBA definition as the threshold.
Two commenters, both labor organizations, expressed support for
increasing the Form LM-2 Long Form threshold. One commenter noted that
the ``extensive reporting requirements for organizations below [this]
limit would consume a good portion of available resources and would not
be a valuable use of resources or provide a useful source of
information'' for union members. The commenter suggested increasing the
$8 million threshold to ``at least $20,000,000 and then index[ing] for
inflation.'' Another labor organization supporting a higher Form LM-2
Long Form threshold reasoned that the SBA definition of a ``small''
labor organization serving as the Form LM-2 Long Form filing threshold
does not match with the Department's goal of bringing transparency to
the largest and most prominent labor organizations. The commenter
reasoned that using the SBA definition of a ``small'' labor
organization as the Form LM-2 Long Form threshold would capture several
mid-sized labor organizations rather than the largest and most
prominent. The commenter suggested that the Form LM-2 Long Form
threshold should be ``magnitudes of order higher than $8M so as to
truly capture only the largest organizations'' and suggested indexing
the threshold to inflation.
The Department agrees with the comments in favor of a higher filing
threshold. In creating a disclosure form for the largest and most
prominent labor organizations, the Department does not intend to
overburden mid-sized labor organizations with reporting requirements
that would require them to divert resources from core functions.
However, the Department determined that the additional transparency
brought by the Form LM-2 Long Form should be of interest and value to
members of the largest labor organizations. The Department believes
that the SBA provides an appropriate definition of a ``small'' labor
organization, but recognizes, as one commenter notes, that using the
definition of a ``small'' labor organization as the threshold for Form
LM-2 Long Form filers would capture several medium sized labor
organizations. In other words, the fact that a labor organization is
not ``small'' does not mean that the labor organization is ``large.''
In the 2020 NPRM, the Department explicitly sought

[[Page 32572]]

to capture the ``largest and most prominent'' labor organizations. 85
FR 64734 (Oct. 13, 2020). For this reason, the Department determined
that the Form LM-2 Long Form filing threshold, designed to capture the
largest organizations, must be higher than the SBA definition.
The Department does not believe that indexing the Form LM-2 Long
Form filing threshold for purely inflation is appropriate. Attaching
filing thresholds to constantly changing measures like inflation will
only create additional regulatory burden on labor organizations, as it
increases the chances that filing requirements will change from year-
to-year. This means labor organizations may have to change their
reporting and recordkeeping practices from year-to-year. Setting a
fixed threshold provides clarity and predictability for regulated labor
organizations.\11\
---------------------------------------------------------------------------

\11\ The Department, in setting a fixed threshold for the Form
LM-2 Long Form, maintains the ability to revise this threshold in
the future based on updated circumstances.
---------------------------------------------------------------------------

The eight commenters supporting a lower Form LM-2 Long Form filing
threshold generally stated that members of small to mid-sized labor
organizations deserve the same level of transparency that members of
larger unions would have with the Form LM-2 Long Form. For this reason,
five of these commenters suggested the Department should integrate the
Form LM-2 Long Form into the revised Form LM-2.
The Department disagrees with these comments. In creating the Form
LM-2 Long Form, the Department seeks to bring additional transparency
to America's largest labor organizations. While the Department
recognizes the significant benefits of transparency for members of any
sized labor organization, it also recognizes the burden imposed on
labor organizations that would be required to file a more comprehensive
form. Congress recognized the importance of balancing burden and
reporting detail when it granted the Secretary the authority to
prescribe simplified reports for labor organizations whose size would
make more detailed reporting requirements unduly burdensome. 29 U.S.C.
438. The Department believes that replacing the revised Form LM-2 with
the Form LM-2 Long Form is not aligned with the stated goal of the 2020
NPRM or the LMRDA and would create undue burden on small to medium
sized labor organizations.
A different commenter suggested that the Department should replace
all labor organization annual financial reports with the LM-2 Long
Form, reasoning that requiring different disclosure forms is burdensome
on labor organizations and those investigating union finances.
The Department also disagrees with this comment. As the commenter
recognized, ``the LM-4 form for labor organizations with less than
$10,000 in total annual receipts generally uses the same reporting
categories as the LM-2 form'' but features less detailed information.
As such, the Department disagrees that an individual investigating
union finances is under any sort of burden from differences in
disclosure forms. For a labor organization, completing a Form LM-2 Long
Form, which requires much more detailed information than the revised
Form LM-2, Form LM-3, or Form LM-4, is per se more burdensome. The
additional information reported on the Form LM-2 Long Form requires
additional time for recordkeeping and reporting as compared to the
revised Form LM-2, Form LM-3, and Form LM-4. As such, and in line with
the Department's statutory authority under the LMRDA, the Department
determined it is important to balance a labor organization's burden
with its reporting requirements. The Department believes that requiring
small labor organizations with limited resources to comply with
additional reporting requirements would be unduly burdensome.
Two other commenters suggested the Department should use a lower
threshold. One of these commenters suggested that half of Form LM-2
filers should file Form LM-2 Long Form, reasoning that small to mid-
sized unions may be more vulnerable to fraud and thus could benefit
from more transparency. The other commenter favored replacing revised
Form LM-2 with Form LM-2 Long Form for reporting simplicity but
suggested lowering the threshold to $1 million if the Department wanted
to keep a separate Form LM-2 Long Form. This commenter reasoned that
Form LM-2 already captures the largest labor organizations in the
country and that Form LM-2 filers have the resources and ability to
comply with the Form LM-2 Long Form reporting requirements.
The Department disagrees with these comments as well. The
Department recognizes that smaller labor organizations with limited
resources may be more impacted by fraud or abuse. However, the
Department believes that requiring smaller labor organizations to
divert resources from core functions to accommodate more complex
reporting requirements is both harmful to labor organizations and out
of line with the Department's clearly stated objective to bring
additional transparency to the largest and most prominent labor
organizations. Likewise, the Department disagrees with the notion that
all Form LM-2 filers are the largest labor organizations and have the
resources necessary to comply with the Form LM-2 Long Form's reporting
requirements. Absent any data or analysis indicating otherwise, which
the commenter did not provide, the Department believes that the SBA
appropriately defines a ``small'' labor organization.
Two commenters expressed support for keeping the Form LM-2 Long
Form filing threshold in line with the SBA definition. They stated that
the threshold is consistent with the Department's goal to bring
transparency to the largest and most prominent labor organizations
without overburdening smaller labor organizations. Both commenters also
noted the value of keeping consistent definitions across different
government agencies.
While the Department recognizes the value of keeping consistent
definitions across different government agencies, after considering the
comments, the Department determined that the SBA definition is not the
appropriate threshold for the Form LM-2 Long Form. While the Department
believes that SBA accurately captures the definition of a ``small''
labor organization, relying on the SBA definition would require mid-
sized labor organizations to file the Form LM-2 Long Form.\12\ Doing so
is out of line with the 2020 NPRM's stated goal.
---------------------------------------------------------------------------

\12\ The Department relies upon its reasoning in the 2003 Final
Rule in which the Department separated Form LM-2 filers into three
categories based upon annual receipts. Tier 2 filers, or those who
have annual receipts between $500,000 to $39,999,999, represent a
large portion of the ``mid-size'' labor organizations referred to
here.
---------------------------------------------------------------------------

With the understanding that Form LM-2 Long Form was designed to
capture more detailed reporting from the largest labor organizations,
the Department examined the differences in reportable information
between Form LM-2 Long Form and Form LM-2 to identify the new
schedules, items, and other categories of information that only the
largest labor organizations will have to report. From this, the
Department determined that the key distinctions between the two forms
are the new itemization requirements. There are categories of
information that may be reported in the aggregate on the revised Form
LM-2 but must now be itemized by the largest unions on the Form LM-2
Long Form. Thus, it makes sense to

