The Department of Labor has proposed new financial reporting rules for unions that are overly burdensome and are designed to weaken unions.

• While unions support reasonable financial disclosure requirements for all types of organizations, the Department of Labor has proposed burdensome new requirements that will not lead to meaningful disclosure of financial information to members. Instead, this proposal will require unions to dump massive amounts of minute information into the department’s database at a huge expense and will not create a coherent or accurate picture of the union’s finances.
• These new rules are politically motivated. The National Right to Work Committee and other anti-worker groups are pushing these onerous new rules, just as they did under the first Bush administration. In fact, the official in charge of the office responsible for the rules in the first Bush administration denounced them when he resigned.
• There is no big grassroots push among union members for these changes. In fact, the comments that the Labor Department has received are running two-to-one against the new rules.
• The Department of Labor has refused to incorporate unions’ suggestions in the proposal.

The rules go beyond what is required of other not-for-profit groups or corporations.

• Unions already submit more extensive reports on their income and expenditures called “LM-2” reports. The Labor Department is not proposing to monitor LM-2s more closely—they are proposing an entirely new set of rules.
• Unions already report much more information than do corporations, such as staff salaries and detailed, categorical spending. This disparity will mushroom under the new rules.

The new rules are onerous and are designed to tie unions’ hands.

• The new rules will apply to all unions with annual receipts of at least $200,000—approximately 5,500 labor organizations, only about 70 of which are large, international unions. The rest are local unions, many of which rely on volunteers to keep accounts and file reports.
• Unions will be required to track and itemize every payment to a group or person that reaches a certain threshold, probably between $2,000 and $5,000, and report it in categories. If a number of payments to one payee in a year add up to meet the threshold, then they all must be reported, too.
• One union—the Air Line Pilots—estimates the reporting under the new rules would result in 15,863 pages of data or about five-and-a-half feet of paper each year. Such extensive reporting leaves less money and time available for contract negotiations, grievance handling, organizing and other core union activities.
• The Labor Department’s proposal would reveal the details of union finances to employers and union-busting companies, violating their privacy and putting unions at a disadvantage at the bargaining table and in all their financial transactions. It also could reveal such confidential information as employee withholdings and the names of members who are behind in their dues.