A Guide for New Union
Officers
Congratulations on becoming a union officer! You
have been entrusted with many important duties and responsibilities. The Office
of Labor-Management Standards (OLMS) of the U.S. Department of Labor has
prepared this guide to help you properly carry out some of these duties. OLMS
enforces certain provisions of the Labor-Management Reporting and Disclosure
Act of 1959, as amended (LMRDA), which guarantees rights to union members and
imposes responsibilities on union officers. The LMRDA establishes a bill of
rights for union members; reporting requirements for unions, union officers,
and union employees; standards for the election of union officers; and
safeguards for protecting union funds and assets.
This guide includes general information regarding
LMRDA requirements that apply to unions and union officers and offers
suggestions on how to comply with these requirements. Although this guide is
designed primarily for newly elected presidents and financial officers, it
should be helpful to all new officers.
Unions Must File Annual
Financial Reports
The
LMRDA requires unions to file financial reports annually with OLMS. Unions with
annual receipts of $200,000 or more (and those under trusteeship) must file
Form LM-2. Unions with annual receipts less than $200,000 may file the shorter
Form LM-3, and unions with annual receipts less than $10,000 may
file
Form LM-4. Annual financial reports must be signed by the president and
treasurer or corresponding principal officers and are due within 90 days after
the end of your union's fiscal year.
Unions
must make annual financial reports available to their members and permit
members to examine supporting records for just cause.
The
reports and documents filed with OLMS are public information and any person may
examine them or obtain copies from OLMS offices.
When you
take office, ensure that your union is up-to-date in filing Form LM-2, LM-3, or
LM-4 annual financial reports, and that a copy of the last report is in your union’s files.
If your
union is not up-to-date in filing its annual financial report, you are
responsible for filing the required report immediately. If you need a copy of
your union’s most recently filed
financial report or blank reporting forms and instructions, contact the nearest
OLMS field office.
In the
last month of your union’s fiscal year, OLMS will mail blank reporting forms
and instructions to the address on your union’s most recently filed form. Notify OLMS if your union changes its
address so that your union will receive the forms in a timely manner.
When
completing your annual financial report, gather records well before the due
date and review the instructions thoroughly to make sure that you complete the
report properly. If you have any questions, call OLMS.
Check
your union’s constitution and bylaws to review any other requirements regarding
financial reporting. Also contact any former officers or your union’s parent
body to determine if your union is required to file reports with the IRS.
Unions Must Maintain Certain Records
The
LMRDA requires unions to maintain the records necessary to verify the reports
filed with OLMS for at least five years after the reports are filed.
As a
general rule, all types of records used in the normal course of doing business
must be maintained such as receipts and disbursements journals, cancelled
checks, bank records, dues collection receipts, vendor receipts, credit card
slips, meeting minutes, etc.
If your
union has an established recordkeeping system, review it thoroughly and, if
necessary, check with prior officers on how records are maintained. Become familiar with the types of records
your union maintains, including those needed to complete your annual financial
report.
Find out
if your national or international union has any specific recordkeeping forms or
requirements, including any handbooks or other guidance material.
Unions
Must Safeguard Funds and Assets
The
LMRDA imposes a duty on union officers to manage the funds and property of the
union solely for the benefit of the union in accordance with its
constitution and bylaws.
A union
may not have loans to any officer or employee that in total exceed $2,000 at
any time.
A union
officer or employee who embezzles union funds or other assets commits a federal
crime punishable by a fine and/or imprisonment.
Individuals who have been convicted of certain crimes listed in the
LMRDA may not hold union office or employment for up to 13 years after their
conviction.
Use a
system of checks and balances to insure that one person is not solely
responsible for all financial transactions. For example, require that two
officers sign all checks and do not sign checks before the date, payee, and
amount are entered.
Review
current practices for collecting dues and other receipts to insure that all
receipts are recorded in union books and records, member dues are deposited in
the bank on a timely basis, and deposits are properly recorded.
Confirm
that all expenditures are authorized in accordance with your union’s
constitution and bylaws and are properly recorded in membership/executive board
minutes and union disbursement books and records.
Remove
any former officers’ names from union bank accounts.
Conduct
an inventory of union assets to determine if they match prior inventory and
union records of purchases and sales.
Have
trustees or an audit committee conduct periodic audits and report to the membership.
The OLMS publication Conducting Audits in Small Unions: A Guide for Trustees is available from the
nearest OLMS field office.
If you
discover a possible misuse of union funds, contact your national or
international union or OLMS.
Unions Must Be Bonded
The LMRDA requires officers and employees of unions
with property and annual receipts of more than $5,000 to be bonded if they
handle union funds or property. Handling funds is not limited to physical
contact with money. For example, a person who has the authority to sign checks
or redeem certificates of deposit is considered to be handling funds.
The
minimum bonding amount for each covered officer or employee is 10 percent of
the funds handled by the official and his or her predecessor, if any,
during the preceding fiscal year. For a
new local union, the bond must be at least $1,000.
Bonding
coverage required by the LMRDA is limited to protection against financial loss
arising from fraudulent or dishonest acts, including larceny, theft, and embezzlement.
The
required bond must be obtained from a company on the U.S. Treasury Department
list of approved bonding companies. The bond may not have a deductible since that is a form of prohibited
self-insurance.
If you
are an officer of a newly formed union, contact your national or international
union to see if it obtains bonding coverage for its locals. If not, obtain adequate bonding coverage.
If you
are a newly elected officer of an established union, determine if the amount of
your union’s bond is adequate. If not, increase coverage immediately.
Confirm
that your union’s bond covers losses caused by fraud or dishonesty by each
bonded person.
Unions Must Conduct
Fair Elections of Officers
Local
unions must elect their officers by secret ballot at least every three years.
Officer
elections must be conducted in accordance with the provisions of your union’s
constitution and bylaws as long as they comply with the LMRDA.
Every
member in good standing has the right to nominate candidates, to be a candidate
subject to reasonable qualifications uniformly imposed, and to support and vote for the candidates of the member’s
choice.
Unions
must mail a notice of election to every member at the member’s last known home
address at least 15 days prior to the election.
Union
and employer assets, including funds, equipment, and property, may not be used
to promote the candidacy of any candidate. However, union funds may be used for reasonable expenses
necessary to run an election.
Review
your union’s constitution and bylaws well ahead of the scheduled election and
determine your responsibilities and the time frames for conducting all aspects of nominations and the election.
Update
your union’s membership mailing list regularly.
Inform
officers and employees of your union of the LMRDA prohibition against using
union funds for campaign purposes, including campaigning on union time.
Request
a copy of Conducting Local Union Officer Elections: A Guide for Election
Officials from the nearest OLMS field office for use by those who will be conducting the upcoming election.
Unions Must Allow Members to
Exercise Their LMRDA
Rights
Union
members have safeguards against improper discipline, equal rights to
participate in union activities, freedom of speech and assembly with other members, and safeguards against improper
dues increases.
Union
members and non-member employees have the right to receive or inspect copies of
collective bargaining agreements.
It is
unlawful to use force or violence against union members who are exercising
their rights under the LMRDA.