[[Page 32573]]

measure the effects of that itemization on both transparency and
reporting burdens when determining which organizations should be
included as the largest organizations required to use the Form LM-2
Long Form.
The Department reasons that a labor organization gathering
significant sums of receipts through rents, the sale of supplies, and
per capita tax is likely to have a significant amount of investments,
unallocated resources or affiliated unions that would allow it to
generate significant receipts from these categories. The itemization of
those types of receipts on the Form LM-2 Long Form is new and
represents the largest change in both burden and transparency when
comparing Form LM-2 Long Form and revised Form LM-2.\13\ Since newly
itemized receipts are an appropriate proxy for both size and burden,
the Department believes it is the proper metric to inform its decision
in determining the appropriate Form LM-2 Long Form threshold.
---------------------------------------------------------------------------

\13\ For reference, the following receipt categories are not
itemized on the prior Form LM-2 or the revised Form LM-2 but would
be itemized on the Form LM-2 Long Form: Dues and Agency Fees; Per
Capita Tax; Fees, Fines, Assessments, Work Permits; Sale of
Supplies; Rents; On Behalf of Affiliates for Transmittal to Them;
and From Members for Disbursement on Their Behalf. Transactions in
these categories will be subject to itemization if the receipts from
one source total $5,000 or more.
---------------------------------------------------------------------------

To better understand the additional burden on labor organizations
who would have to itemize these receipt categories and the transparency
benefit of itemizing these receipts, the Department calculated the
total receipts each filer would have to itemize on the Form LM-2 Long
Form. The Department excluded dues and agency fees from this analysis,
as it is unlikely for most labor organizations to receive over $5,000
in dues or agency fees from a single source. The Department then
identified the median amount of receipts that would be itemized on the
Form LM-2 Long Form for filers at different filing thresholds to
measure both the burden on the labor organization and the potential
transparency benefit. Additionally, the Department calculated the
median amount of receipts that would not have to be itemized if a filer
were excluded from mandatory Form LM-2 Long Form filers as filing
thresholds increased. The Department used this metric to measure
``lost'' transparency as the threshold increased.\14\
---------------------------------------------------------------------------

\14\ The Department references the median because annual
receipts data is extremely positively skewed by labor organizations
with high annual receipts. In 2024, annual receipts data had a
skewness value of +23. Using median values rather than average
values more accurately reflects the typical value in a heavily
skewed dataset.
---------------------------------------------------------------------------

The Department conducted its analysis with publicly available
Fiscal Year (FY) 2024 filing data, the most recent year of complete
filing data at the time of its analysis.\15\ This filing data is
available at <a href="https://www.dol.gov/agencies/olms/data">https://www.dol.gov/agencies/olms/data</a>.
---------------------------------------------------------------------------

\15\ Labor organizations must file their annual reports within
ninety days after the end of each of its fiscal years. 29 U.S.C.
437. In 2024, 3,192 of 4,583 Form LM-2 filers reported a fiscal year
ending in December, meaning their fiscal year 2025 reports would not
be available until March 31, 2026.
---------------------------------------------------------------------------

At the SBA ``small'' union threshold of $16.5 million, the median
Form LM-2 Long Form filer would have to itemize an additional
$4,650,241 in receipts, roughly 15.5 percent of median total receipts
for filers reporting more than $16.5 million in annual receipts. The
Department believes this demonstrates the median labor organization
captured by a $16.5 million threshold is not generating a significant
share of its receipts from the newly itemized receipt categories. From
this, the Department reasons that a $16.5 million threshold would not
appropriately capture the largest and most prominent filers. While this
definition serves as an appropriate upper limit for a ``small'' labor
organization, the Department determined that a $16.5 million threshold
does not appropriately capture ``large'' labor organizations.
The Department examined these metrics at other thresholds,
beginning with $20 million in annual receipts and then increasing by
$10 million, up to $80 million in annual receipts. The Department's
calculations are included in the table (Table 1) below.

[[Page 32574]]

[GRAPHIC] [TIFF OMITTED] TR01JN26.012

Using these metrics, the Department determined that $40 million in
annual receipts is the appropriate filing threshold for the Form LM-2
Long Form. In its analysis of annual receipt data, the Department found
that labor organizations with above $40 million in annual receipts
report a much more significant sum of receipts from these newly
itemized categories than at any lower threshold. At a $40 million
threshold, the median filer reports $79,979,130 in total annual
receipts and $24,266,493 (roughly 30 percent of median total receipts)
in previously non-itemized receipts that would be itemized on the Form
LM-2 Long Form.
This $24.2 million figure represents a significant increase from
the $13.9 million in newly itemized receipts for the median filer at
$30 million. If the $40 million threshold were applied to 2024 filers,
99 labor organizations would have filed the Form LM-2 Long Form,
approximately the top 2% of Form LM-2 filers. The Department determined
that these metrics indicate that $40 million is the appropriate
threshold to capture the ``largest and most prominent'' labor
organizations, ensuring filing requirements are proportionate to
available resources.
The table above demonstrates that there are relatively small
transparency losses as the threshold increases from $16.5 million to
$40 million. The median filer reporting between $16.5 million and $20
million in annual receipts would have had to itemize roughly $1.5
million in previously un-itemized receipts. This figure increases to
roughly $2.2 million for filers between $20 and $30 million in annual
receipts, and roughly $2.5 million for filers between $30 and $40
million in annual receipts.
The Department notes that there is a significant increase when the
threshold is moved to $50 million. The median filer reporting between
$40 and $50 million in annual receipts would have to itemize an
additional $5.3 million in previously non-itemized receipts, more than
double when compared to the jump between $30 and $40 million in annual
receipts. This indicates that filers reporting above $40 million in

[[Page 32575]]

annual receipts are able to derive a significant amount of annual
receipts from the receipt categories itemized on the Form LM-2 Long
Form. This, combined with the significant increase in the median newly
itemized receipts at $40 million, led the Department to determine that
$40 million is the appropriate threshold for the Form LM-2 Long Form.
[GRAPHIC] [TIFF OMITTED] TR01JN26.013

Form LM-2 Threshold
As part of the 2020 NPRM, the Department sought comment on whether
to raise the threshold for filing the Form LM-2 from the 2003 $250,000
level to $300,000. 85 FR 64747 (Oct. 13, 2020). This is a continuation
of the practice of periodically assessing the appropriateness of the
filing threshold to ensure that it is relevant in terms of the current
economy and universe of labor organizations. In addition, the
Department also sought public comment in a separate 2025 NPRM for a
proposal to raise the Form LM-2 threshold to $450,000. 90 FR 28251
(July 1, 2025). Given that both NPRMs address raising the threshold,
the Department will address the public comments of both NPRMs here as
part of the final rule.
The Department's 2003 rulemaking, which last adjusted the Form LM-2
threshold, explained that the increase to a threshold of $250,000 was
intended to approximate inflation in the decade since the previous
$200,000 level. Two decades have passed since that adjustment. Over
longer horizons, inflation has substantially eroded the real value of
earlier thresholds. For example, the first increase in 1963 raised the
Form LM-2 threshold from $20,000 to $30,000. 28 FR 14383 (Dec. 27,
1963). Using the Bureau of Labor Statistic's Consumer Price Index (CPI)
Calculator, $30,000 in 1963 equates to $320,972.37 in 2026 dollars.\16\
That amount reflects a cumulative price increase of about 969.9 percent
and an average inflation rate of 3.83 percent per year. Similarly, the
$10,000 threshold established for Forms LM-3 and LM-4 in 1992 would be
$23,551.92 today. These figures demonstrate that the 2003 thresholds of
$250,000 and $10,000 required many unions with relatively modest buying
power to complete the most detailed reporting form in recent years.
---------------------------------------------------------------------------

