Important Financial, DOL Reports

(This article first appeared in the July/August 2019 issue of the American Postal Worker magazine) 

The primary financial officers of local and state unions – the President and Treasurer – have important legal and fiduciary responsibilities, but often when assuming office they have no prior experience handling local or state finances. Many elected local leaders are not aware of what is required by the Department of Labor (DOL).

This lack of training becomes problematic because these roles are responsible for ensuring all DOL Labor Management (LM) reports, IRS 990 reports, various tax forms and other requirements are completed and submitted timely.

Labor Management Reports

All labor unions are required to report to the DOL all revenue received for each year, as well as all expenditures for that same year. The DOL requires LM reports be filed 90 days after the end of the local’s fiscal or accounting year.

Depending on annual receipts, local unions must file one of three different LM reports. Receipts are the income from dues rebates, interest on investments, rental income and sales of union gear received during the fiscal year. Do not compute savings and investments as receipts when determining which report you must file.

DOL requires all LM reports be filed electronically:

• LM-4: Annual receipts of less than $10,000
• LM-3: Annual receipts of $10,000 to $249,999
• LM-2: Annual receipts of $250,000 or more

Form 990

Treasurers are also required to file IRS form 990, 990-EZ or 990-N annually depending on the local’s annual receipts. These forms must be filed every year by the 15th day of the 5th month after the end of the local’s fiscal year.

• 990-N ePostcards: $0-$49,999 Annual receipts / $0- $199,999 in total assets (filed electronically)
• 990 EZ: $50,000-$199,999 Annual receipts / $200,000- $499,999 in total assets (penalty for late filing)
• 990: $200,000 Annual receipts / more than $500,000 in total assets (penalty for late filing)

Officers’ Legal Duties

Fiduciary responsibility requires that the principal officers of the local are in compliance with the requirements of the Labor Management Recording Disclosure Act (LMRDA). While all of the principles outlined in the LMRDA are important, one of particular importance local leaders are required to know and understand is they have a duty to manage the funds and property of the union solely for the benefit of the union and its members, in accordance with the union’s constitution and bylaws.

Duties of treasurers include fiduciary responsibilities of the local payroll, taxes, travel, local bills and reimbursements. Treasurers are also responsible for maintaining records, minutes, local membership and mailing lists, and the local constitution & bylaws.

Training Available

To assist local and state officers in complying with LMRDA provisions and legal requirements, training sessions can be offered during the state and regional meetings where many local and state officials are in attendance. These training opportunities would accommodate locals who would not normally be able to afford to attend a national training seminar.

Local and state officers in charge of setting up the regional and state meetings are encouraged to contact the Secretary-Treasurer’s office to schedule a training program.

Between the addition of state and regional seminars, webinar training is available to primary financial officers of local and state unions. All that is required to participate is a high speed internet connection, a speakerphone, and a comfortable place to view a computer monitor or projector screen. Web training sessions will last two hours or less.

Secretary-Treasurer Webinar Training Topics:

• Fiduciary Responsibilities of Union Officers
• New Officers’ Training & Responsibilities
• LM Reporting
• Local Union Elections
• Department of Labor & IRS Requirements and Audits
• Travel & Expenses Policy
• Recording-Secretary Duties
• COPA Funds
• Trustee Training
• Renting vs. Owning
• Budgeting
• Tax-Exempt Status
• Local Constitutions
• Compensation for Union Officers and Members
• Union Policies and Procedures