Olms interpretative Manual

PAYMENTOFPREMIUM

537.002SEE 29CFR453.24

537.005COST OF BONDING

Since the Act does not prohibit the payment of the cost of the bonds by a trust fund oflabor organizations, the decision as to who is to bear this cost is, as noted in 29 CFR Section453.24, left to the discretion and agreement of the parties concerned in each case, subject to anylimitations imposed by law or by their organic instruments. But see Manual Entry 531.403(regardingbonding for ERISA-covered trusts).

(Revised:Dec. 2016)

537.100BONDSSECUREDBYNATIONALORINTERNATIONALFORSUBORDINATEBODIES

Section502(a)does notprohibit aninternationalorganization frompaying thepremiumforthe required bonds of its affiliatedunits.

PROHIBITIONSAGAINSTCERTAINFINANCIALAIDTOOFFICERS

1. 
   LMRDA,SECTION503
   

1. 
   Nolabor organizationshallmakedirectly orindirectly anyloan orloanstoany officeror employee of such organization which results in a total indebtedness on the part ofsuchofficeror employee to thelabororganization in excess of$2,000.
   

2. 
   No labor organization or employer shall directly or indirectly pay the fine of anyofficeror employee convicted ofany willful violation ofthis Act
   

.

3. 
   Anypersonwho willfullyviolates thissection shallbe finednot morethan $5,000orimprisoned for not more than one year, or both. See pamphlet, “Union Safeguards,”page 3.
   

540.005LIMITONLOANSAPPLIESTO SINGLEUNION

X,thePresidentofanationalorganizationofunions,obtainedloansinvariousamounts,nooneofwhich exceeded $2,000, from each of four locals affiliated with the national organization. X heldofficein each ofthese locals. Thecombined totalof theseloans was inexcess of $2,000.

Thelanguageof section503(a) doesnot appeartoprohibit loansobtained byan officerfrommore than one labor organization in amounts of $2,000 orless.