\16\ U.S. Bureau of Labor Statistics, ``CPI Inflation
Calculator,'' available at <a href="https://www.bls.gov/data/inflation_calculator.htm">https://www.bls.gov/data/inflation_calculator.htm</a>.
---------------------------------------------------------------------------

The purpose of the LMRDA's reporting requirements is to provide
union members with sufficient information to hold their leaders
accountable. Detailed financial disclosures deter misuse of union
funds. It also enables union members to enforce the LMRDA's fiduciary
provisions and OLMS to enforce the

[[Page 32576]]

criminal provisions applicable to misuse of such funds. However, the
Department also recognizes that recordkeeping and reporting impose
costs on labor organizations. Therefore, it authorizes simplified
reports for those with comparatively small funds. As unions with
smaller receipts typically have less complex finances, it is
appropriate to relieve them of certain reporting obligations without
sacrificing transparency.
The Department received numerous comments in support of increasing
the Form LM-2 threshold. These comments from both the 2020 and 2025
NPRMs came primarily from labor organizations and accounting firms and
stated that an increase would reduce the burden on smaller filers by
responding to inflation. Opponents contended that any increase would
reduce transparency and cited, inter alia, cases of fraud in smaller
unions. On the 2020 NPRM, a few labor organizations and an accounting
firm recommended that the Department increase the threshold to $500,000
with one labor organization recommending the threshold be tied to
inflation. In response to the 2025 NPRM, a policy institute urged the
Department to anchor any increase to historical inflation and to adopt
a more moderate threshold ($350,000) than the $450,000 proposed. OLMS
has carefully weighed these competing concerns as described by the
commenters.
The 2020 NPRM sought comment on increasing the Form LM-2 threshold
to $300,000. The Department estimated that such an increase would shift
approximately 273 unions to Form LM-3 filer status at that time. The
2025 NPRM proposed a $450,000 threshold and estimated such an increase
would shift approximately 868 unions to Form LM-3 filer status at that
time. After reviewing the record, including the comments on both the
2020 and 2025 NPRMs, OLMS concludes that neither $300,000 nor $450,000
would meet the inflation-adjusted value of the 1963 threshold. Instead,
the Department adopts a $350,000 threshold for the Form LM-2. In
summary, the $350,000 figure is derived by adjusting the $30,000
threshold in 1963 to present-day dollars and rounding up to provide a
modest buffer for future inflation. As noted above, $30,000 in 1963
equates to approximately $320,972.37 today. Rounding to $350,000
ensures that labor organizations remain on consistent footing with
those that filed the first adjusted Form LM-2 in 1963 and avoids the
need for immediate further adjustments.
Specifically, in determining how to modernize the thresholds, the
Department selected the Form LM-2's 1963 threshold adjustment as a
historical baseline. Congress' 1959 enactment of the LMRDA, and its
subsequent implementing regulations of part 403 in 1960, set an initial
$20,000 receipts threshold and authorized the Secretary in section 208
to prescribe simplified reporting for smaller labor organizations. 25
FR 433 (Jan. 20, 1960). The Department exercised this delegated
authority in 1963, raising the Form LM-2 threshold to $30,000. 28 FR
14383 (Dec. 27, 1963). This was the first calibration since the LMRDA
enactment that had been made with the benefit of implementation
experience and that has reflected the Department's contemporaneous
judgment about how best to balance transparency with administrative
burden. By using the 1963 revision as the baseline, the Department
preserves the equilibrium between disclosure and burden that Congress
intended and avoids embedding later, policy-specific choices into the
inflation calculation.
This approach also satisfies the administrative requirement that
agencies provide a reasoned explanation when choosing among reasonable
alternatives. See Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto.
Ins. Co., 463 U.S. 29, 43 (1983) (requiring ``reasoned decision-
making''); see also FCC v. Fox Television Stations, Inc., 556 U.S. 502,
514 (2009) (upholding agency changes where the agency supplies a
rational explanation). The Department's decision to use the 1963 Form
LM-2 threshold as a baseline reflects a rational connection between the
problem, erosion of earlier thresholds due to inflation, and the
solution, an adjustment tied to the earliest exercise of delegated
authority.
Inflation evidence confirms the appropriateness of this choice.
According to the CPI, $30,000 in 1963 equals $320,972.37 in 2026
dollars.\17\ To minimize the need for further near-term adjustments,
the Department adopts a $350,000 Form LM-2 threshold rather than the
lower $300,000 threshold, a modest rounding upward that maintains
continuity with the scope of disclosure that Congress originally
contemplated while ensuring that unions with substantial receipts
continue to file the most detailed report. This level also responds to
commenters who urged the Department to anchor increases to historical
inflation while avoiding the broader reduction in transparency that
would result from a $450,000 threshold.
---------------------------------------------------------------------------

\17\ Id.
---------------------------------------------------------------------------

The Department examined recent filing data and found that raising
the Form LM-2 threshold to $350,000 will adjust coverage in a manner
comparable to the 2003 revision. In 2003, raising the Form LM-2
threshold from $200,000 to $250,000 reduced recordkeeping and reporting
burdens for roughly 500 labor organizations and left about 21 percent
of unions filing the Form LM-2. 68 FR at 58433 (Oct. 9, 2003). Using FY
2024 filings, OLMS estimates that increasing the threshold to $350,000
will have a similar effect: approximately 511 labor organizations
reported receipts between $250,000 and $350,000 and shifting these
unions to Form LM-3 would reduce the total percentage of Form LM-2 Long
Form and revised Form LM-2 filers from 23 percent to about 20 percent,
closely paralleling the 2003 adjustment.
Comments From 2020 NPRM
Labor organizations and associated entities made comments in
support of adjusting the Form LM-2 threshold in response to the 2020
NPRM. Opposition was voiced largely by employer associations and
organizations focused on union accountability, as well as individual
commenters.
Comments offering support for raising the filing threshold for the
Form LM-2 argued that increasing the thresholds is a necessary
adjustment to reflect economic realities and inflation since the last
increase in 2003. Commenters contended that many unions, particularly
smaller ones with limited resources and membership, have found
reporting requirements burdensome and complex, often requiring
significant time and financial investment in compliance. Proponents
believed that raising the threshold would benefit labor organizations
by allowing them to allocate more resources towards representation and
collective bargaining, while still satisfying the need for
transparency, as they stated that unions are committed to sharing
financial information with their members. In addition, advocates of
increasing the threshold proposed automatically indexing the thresholds
to inflation to prevent future discrepancies and reduce the likelihood
of additional burdens being placed on unions whose receipts do not keep
up with inflation.
Opponents to the 2020 NPRM's proposal to increase the Form LM-2
threshold contended that any increase would reduce transparency for
labor organization members who would see less detailed versions of
their union's financial transactions and records. A few of these
comments recommended the Department lower the $250,000 threshold, and
one policy institute specifically pointed to the numerous

