On May 30, 2019, the Department of Labor’s (DOL) Office of Labor-Management Standards published a Notice of Proposed Rulemaking to establish a Form T-1 to require annual reporting on financial information pertinent to “trusts in which a labor organization is interested.” The DOL is proposing this form because it believes this information has largely gone unreported despite the significant impact such trusts have on a labor organization’s financial operations and their members’ interests. The proposal is part of the DOL’s continuing effort to better accomplish the reporting requirements of the Labor-Management Reporting and Disclosure Act (LMRDA).
The DOL proposes to require labor organizations with total annual receipts of $250,000 or more to file a Form T-1, Trust Annual Report, under certain circumstances, for each section 3(l) trust, as defined by the LMRDA. Under the proposed rule, the Form T-1 reporting requirements are triggered when the labor organization during the reporting period, either alone or in combination with other labor organizations, either selects or appoints the majority of the members of the trust’s governing board, or contributes more than 50 percent of the trust’s receipts. As proposed, the Form T-1 must be filed within 90 days of the labor organization’s fiscal year. No filing extensions are available under the proposed rule.
The DOL specifically requested comments in regards to exempting certain trusts from the reporting requirement, such as employee benefit plans subject to the Employee Retirement Income Security Act, and financial institutions such as credit unions subject to the Federal Credit Union Act.
Comments on the proposed rule were accepted until July 29, 2019. If approved, the final rule will take effect no less than 30 days after its publication. At the earliest, no report will be due until 15 months after the rule’s effective date.
Legacy Professionals LLP prepared and submitted comments which addressed the exemptions for certain entities, the approach for multiple labor organizations interested in the same trust, and overall comments addressing the reporting burdens by the proposed rule. The DOL will spend the next few weeks considering all comments submitted. Copies of submitted comments may be reviewed by searching “RIN1245-AA09” at www.regulations.gov.