Changes to Labor Organization Annual Reporting-Digging into the Details of the Final Rule

The U.S. Department of Labor’s Office of Labor-Management Standards (OLMS) released a final rule effective July 1, 2026 that introduces a brand new Form LM-2 Long Form, revises the standard Form LM-2 and changes the filing thresholds.  Although neither the  new LM-2 Long Form nor the revised LM series return will be required to be filed until after June 30, 2027, some of the rule changes will require adjustments to internal recordkeeping starting as early as July 1, 2026 for some filers.

Threshold Changes:

Revisions to LM-2

Although the headline is the creation of the LM-2 Long Form, which will be required by just over 100 labor organizations, the revisions made to standard Form LM-2 and LM-3 filings will affect thousands more.  The changes include the following:

• Item 3(d) – Adds a specific identifier for labor organizations that are in trusteeship.
• Item 10(b) – Asks if any officer or employee receiving $10,000 or more from the labor organization is also receiving $10,000 or more from an additional labor organization. Additional disclosure of the name, dollar amount and LM file number is required with a “yes” response.
• Item 13 – Prior wording asked the labor organization if a loss or shortage was discovered during the year. Revises the wording to specifically ask if the labor organization experienced and/or discovered a loss or shortage.
• Item 18(b) – Requests the date of the labor organization’s current constitution or bylaws.
• Itemization thresholds for Schedule 1 – Accounts Receivable and Schedule 10 – Accounts Payable have been increased from $5,000 to $7,500.
• The prior Schedule 3 and Schedule 4 used to report investment and fixed asset sales and purchases have been split into four separate schedules. Itemization of all transactions of $5,000 or more is required to be reported while including the name and address of the seller or purchaser along with the date of the transaction.
• OLMS has included an exemption for individual itemization of bona fide market transactions conducted through recognized national securities exchanges from detailed itemization requirements.
• Labor organizations are no longer required to report functional time allocation percentages and compensation for officers and employees will no longer be included in functional categories.
• Removes the exemption of direct allocation of temporary lodging and travel through public carrier. Items such as hotel bills and airfare should be allocated to the officer or employee on behalf of whom the disbursement is incurred.
• Labor organizations are required to report the number of retired members on the membership status schedule.
• Representation Activities schedule has been separated into two separate categories of functional disbursements: 1) Contract Negotiation and Administration and 2) Organizing.
• Political Activities and Lobbying schedule has been separated into two separate categories of functional disbursements: 1) Political activities and 2) Lobbying.

LM-2 Long Form

The creation of the LM-2 Long Form is estimated by the OLMS to effect approximately 100 prior LM-2 filers.   The expansions to the standard LM-2 have all been incorporated in the new LM-2 Long Form.  In addition to the items noted above, the LM-2 Long Form requires the following:

• Fringe benefits (for example, welfare, pension, annuity plan contributions) paid on behalf of officers and employees are required to be included on a newly added column in Schedule 13 and 14 detailed by each individual officer and employee.
• Creates seven (7) new receipt schedules that require itemization of receipts that in the aggregate total $5,000 or more. These new schedules include:
  • Schedule 16 – Dues and Agency Fees
  • Schedule 17 – Per Capita Tax
  • Schedule 18 – Fees, Fines, Assessments, Work Permits
  • Schedule 19 – Sale of Supplies
  • Schedule 20 – Rents
  • Schedule 21 – On behalf of Affiliates for Transmittal to Them
  • Schedule 22 – From Members for Disbursements on Their Behalf
• Creates a new schedule for Foreign Transactions. Although these transactions are reportable in the various functional categories, this schedule will include itemizations of receipts and disbursements of $5,000 or more transacted with any foreign entity.

Contact your Legacy representative with questions.