[[Page 32577]]

enforcement actions taken by the Department as evidence of the need for
increased reporting. A major advocacy group stated that with 78.5
percent of labor organizations not meeting the LM-2 threshold set in
2003, it is unnecessary to raise the LM-2 threshold to exempt more
labor organizations. One public policy committee recommended that the
Department eliminate the Form LM-2 threshold and require all labor
organizations to file Form LM-2 and included an example form showing
how a labor organization filing Form LM-4 could easily transfer that
information to Form LM-2.
The Department has carefully considered these comments in response
to the 2020 NPRM and acknowledges that increased transparency,
resulting from detailed reporting, deters and helps detect wrongdoing.
However, the purpose of the LMRDA's reporting requirements is to
provide transparency commensurate with filers' size and financial
complexity. All LMRDA filers must preserve underlying records
sufficient to verify their reports and must permit members, for just
cause, to examine records necessary to verify those reports. See 29
U.S.C. 431(b). These statutory and regulatory protections apply whether
a union files a Form LM-2 Long Form, a revised Form LM-2, a Form LM-3,
or a Form LM-4.
Administrative cost estimates submitted as part of this final rule
indicated that preparing a full prior Form LM-2 required an estimated
344.20 hours of reporting and underlying recordkeeping. While some
commenters claim that electronic systems reduce these hours, the burden
remains for organizations with limited resources. The Department
concludes that the increase in burden on those smallest filers
outweighs the utility of those filers providing extra information to
the Department. Eliminating thresholds would contravene Congress's
intent to balance transparency with administrative feasibility, as
demonstrated by the powers granted to the Secretary in section 208 to
create simplified reports to reduce undue burden.\18\ The Department
thus concludes that a moderate threshold increase to $350,000 is
warranted for the revised Form LM-2 to prevent smaller unions from
diverting disproportionate resources toward reporting compliance.
---------------------------------------------------------------------------

\18\ See 29 U.S.C. 438.
---------------------------------------------------------------------------

Comments From 2025 NPRM
Numerous large labor organizations stated that the Form LM-2
threshold has not been adjusted since 2003 and thus fails to accurately
reflect inflation. These commenters stated that smaller unions often
have limited staff and resources and that preparing a Form LM-2
requires more time and accounting expertise than preparing Forms LM-3
or LM-4. Supporters also note that unions with receipts just above the
then-current thresholds often spend a substantial share of their
budgets on compliance rather than member services. Some commenters
stated that many unions already provide detailed financial information
to their members through internal newsletters, IRS Form 990 filings, or
audited financial statements, so a modest increase in the Form LM-2
threshold would not materially reduce transparency.
The LMRDA authorizes the Secretary to require ``[e]very labor
organization'' to file reports but also grants discretion to
``prescribe such simplified and different reports'' for organizations
who by ``virtue of their size'' a ``detailed report would be unduly
burdensome.'' 29 U.S.C. 438. The size of a union for whom a simplified
report is appropriate may be identified by a comparatively small number
of members or comparatively small amount of funds. The previous
three[hyphen]tier reporting system (Forms LM-2, LM-3, and LM-4)
reflected that discretion; it permitted detailed Form LM-2 filings for
larger unions and simplified forms for smaller ones. Supporters of the
proposed rule correctly observed that the Form LM-2 threshold of
$250,000 in receipts was last revised in 2003. Consumer price index
data show that $250,000 in 2003 dollars is roughly equivalent to about
$449,621 in 2026 dollars. Inflation therefore supports an increase.
Nonetheless, one of the LMRDA's primary purposes is to ``eliminate
or prevent improper practices'' by ensuring financial transparency. An
overly large increase in threshold would ill serve this purpose. It
might excuse the reporting of transactions that indicate improper
practices. On the other hand, the statute contains an express provision
that enables the Secretary to avoid imposing undue burden on unions of
small size. By imposing a threshold that imposes undue burden, the
Secretary would ill serve this second purpose. In selecting a $350,000
threshold rather than the proposed $450,000 threshold for the revised
Form LM-2, the Department balances these two prongs of the statute's
objectives.\19\
---------------------------------------------------------------------------

\19\ See generally 29 U.S.C. 438 (``The Secretary shall have
authority to issue, amend, and rescind rules and regulations
prescribing the form and publication of reports required to be filed
under this title . . . as he may find necessary to prevent the
circumvention or evasion of such reporting requirements . . . [T]he
Secretary shall prescribe by general rule simplified reports for
labor organizations or employers for whom he finds that by virtue of
their size a detailed report would be unduly burdensome'').
---------------------------------------------------------------------------

An analysis of FY 2024 OLMS filing data indicates that a $350,000
threshold reduces the number of Form LM-2 filers by approximately 511
labor organizations (instead of about 868 at $450,000) and increases
the number of Form LM-3 filers by the same amount. Even with 511 fewer
labor organizations filing the Form LM-2 at the $350,000 threshold,
approximately 90 percent of all annual receipts reported to OLMS would
still be reported on the more detailed revised Form LM-2. The
Department also notes that some unions, approximately 161 filers,\20\
file Form LM-2 voluntarily, despite not reaching that form's
thresholds, either because it is required by their constitutions and
bylaws or otherwise preferable for informing their members. Similarly,
unions under trusteeship are required to file Form LM-2, no matter
whether their receipts meet the threshold. 29 CFR 403.5(c). Further,
the Department presumes that many unions on the cusp of the threshold
will choose, for planning purposes throughout the year, to maintain
recordkeeping and reporting systems so that they are able to complete
the more complex form. This would prevent an unexpected increase in
receipts, which would elevate the union above the revised Form LM-2
threshold, from requiring the union to recover or reconstruct records
that could have been maintained in the first instance. And unions are
permitted by law to file more detailed reports than the threshold
levels dictate. Unions still subject to revised Form LM-2 reporting
will continue to itemize receipts and disbursements, ensuring the
availability of detailed financial information, and unions with fewer
receipts have fewer transactions to report, thus reducing the need for
added reporting detail.
---------------------------------------------------------------------------

\20\ This estimate is based on fiscal year 2025 data from Form
LM-2s received from labor organizations with less than $249,999 but
more than $0 in receipts.
---------------------------------------------------------------------------

Two large labor organizations urged the Department to raise the
Form LM-2 threshold above $450,000 or to index the threshold
automatically to account for inflation. Commenters argue that without
automatic indexing, the threshold will again erode over time and
require repeated rulemaking. One of the commenters suggests a Form LM-2
threshold of $600,000 to reflect the roughly 75 percent increase in
price levels since 2003. Another commenter supports indexing but did
not specify a higher amount. In contrast, several

[[Page 32578]]

