On June 1, the U.S. Department of Labor (DOL) finalized a rule to update its union financial reporting requirements. Based largely on a Notice of Proposed Rulemaking (NPRM) issued in 2020, the new rule is the first significant change to DOL’s union reporting forms in over twenty years.
The final rule creates a new LM-2 Long Form for the nation’s largest labor organizations, updates existing financial reporting requirements, and adjusts filing thresholds, all of which represents a meaningful step forward in promoting transparency, accountability, and trust between unions and their members.
The Form LM‑2 is the most detailed financial disclosure report that labor organizations must file under the Labor-Management Reporting and Disclosure Act (LMRDA). The report provides information about a union’s financial condition including revenues and expenditures; assets and liabilities; officer salaries and benefits; payments to vendors, contractors, and political activities; and internal financial controls and governance practices.
Historically, only the largest unions—generally those with annual receipts exceeding a certain threshold—are required to file the LM‑2, while smaller unions may submit shorter, less detailed forms (LM‑3 or LM‑4). As part of the final rule, DOL adjusted the filing thresholds for each of these forms to adjust for inflation, something the agency also proposed in a more recent NPRM issued last year.
More notably, the rule expands the LM‑2 with the new long form, requiring the largest labor organizations—those with annual receipts of $40 mil. or more—to provide more detailed, standardized disclosures. The LM-2 Long Form will apply to approximately 100 unions according to DOL’s Office of Labor-Management Standards, which oversees union financial disclosure and investigates possible criminal violations.
The rule also requires disclosure of information previously included as combined reporting categories. For example, “Representational Activities” will be split into “Contract Negotiation and Administration” and “Organizing,” and “Political Activities and Lobbying” will likewise split into separate schedules, respectively—so that union members can more easily evaluate their union’s spending and priorities.
At its core, the LMRDA is about protecting the rights of rank-and-file union members. For many decades after that law was passed, DOL’s financial filing forms did not provide much useful information, but that changed during the Bush (43) administration, when the LM-2 was expanded to give members clear, detailed insight into how their dues are spent. In an era where trust and transparency are paramount, this latest revision is a welcome step toward reinforcing confidence in the institutions that represent American workers.
About the author
Sean P. Redmond
Sean P. Redmond is Vice President, Labor Policy at the U.S. Chamber of Commerce.
