On March 6, 2020, the Department of Labor’s (DOL) Office of Labor-Management Standards published a final rule establishing a Form T-1, Trust Annual Report, which requires annual reporting on financial information pertinent to “trusts in which a labor organization is interested.” The DOL believes this information has largely gone unreported despite the significant impact such trusts have on labor organizations’ financial operations and their members’ interests. The rule is part of the DOL’s continuing effort to better effectuate the reporting requirements of the Labor-Management Reporting and Disclosure Act (LMRDA).
The rule requires labor organizations with total annual receipts of $250,000 or more to file a Form T-1, under certain circumstances, for each section 3(l) trust, as defined by the LMRDA. Under the rule, the Form T-1 reporting requirements are triggered when, during the reporting period, the labor organization, either alone or in combination with other labor organizations, (1) selects or appoints the majority of the members of the trust’s governing board (“managerial dominance”), or (2) contributes more than 50 percent of the trust’s receipts (“financial dominance”). When applying this test, employer contributions to a trust made pursuant to a CBA with the union count as union contributions for purposes of determining financial dominance.
The rule is effective April 6, 2020; however, no labor organization is required to file a Form T-1 until 90 days after the conclusion of its first year that begins on or after June 4, 2020. A Form T-1 covers a trust’s most recently concluded fiscal year, and a Form T-1 is required only for a trust whose fiscal years begin on or after June 4, 2020. A trust’s “most recently concluded fiscal year” is the fiscal year beginning on or before 90 days before the filing union’s fiscal year. In other words, if a union and trust both have a calendar fiscal year ending December 31, 2021, the union would file its Form T-1 by March 31, 2023. The Form T-1 would cover the trust’s fiscal year ending December 31, 2021. That would be the trust’s most recent fiscal year that ended 90 days or more before the union’s fiscal year’s end.
Filers must submit the Form T-1 electronically to OLMS via the OLMS Electronic Forms Systems (EFS). OLMS will make the electronic form available to filers beginning on July 1, 2021.
Text of the complete final rule is located at:
DOL T-1 Final Rule
Contact your Legacy representative for additional information.
Legacy News Flash 20-3, posted March 16, 2020