opponents contend that automatic indexing would lead to unmanageable
increases and erode transparency.
The Department declines to adopt automatic indexing, as it does not
reflect a careful balancing between the twin goals of union
transparency and prevention of undue burden on unions. As to the level
of the threshold, the Department agrees that inflation warrants an
increase but remains mindful of the transparency concerns expressed by
other commenters. A $600,000 threshold would exempt an additional 377
unions beyond those 868 captured by a $450,000 threshold (totaling
1,245 labor organizations) from filing the revised Form LM-2, which
would constitute a quarter of all LM-2 filers, based on FY 2024 data. A
$350,000 threshold better balances the reduction in burden with the
need for public oversight.
In opposition to raising this threshold, numerous public policy
organizations, state policy institutes, business-side labor entities,
and individual commenters argued that raising the threshold will reduce
oversight and risk more fraud. Commenters point to the LMRDA's history
as a response to corruption uncovered by the McClellan Committee and
cited recent criminal cases where union officers embezzled funds. One
national institute stated that raising the Form LM-2 threshold to
$450,000 could impact over 1.25 million union members. Two commenters
argued that electronic filing and accounting software have reduced
burdens, making a higher threshold unnecessary. Some commenters suggest
that raising the threshold would shield misappropriation of union
assets; others claim it would contravene congressional intent.
The Department has carefully considered commenters' transparency
concerns. The Department acknowledges that, as a general matter,
increased transparency, resulting from detailed reporting, deters and
helps detect wrongdoing. It has thus taken the comments into account by
selecting a lower threshold than proposed, ensuring that a majority of
unions cited in these examples remain subject to Form LM-2 reporting.
However, additional reporting detail provides little benefit to smaller
unions that have few, if any, transactions.
Additionally, the LMRDA grants the Secretary authorization to
provide labor organization transparency commensurate with the
organization's size and financial complexity. Administrative cost
estimates submitted as part of the rulemaking, including those cited in
the 2024 information collection request (ICR) supporting statement,
indicate that preparing a full prior Form LM-2 required an estimated
530 hours of reporting hours of reporting and underlying recordkeeping.
While some commenters claim that electronic systems reduce these hours,
the burden remains significant for organizations with limited staff.
The Department thus concludes that a moderate increase in the Form LM-2
reporting threshold is warranted to prevent small unions from diverting
disproportionate resources toward reporting compliance.
A few of these national policy institutes and legal defense
foundations advocated for eliminating thresholds entirely, contending
that every union should file a Form LM-2 report because small unions
can also experience fraud. Commenters argue that electronic filing has
reduced burdens to the point where the distinction between LM forms is
unnecessary. Several commenters asked the Department to adopt a zero
threshold or uniform reporting.
The LMRDA authorizes the Secretary to prescribe simplified reports
for smaller unions. Eliminating thresholds would contravene Congress's
intent to balance transparency with administrative feasibility, as
demonstrated by the powers granted to the Secretary in section 208 to
create simplified reports to reduce undue burden.\21\ Evidence in the
comment record indicates that even with electronic filing, preparing a
Form LM-2 report can impose burdens that may be disproportionate for
small unions. Although small unions would have very little information
to report in the revised Form LM-2, and would necessarily leave many
entries and schedules blank, the burden of reviewing the instructions
and completing the report would remain. It would also fall on the
officers of the union to do this work, as they would not have the
resources to hire outside attorneys and accountants. See Labor
Organization Annual Financial Reports: LM Form Revisions, 85 FR 64726,
64748 fn. 25 (Nov. 13, 2020) (discussing use of accountants and
attorneys in completing the Form LM-2). The final $350,000 threshold
ensures that unions with substantial receipts, those most susceptible
to mismanagement of member funds and in which the more detailed
reporting can better provide transparency, remain subject to detailed
reporting, while smaller unions can use simplified forms. The
Department therefore declines to adopt a uniform or zero threshold
reporting requirement.
---------------------------------------------------------------------------

\21\ See 29 U.S.C. 438.
---------------------------------------------------------------------------

Form LM-3 Threshold
The 2025 NPRM also sought comment on raising the Form LM-3
threshold from $10,000 to $25,000. 90 FR 28251 (July 1, 2025). Several
unions supported an increase, noting that the $10,000 level has
remained unchanged since 1992 and that inflation would justify a far
higher amount. Conversely, opponents cautioned that raising the
threshold could permit more substantial unions to file the Form LM-4,
limiting the amount of information available to the public. The
Department adopts the proposed $25,000 threshold for two reasons.
First, the Department must balance paperwork and recordkeeping
burden with transparency in union operations. The simpler the form, the
less information is available. The more information that is made
available, the more paperwork and recordkeeping unions must manage. In
balancing these two interests, the Department concludes that increasing
the Form LM-3 threshold to the full inflation-adjusted value from 1992
would not unduly reduce transparency. While exempting more small unions
that maintain marginal financial operations, a threshold increase to
$25,000 alleviates burden on the smallest unions, while also ensuring
organizations with more than $25,000 in receipts continue to file at
least Form LM-3.
Second, the comment record reflects that submissions focused
overwhelmingly on the Form LM-2 threshold; comparatively few commenters
addressed the Form LM-3 threshold, and those that opposed any increase
generally did so on broad transparency grounds rather than identifying
defects specific to Form LM-3. The $10,000 Form LM-3 threshold has
remained unchanged since Form LM-4 was established in 1992.\22\
Adjusting that figure for inflation yields a present-day value of
approximately $22,500. Setting the threshold at $25,000 therefore
represents a modest rounding that relieves reporting burdens on the
smallest labor organizations which may file the Form LM-4 while
ensuring that entities with more than modest receipts continue to file
Form LM-3. Adopting this threshold aligns with the Department's
rationale to modernize thresholds in proportion to inflation, reducing
burden without materially affecting public disclosure.
---------------------------------------------------------------------------

\22\ See supra note 3.

---------------------------------------------------------------------------

[[Page 32579]]

Form LM-4 Threshold
The 2025 NPRM also sought comment on raising the Form LM-4
threshold from receipts less than $10,000 to less than $25,000. 90 FR
28251 (July 1, 2025). The Department did not receive any substantive
comments related to raising the Form LM-4 filing threshold.
Strike Funds
In the 2020 NPRM, the Department proposed that the Form LM-2 Long
Form would include a new and distinct question about strike funds in
Item 11. The Department proposed Item 11(c), which would ask, ``During
the reporting period did the labor organization have a separate strike
fund?'' Filers would need to answer either ``Yes'' or ``No'', and those
labor organizations that answered ``Yes'' would be required to provide,
in Item 75--Additional Information, the amount of funds in the strike
fund as of the close of the reporting period.
Many commenters expressed support for requiring disclosure of a
strike fund's existence and balance. One commenter emphasized that
``fundamentally something that goes to the very heart of the
collective'' should be disclosed to members. A policy organization
explained that ``employees should not be used simply as unwitting pawns
in negotiations; they deserve to be able to make informed decisions
when voting on a strike.'' Another public policy organization noted
that without this disclosure, ``union members could vote to strike,
only to discover that their union lacks the funding to financially
support them.'' Several commenters cited a UAW strike against General
Motors, where workers received only $250 per week in strike pay
(equivalent to $6.25 per hour), despite the union holding a strike fund
exceeding $760 million. Other commenters recommended this disclosure
should apply to all Form LM-2 filers, not just those filing the Form
LM-2 Long Form, as workers in smaller unions have equal need for this
information.
Several commenters opposed the inclusion of this question in the
Form LM-2 Long Form. Several labor organizations and accounting firms,
as well as a labor-aligned public policy group, offered arguments
against Item 11(c) and the requirements around reporting a separate
strike fund. These commenters emphasized that the disclosure of a
strike fund would benefit employers who would have information on the
labor organization during bargaining negotiations or any other
disagreement with a labor organization. Commenters stated that this
could lead to employers simply waiting out a strike if they knew the
strike fund would not last or using the knowledge of the strike fund to
force a collective bargaining agreement that was more advantageous to
the employer. Some further argued that this would disincentivize labor
organizations and their members from voting to strike, and overall hurt
members who may work under a worse negotiated contract.
Two accounting firms additionally noted that strike funds, whether
a part of the general treasury or maintained separately, are already
accounted for in Form LM-2 as part of a larger pool of funds. The firms
stated the requirement to disclose a separate account would lead to
inconsistent application based on the location of the strike fund, as
those kept in the general treasury would not require disclosure.
Overall, commenters in opposition felt that the Department lacked
justification for breaking out the strike fund since the funds would
already be considered in an OLMS investigation. The commenters stated
the Department could not explain when this would be helpful. Some
commenters disagreed with the Department's conclusion that this would
help with investigations, while others stated that any help it would
provide to OLMS investigators was outweighed by the cost it bore on
labor organizations.
After a review of the comments from the 2020 NPRM, the Department
has decided to eliminate proposed Item 11(c) from the Form LM-2 Long
Form and will not require the disclosure of the amount in the strike
fund in the additional information section. The Department concludes
that Item 11(c) would not properly balance the need for transparency
with a labor organization's interests during collective bargaining.
In the 2020 NPRM, the Department noted two instances in which labor
organization officers embezzled money from the union's strike fund.
Commenters in support of Item 11(c) provided additional examples in
which union strike funds were misappropriated and stated that strike
funds can be a source of, and may obscure, potential fraud or
embezzlement. While the Department agrees this is a concern, the
Department concludes that requiring disclosure of the total funds in a
separate strike fund would not meaningfully address this issue.
Numerous commenters stated that the disclosure of a strike fund is
a benefit to the labor organization members, as they would understand
the potential implications of a strike on their pay and benefits, as
well as being able to know if the union has a large strike fund that is
not going to members. The Department recognizes the importance of
transparency for members of labor organizations, but it also notes that
the potential benefits to a member are outweighed by the harm a
publicly disclosed strike fund would cause. As previously noted, an
employer's knowledge of a strike fund could easily influence
negotiation strategy with a labor organization, and the knowledge of a
poorly funded strike fund could lead to more aggressive tactics that
result in a less-beneficial contract for union members. In this
instance, the Department concludes the harm to members at the
bargaining table outweighs the additional transparency benefit.
Another common comment requested that Item 11(c) on strike funds
also be extended to revised Form LM-2. One commenter raised the
proposition of more detailed questions to Item 11(c), including the
number of strikers compensated, the length of the strike, and the use
of the strike fund in compensation. The Department did not propose this
change to Form LM-2. Further, since the Department is already removing
Item 11(c) from Form LM-2 Long Form for the reasons stated above, there
is no reason for it to be included on revised Form LM-2 or to expand
the number of disclosure requirements for a strike fund.
Foreign Transactions
As part of the 2020 NPRM, the Department sought comment on
establishing a Schedule 32--Foreign Transactions on Form LM-2 Long Form
if the labor organization engaged in a transaction with a foreign
entity or a foreign individual. The labor organization would be
required to report any individual transaction of $5,000 or more from a
foreign entity or foreign individual, and total receipts and/or total
disbursements from any single foreign entity or foreign individual that
aggregates to $5,000 or more during the reporting period.
The Department received numerous comments supporting the inclusion
of a foreign transactions schedule into Form LM-2 Long Form. Most of
these comments emphasized the importance of this schedule for
transparency and greater understanding of where the funds a labor
organization may have or spend originate from. One supportive comment
also agreed with the Department's reasoning that this information would
help highlight potential outsourcing. Outsourcing remains a vital
concern for American

