# Labor Organization Annual Financial Reports

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A2026-10849

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** June 1, 2026
- **Citation:** 91 FR 32556

## Text

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.

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
olms-public@dol.gov.

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

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

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 https://olmsapps.dol.gov/olpdr/
) on its public-facing website,
www.dol.gov/agencies/olms,
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.

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).

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).

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.

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.

2

Reginfo.gov
, Spring 2021, RIN 1245-AA10,
https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202104&RIN=1245-AA10.

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

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.

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

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

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

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,
www.dol.gov/agencies/olms/criminal-enforcement.

7

See https://www.dol.gov/agencies/olms/criminal-enforcement/2025#:~:text=On%20March%207,York%20District%20Office.

8

See https://www.justice.gov/usao-edmi/pr/former-president-ypsilanti-steelworkers-union-sentenced-stealing-58000-union-funds.

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

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.

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.

9

See
DOL Canvas of Investigators,
Regulations.gov
(Oct. 14, 2020),
https://www.regulations.gov/document/LMSO-2020-0002-0004.

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:

• Identify individuals paid by the union to work in non-union bargaining units to assist the union in organizing employees;

• Expose the reporting union's prospective organizing strategies;

• Provide tactical advantages in negotiations;

• Reveal information pursuant to a confidentiality agreement, or that the union is otherwise prohibited by law from disclosing; and

• Endanger the health or safety of an individual.

3. Disbursement Categories. Disbursements are reported in five specific categories:

• Representational Activities;

• Political Activities and Lobbying;

• Contributions, Gifts, and Grants;

• General Overhead; and

• 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

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

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

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—

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:

• Dues and Agency Fees;

• Per Capita Tax;

• Fees, Fines, Assessments, Work Permits;

• Sales of Supplies;

• Rents;

• On Behalf of Affiliates for Transmittal to Them; and

• 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

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

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

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.
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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 vulnerab

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2026-10849. Public record. Not legal advice.