Labor organizations covered by the Labor-Management Reporting and Disclosure Act (LMRDA), and similar statutes, must file annual financial disclosure reports, specifically, Forms LM-2, LM-3, or LM-4 with The Office of Labor-Management Standards’ (OLMS). These reports are required to be made available for review by any interested party. OLMS created a public Internet disclosure system that provides public access to filed labor organization reports and to a searchable database of information for those reports.
Since 2005, The Office of Labor-Management Standards’ (OLMS) has required the largest labor organizations (those with $250,000 or more in total annual receipts), to submit their financial disclosure form, the Form LM-2 electronically. OLMS has permitted, but not required smaller unions, those that file the Form LM-3 and Form LM-4 to file electronic reports. Under the new rule, OLMS will require all these filers to file electronically.
The Benefits to Electronic Filing:
To file electronically, labor unions use the Electronic Forms System, which allows anyone with a web-enabled computer to complete, sign, and electronically file without any cost and without downloading special software.
There are many benefits to electronic filing. Electronic reporting contains error checking and trapping functionality, as well as online, context-sensitive help, which improves the completeness and accuracy of the reporting. Electronic filing is more efficient for reporting entities, results in more immediate availability of the reports on the agency’s public disclosure website, and improves the efficiency of OLMS in processing the reports and in reviewing them for reporting compliance. In contrast, paper reports must be scanned and processed for data entry before they can be posted online for disclosure, which delays their availability for public review.
Exemptions:
OLMS will provide a process for all labor union filers to apply for a temporary hardship exemption, whereby filers may apply for additional time to complete the report electronically, provided that they temporarily submit paper forms in the interim. Additionally, Form LM-3 and LM-4 filers can apply for a continuing hardship exemption, which permits filers to delay electronic filing for as long as a year. Previously, the largest unions, filers of Form LM-2, were also permitted a continuing hardship exemption, but this option has been eliminated.
The mandatory Form LM-3 and Form LM-4 electronic filing, as well as the changes to the Form LM-2 hardship process, will be applicable to fiscal years beginning on or after January 1, 2017.
Should you have any questions about electronic filing or any other law that may affect your business, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.
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