[[Page 32580]]

workers, and labor organization members deserve full knowledge of any
transactions that may put their jobs at risk.
Given these supportive comments, and the continued need to allow
members of labor organizations to monitor their union's transactions
with foreign entities and individuals, the Department will include
Schedule 32--Foreign Transactions in the newly created Form LM-2 Long
Form. It was very difficult to find itemized transactions with foreign
entities or individuals on the prior Form LM-2. The largest labor
organizations that are most likely to engage in foreign transactions
traditionally filed prior Form LM-2, which contained, at times,
thousands of transactions with different businesses, labor
organizations, entities, and individuals. When a large labor
organization filed its prior Form LM-2 in EFS, there was a requirement
to provide the name and address of any entity or individual with whom
the labor organization had a single transaction of $5,000 or more, or
transactions that aggregated $5,000 or more. However, if that entity or
individual was in a foreign country, the labor organization only needed
to report the street address and city for that entity or individual.
Because of the differences in format between addresses in the United
States and addresses in foreign nations, the prior Form LM-2 did not
ask for the actual country in which the address was located. This made
it difficult for the average member to find a transaction with a
foreign entity or individual without combing through thousands of
transactions or knowing the exact city in which the entity or
individual was located.
Though the Department proposed this itemization requirement for
receipts of $5,000 or more or receipts that aggregated to $5,000 or
more, the Department is requiring a labor organization to report
itemized transactions for both disbursements and receipts. The 2020
NPRM asked for comments on overall transactions and referenced the
importance of both, as it noted these transactions would appear in the
functional disbursement Schedules 24-30, and shared examples of large
labor organizations sending funds to outside unions, law firms, and
consultants at foreign addresses. The Department believes both
disbursements and receipts of the labor organization are important for
a member's understanding and thus requires a labor organization to
track both in Schedule 32.
The Department received comments from labor organizations and
accounting firms that stated Schedule 32--Foreign Transactions is
unnecessary because it reports transactions already covered by the Form
LM-2 Long Form in the functional categories. The Department disagrees.
While Schedule 32 would cover transactions already reported, this
schedule is meant to highlight those transactions rather than introduce
entirely new categories. This schedule is necessary to ensure that
union members can clearly and easily find these foreign transactions
and overall increases the transparency of the labor organization. The
labor organization that is transacting with a foreign entity or
individual is much more capable of separating these transactions in the
new Form LM-2 Long Form, and ensuring its members have a full view of
the relationship between their collective bargaining representative and
any foreign entities or individuals.
A few international labor organizations commented that a foreign
transactions schedule would be burdensome because they are a parent
international union to Canadian locals. They also noted specific
difficulty in recording these transactions as they may be conducted
with a foreign currency. The Department disagrees that this would be
burdensome, given that this schedule does not cover any transactions a
labor organization would not already record. International labor
organizations with Canadian locals or other locals based in a foreign
nation would not need to conduct any excess bookkeeping to track these
transactions besides separating them from transactions with domestic
vendors, as these transactions are already necessary for a complete and
accurate Form LM-2 Long Form.
The interest in these foreign transactions to labor organization
members also outweighs any potential burden. For instance, a large
international labor organization reported receipts of over $240,000 to
an affiliated Canadian labor organization for organizing efforts on its
most recent Form LM-2, which proved difficult for a member to track
amongst the numerous other transactions. Union members deserve to know
the amount sent to a foreign labor organization and should not need to
dig through hundreds of pages to see where those funds originated or
gain more context on those transactions. Here, members' interest in
union transparency outweighs any minimal increase in burden on labor
organizations.
Some commenters also proposed lowering the threshold of $5,000 for
receipts from a foreign entity or foreign individual, and one commenter
suggested that this foreign transaction schedule apply to the revised
Form LM-2 as well. While the Department understands that this could
increase transparency for members of labor organizations, it would be
too burdensome to include these transactions in lower amounts or force
smaller labor organizations to separate out these foreign transactions.
These smaller labor organizations are also far less likely to deal with
foreign entities or individuals and may have less capacity to ensure
that relevant transactions are included in a foreign transactions
schedule.
Confidentiality Exemption
Another major consideration of the 2020 NPRM was whether to modify,
narrow, or eliminate the confidentiality exemptions for the Form LM-2
Long Form and revised Form LM-2. Specifically, the Department sought
comment on this for all five confidentiality exemptions: (1)
information that would identify individuals paid by the union to work
in a non-union facility in order to assist the union in organizing
employees, provided that such individuals are not employees of the
union who receive more than $10,000 in the aggregate from the union in
the reporting year; (2) information that would expose the reporting
union's prospective organizing strategy; (3) information that would
provide a tactical advantage to parties with whom the reporting union
or an affiliated union is engaged or would be engaged in contract
negotiations; (4) information pursuant to a settlement that is subject
to a confidentiality agreement, or that the union is otherwise
prohibited by law from disclosing; and (5) information in those
situations where disclosure would endanger the health or safety of an
individual. These provisions allow for a labor organization to not
provide any itemization for a receipt or disbursement but rather count
the transactions only in the aggregate for its respective schedule.
Several commenters recommended eliminating or narrowing
confidentiality exemptions. One public policy organization stated,
``[w]e recommend the Department require labor organizations to itemize
all expenditures above the $5000 reporting threshold'' and noted that
Department investigators found the confidentiality exemption ``has been
a hindrance in case targeting because it allows unions to hide
transactions under the guise that it will hurt their organizational
strategy.'' Another policy foundation recommended retaining only

