Labor Department Seeks to
Improve Union Financial Reporting

Reforms Will Ensure More Transparency, Accountability to Union Members

WASHINGTON—The U.S. Department of Labor today announced that it will seek to update and improve the annual financial reports filed by the very largest labor unions, to better serve union members. The Department’s Employment Standards Administration will introduce a Notice of Proposed Rulemaking to revise the LM-2, the reporting form required for large unions under the Labor-Management Reporting and Disclosure Act of 1959. The LM-2 form has not undergone significant change since it was first promulgated more than 40 years ago.

The proposed LM-2 form will give union members more detailed information about the financial activities of their unions, in an easily understood format that will be available on the Department’s website. The new forms will be usefully organized according to the services and functions of the union, enabling members to identify major receipts and disbursements for these various activities. For the first time, union members will be able to examine financial transactions of “joint trusts” and subsidiaries managed by their unions, which currently have little or no accountability to rank-and-file members.

Enhanced disclosure will help union members better exercise their self-governance rights and detect financial mismanagement and misconduct by union officials. U.S. Labor Department investigations of union financial fraud result in an average of 11 criminal convictions a month, with a total of more than 640 convictions during the past five years.

Only the largest and most financially sophisticated unions—about 20%—will be materially affected by these proposed transparency reforms. The Department expects the burden of compliance to be substantially reduced by new reporting software it is developing for unions to use, free of charge, in preparing and filing their reports.

“Despite the increasing complexity and activity of labor unions over the years, the form used to disclose their financial information to members has remained virtually unchanged in the last 40 years,” said Victoria Lipnic, Assistant Secretary for the Employment Standards Administration. “These reforms will give union members better, more understandable information for them to judge the financial health and integrity of their unions.”

The LM-2 form was created under the Labor-Management Reporting Disclosure Act, passed by Democrats and Republicans in 1959.

As part of the proposed rulemaking, comments are invited for 60 days after publication in the Federal Register. Comments may be transmitted by email to FormLM2-comments@dol-esa.gov or by fax to (202) 693-1340.

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Archived News Release — Caution: Information may be out of date.