[[Page 32581]]

exemptions for information prohibited by law or a settlement agreement
or that would endanger individual safety. A separate commenter noted at
least two labor organizations operating a political fund failed to
disclose them on their prior Form LM-2s.
Several commenters objected specifically to exemptions for
confidential settlements, arguing that members have a right to know
when their dues are used to settle claims of sexual harassment,
discrimination, employment law violations, or unfair labor practice
charges. One public policy organization recommended requiring unions to
disclose the nature and amount of such settlements, noting that unions
can protect individual identities while still disclosing relevant
financial information. Multiple commenters recommended requiring
disclosure of settlement amounts, even if party names remain
confidential, particularly for settlements involving allegations
against the union as an employer. Another commenter recommended
requiring ``an itemized summary like a credit card's end of year
summary'' showing all purchases by category to provide maximum
transparency regarding union credit card use.
These confidentiality exceptions were originally included in the
Department's October 3, 2003, final rule in response to comments from
labor organizations on the Department's 2002 proposal. These exceptions
were created in 2003 in recognition that some privacy concerns
outweighed the benefit of additional transparency for itemized
disbursements. The comments on the 2020 NPRM from both large and small
labor organizations made clear that these exemptions are important to
labor organizations. These commenters expressed concern about losing
any of the five confidentiality exemptions, stating their removal would
harm a labor organization's operations.
A few comments from labor organizations stated the Department
lacked evidence to demonstrate the need to eliminate confidentiality
exemptions. A large labor organization specifically stated that there
was no specific evidence provided by the Department on widespread
abuse. However, the Department included the opinions from a few
investigators as reasoning for eliminating the exemptions, as well as
instances in which a labor organization reported high disbursement
totals while claiming confidentiality in the additional information
section. Similarly, a comment from a public policy group in opposition
to the confidentiality exemption noted cases against Boilermakers Local
154 and SEIU Local 434B in which each labor organization did not
itemize large transactions. This commenter argued that this was proof
that union officials have hidden questionable spending. However, as
noted in comments from two labor organizations, the Department can
investigate these specific expenditures claimed under confidentiality
exemptions while protecting the interests that unions have in
maintaining the transaction's confidentiality.
Numerous comments provided varying opinions on the Department's
exemption for information that would identify individuals working for
labor organizations in a non-union facility for organizing efforts,
often known as ``salts.'' Many labor organizations emphasized the
importance of this confidentiality, as it relates to their ability to
organize workplaces. Two labor organizations went further in the
defense of this exemption by stating that disclosing salts could lead
to physical danger for salts that deal with businesses tied to criminal
efforts or labor trafficking. Comments from several policy
organizations differed in opinion and determined that labor
organization members had a right to understand how much was spent on
salts. Specifically, many of these comments found this confidentiality
exemption creates transparency issues for the labor organization, both
in the potential for labor organizations to misapply this rule to hide
otherwise reportable transactions, and in preventing membership from
understanding how much the labor organization spends on organizing
efforts.
The Department has decided to maintain the confidentiality
exemption for salts. The Department believes that its investigators
have sufficient tools to investigate misuse of this exemption as
demonstrated by the Boilermakers Local 154 and SEIU Local 434B cases
identified above. The Department concludes that it is able to
effectively enforce its statutory duties related to the use of this
exemption without itemization. Further, the Department concludes that
removing this confidentiality exemption could have a negative impact on
a labor organization's business practices and organizing strategy. At
this time, the Department has decided to maintain its conclusion in the
2003 Final Rule that labor organizations have a legitimate interest in
keeping transactions related to organizing strategy, including salting,
confidential. However, the Department notes the Secretary's authority
under section 208 of the LMRDA to modify reporting requirements to
strike the appropriate balance between transparency and confidentiality
as it relates to this exemption and reserves its right to reevaluate
this balance in the future.
Many comments also focused on the Department's exemptions for
information that would expose organizing strategy and for information
that would provide a tactical advantage in negotiations. Comments from
labor organizations were protective of this exemption, noting how vital
the ability to protect organizing strategy and other potential
bargaining advantages are to labor organizations. One international
labor organization stated the elimination of protections for organizing
strategies is detrimental to a labor organization's lawful and
protected organizing efforts. Comments from those opposed to this
exemption are focused on the need for transparency for members and
concerns that labor organizations may use this to exempt non-organizing
strategy transactions.
While recognizing the potential transparency benefit, the
Department determined that its reasoning in the 2003 Final Rule is
sound that organizing strategies deserve some level of protection.
Maintaining this confidentiality exemption ensures that an employer is
likely to be able to identify any potential organizing strategies. In
addition, the protection of information related to bargaining
strategies helps provide fairer contracts between an employer and labor
organization to the benefit of that labor organization's members.
On the fourth confidentiality exemption, many policy organizations
stated that confidential settlement agreements should not be subject to
a privacy exemption. One specific public policy organization argued
that members deserve transparency on the terms and nature of all
confidential settlement agreements, and that labor organizations should
be required to disclose the nature of the charge and terms of
settlement in the additional information section as well as the legal
costs of fighting charges against the labor organization.
The Department has decided to maintain the confidentiality
exemption for confidential settlement agreements. The Department notes
that confidentiality clauses are legally binding, and the disclosure of
the terms of settlements would likely force labor organizations out of
compliance with a confidentiality clause. The Department recognizes
that labor organizations have

[[Page 32582]]

legitimate uses for confidentiality settlements and does not seek to
require them to violate these settlements.
Finally, the Department is reaffirming the confidentiality
exemption for information relevant to health and safety. Although some
policy organizations opposed all confidentiality exemptions, including
this exemption, a few public policy organizations which opposed other
confidentiality exemptions supported this exemption as necessary to
protect health and safety. The Department has determined that any
interest in transparency regarding membership does not outweigh the
need to protect individuals in dangerous situations.
Given the clear importance of these privacy concerns and because
there is no meaningful change to a labor organization's need to protect
certain transactions, the Department has determined that all five
confidentiality exemptions will remain without modification. The need
for labor organizations to avoid specifically itemizing these
transactions outweighs any benefits to labor organization members, the
public and the Department. Additionally, members of a labor
organization already have a method through which they can examine
underlying union records to evaluate if labor organizations are
appropriately using these exemptions. Section 201(c) of the LMRDA
provides that every labor organization who submits an annual financial
report is required to ``make available the information required to be
contained in such report to all its members'' so long as the member has
just cause. 29 U.S.C. 431(c). While the Department acknowledges the
concern that members may have difficulty in finding potential issues
without isolating themselves from their labor organization, this is
still a right guaranteed to all members to exercise when they can prove
just cause to examine union records.
One public policy organization suggested that the Department
require an addendum listing all spending considered confidential due to
its potential for exposing organizing strategy or providing a tactical
advantage to an employer and add a new line item to the Form LM-2 Long
Form and revised Form LM-2 labeled ``Confidential Spending.''
Similarly, a large business advocacy organization suggested that labor
organizations claiming confidentiality should provide the Department
with a detailed written justification. The Department has determined
that both these proposals would violate Section 205(a) of the LMRDA,
which requires that the contents of the reports and documents filed
with the Department be public information. 29 U.S.C. 435(a). The
Department cannot receive a report, addendum, or justification as part
of its annual financial report without making it available to the
public. This would defeat the purpose of the confidentiality
exemptions, and these proposals are not feasible alternatives.
Whistleblower Protections
The Department sought comment in the 2020 NPRM on the inclusion of
whistleblower provisions on Form LM-2 Long Form. 85 FR 6445 (Oct. 13,
2020). Specifically, the Department proposed an item on the Form LM-2
Long Form asking, ``Does the Organization have a written whistleblower
policy?'' Id. In seeking comment on this, the Department asked whether
good governance questions like this should be asked on Form LM-2 Long
Form.
As part of this proposal, the Department noted a few challenges
with this question that were also raised by comments on the 2020 NPRM
from a labor organization and an accounting firm. Specifically, these
groups stated that the question was redundant given the ample number of
laws that protect whistleblowers from retaliation, as well as the
required disclosure of whistleblower policies on the IRS Form 990.
Under Federal law, it is illegal for non-profit organizations to
retaliate against employees who expose wrongdoing regarding their
employer's financial management and accounting practices. See 18 U.S.C.
1513(e). These comments also note that many states have passed laws
protecting whistleblowers from retaliation, providing a double layer of
protection for many labor organization whistleblowers. Both the 2020
NPRM and the comments thereon noted that in Form 990, the IRS asks if
the organization has written policies on the handling of
whistleblowers. See Return of Organization Exempt From Income Tax--
Governance, Management, and Disclosure (Form 990, Part VI, Question
13). Though this question does not appear on Form 990-N or Form 990-EZ,
Form 990 is required for all tax-exempt organizations with gross
receipts greater than or equal to $200,000. See Instructions for Form
990 Return of Organization Exempt From Income Tax--General
Instructions. Since all labor organizations with gross receipts above
$40,000,000 are required to file the Form LM-2 Long Form, every labor
organization who would answer this question would also have to do so on
Form 990.
Several commenters supported requiring unions to disclose whether
they maintain written whistleblower policies. One regional industry
organization noted that ``union employees who belong to a separate
union for union staff may be covered by a collective bargaining
agreement. However, union management is not covered. A union president
can legally fire these individuals for any reason- including reporting
misconduct.''
Multiple commenters opposed the proposed whistleblower policy
disclosure requirement. Two large unions expressed support for
whistleblower protections in principle but stated that the Department
should avoid duplicating information already disclosed on IRS Form 990
and stated that the proposed requirement should be withdrawn.
Additionally, an accounting firm contended that existing federal and
state whistleblower protections already prohibit retaliation and that
incorporating such a requirement into the Department's reporting
framework would constitute government overreach into internal union
governance. Taken together, these commenters' objections centered on
two primary themes: first, that the proposal is duplicative of
reporting already mandated elsewhere, and second, that it would extend
the Department's authority into areas traditionally left to unions'
internal management.
In view of these comments, the Department has decided not to
include a whistleblower policy question as part of Form LM-2 Long Form.
While the Department certainly encourages every labor organization with
employees to retain a clearly defined whistleblower protection policy,
the Department does not see any major benefit to requiring the question
on the Form LM-2 Long Form.
The Department also agrees with the comments noting the redundancy
of this question and how it does not relate to the statutory authority
the Department enforces through OLMS. The laws protecting
whistleblowers from retaliation are not within the scope of the LMRDA,
and any potential actions taken by a labor organization against an
employee for reporting financial malfeasance would not be reviewed by
OLMS. Numerous commenters supported the inclusion of a new question of
a written whistleblower provision because they believe this policy
would serve to protect whistleblowers and increase transparency.
However, since there is already established law protecting
whistleblowers and this question would not serve to add any additional

[[Page 32583]]

protection, it provides no additional legal value to potential
whistleblowers.
While the Department encourages all labor organizations to have a
whistleblower protection policy, asking for labor organizations to
report whether it exists is redundant and can serve to confuse members
and employees of a labor organization on whether they are protected if
engaging in such activity. While many commenters hoped that an
affirmative ``yes'' to the question of a written-out whistleblower
policy would support increased reporting by employees, the Department
is concerned that a ``no'' answer would have the opposite effect. A
labor organization that answers ``no'' to the question of whether they
have a written whistleblower policy is not exempt from any federal or
state law protecting whistleblowers from retaliation, but an employee
of a labor organization may read the ``no'' as the absence of any
protection and may be more unwilling to report financial malfeasance on
the part of the labor organization.
A few commenters supportive of this provision also argue that the
inclusion of this question would have relatively little burden on Form
LM-2 Long Form filers. Even if true, the fact that it has a small
burden impact does not mean it is a necessary part of the form. The
inclusion of this question may imply that OLMS has some sort of
enforcement mechanism. The most that OLMS could investigate is whether
an individual knowingly answered falsely the question of ``Does the
Organization have a written whistleblower policy?'', and this
investigation would have nothing to do with actual whistleblower
retaliation. See 29 U.S.C. 439(b).
Following public comment, the Department has determined not to
include a whistleblower policy disclosure question on Form LM-2 Long
Form as the question could create unintended consequences without
providing significant benefit.
Additional Identifying Information
The Department received additional comments on two proposals in the
2020 NPRM related to the collection of identifying information.
First, the Department proposed that as part of the new Schedule 4--
Sale of Fixed Assets and the new Schedule 6--Purchase of Fixed Assets
for both Form LM-2 Long Form and revised Form LM-2, a union would be
required to identify automobiles individually by make, model, year, and
vehicle identification number (VIN). The Department proposed this to
allow union members to know, when considered with other available
information, if the sale or purchase of the vehicle was consistent with
fair market value.
The Department received a few comments from policy organizations in
support of the inclusion of VINs. However, most of these comments
supported the entirety of the new vehicle disclosure requirements for
both the Form LM-2 Long Form and revised Form LM-2, arguing that it
provides greater transparency to both members and investigators. The
Department believes that even without the inclusion of VINs, members
can still determine whether the labor organization sold or purchased a
vehicle at a fair market value. Investigators who may require a
vehicle's VIN as part of an investigation can receive that information
directly. The Department has determined not to require the reporting of
VINs on Form LM-2 Long Form and revised Form LM-2.
The Department also received comments from an accounting firm and
labor organization which stated that the inclusion of an individual's
name and address as part of an automobile purchase or sale could create
privacy concerns. The Department disagrees, as it was already a
requirement for labor organizations in prior Form LM-2 Schedules 14-19
to include the name and address of any individual for whom the labor
organization made a disbursement or received a receipt subject to
itemization requirements. Privacy interests for individuals are a
serious concern, but the inclusion of these details is important for
labor organization members to see any potential conflict of interest in
the sales or purchases of these vehicles at an unfair value.
The Department also invited comments on whether to require the
disclosure of the EIN for vendors that received payments of $5,000 or
more on the new Schedules 24-30 of Form LM-2 Long Form. An EIN is a
nine-digit number distributed by the IRS to any legal entity and is
generally required for any business or organization that hires
employees, operates as a partnership or corporation, or administers
certain trusts. Several policy organizations supported the proposal.
One explained this would prevent obfuscation through ``variations or
abbreviations of the organization or vendor's name that change from
year-to-year, making it difficult to track such expenditures over
time.'' A Department investigator quoted in the proposed rule noted
that ``sham businesses often do not have an EIN.'' 85 FR 64733 (Oct.
13, 2020).
The inclusion of EINs for every vendor on Schedule 24-30 of the
Form LM-2 Long Form would be overly burdensome, and as such, the
Department has decided not to include it in the final rule. An
accounting firm commented on this proposal by noting the large amount
of administrative burden this would create on labor organizations.
Another accounting firm supported this notion and added that there is
concern with the potential mismatch of EINs since there is no guarantee
that a business transacting with the labor organization will provide a
correct EIN. This comment, along with one from a labor organization,
also raised concerns that the Department would require even more
information than the IRS, which requires EINs from only select vendors
on their relevant forms.
Several commenters in support of including EINs for vendors that
meet the $5,000 transaction threshold emphasized that it would provide
transparency to union membership on the transactions made by their
labor organization. Several public policy organizations argued that
EINs prevented confusion for members trying to track transactions year
by year by creating a consistent vendor identifier rather than relying
on a potentially changing name and address. Other comments went even
further, stating that EINs could help labor organization members by
allowing them to find potential conflicts of interest in transactions
and discourage labor organizations from conducting them.
A few other organizations in support of requiring disclosures of
EINs expressed belief that the use of these identifiers would prevent
unions from reporting transactio

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