Olms interpretative Manual
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CONTENTSOFANNUALREPORT:SALARYANDDISBURSEMENTSTOOFFICERSANDEMPLOYEES 214.501LMRDA,SECTION201(b)(3) . . . salary, allowances, and other direct or indirect disbursements (including reimbursedexpenses)toeachofficerandalsotoeachemployeewho,duringsuchfiscal year,receivedmorethan $10,000 in the aggregate from such labor organization and any other labor organizationaffiliatedwithit orwithwhichit isaffiliated, orwhichisaffiliated withthe samenationalor international labor organization; . . .214.505 See Instructions for LM-2, Schedules 11 and 12.SeeInstructions for LM-3, 24, 45, 46 See Instructions for LM-4, Item 18(TechnicalRevisions:Dec.2016) 214.510OFFICERSRECEIVINGLESSTHAN$10,000 The salaries of allofficersof labor organizations must be reported, but only the salaries ofemployeeswho receive more than $10,000 in the aggregate must be reported.Any otherconstruction ofthissectionwouldmakethewords“also to” as used in thissection superfluous.If the $10,000 limitation had been intended to apply to both officers andemployees, we wouldexpect the section to read, “to each officer and employee who received more than $10,000.”Butthe words “also to” create two separate reporting categories: (1) officers, and (2) employees whoreceivemore than $10,000. 214.520ALLOWANCES If “allowance” payments by the union are to a representative who is an officer of the labororganization, they are reportable under (E), Schedule 11, of the LM-2, Labor OrganizationAnnual Report.If “allowance” payments are to a representative who is not an officer of thelabor organization but is an employee of the labor organization, they are reportable under (E),Schedule 12 in Columns D-G if his total compensation from all affiliated labor organizations(salary, expenses, and other direct or indirect payments) is more than $10,000, and on the TotalsReceivedBy Employees Making Less than $10,000 Lineif $10,000 or less. (TechnicalRevisions:Dec. 2016) 214.530BUSINESSREPRESENTATIVESEXPENSES The law does not limit the amount of expenditures of union funds by businessrepresentatives.It leaves the establishment of such a limit to the organization.All suchexpenditures, however, must be reported in the union’s annual financial report.With publicityavailable on the amount, the membership can act, if they wish, to set limits.Similarly, a unionmay, if it wishes, and if the constitution and bylaws permit, contract with its businessrepresentatives to pay part or all of their personal expenses.Such expenditures must also bereportedbytheunioninits annual financial reports. 214.540FUNDSFORDEFENSEOFUNIONOFFICER Where a union makes payments to a law firm for legal fees occasioned by the legal defenseof one of its officers, the disbursement of such funds must be shown on the LM-2 as an expenseor allowance to the officer and may not be shown as an organizational expense to the union. Theunion argument that because of persecution of union officials the possibility of a criminal actionis an inherent risk of union office and therefore the allocation of funds for the defense of a unionofficerisintheinterestofthe union, isnot a valid argument. 214.550POLITICALCONTRIBUTIONS If a labor organization makes contributions to the political campaign fund of one of its ownor even some other labor organization's officers or employees, it must report them under eithersections201(b)(3) or 201(b)(6)ofthis law. NOTE:This opiniondoes notpass uponthe legality ofsuchcontributionsunderanyotherlaw. 214.560DISBURSEMENTSFORTIMESPENTONUNIONBUSINESS Under section 201(b)(3) of the Act, the "salary, allowances, and other direct or indirectdisbursements . . . to each officer . . . " must be reported.Even though disbursements to officersfor "lost time” and "payments to officers for union business" may be repayment for lost incomewhile performing in the role of a shop chairman, they nevertheless are direct disbursements to anofficer when the shop chairman is also an officer of the union.Under the circumstances, suchpayments to shop chairmen who are also officers must be reported.In Form LM-2 reports, suchdisbursements should be reported in Schedule 11, and should be taken into account in calculatingamounts of disbursements reported in Statement B.In Form LM-3 reports, such disbursementsshould be reported in Item 24 "All Officers and Disbursements to Officers," and identified inItem45, "ToOfficers.” "Lost time" disbursements which are made to a shop chairman who is not also an officershould also be reported.In Form LM-2 reports, such disbursements should again be taken intoaccount in reporting amounts in Statement B, and should be reported in Schedule 12 as explainedin the instructions for Form LM-2 reports.In Form LM-3 reports, such disbursements must beincluded in Item 46, "To Employees."Include disbursement to individuals other than officerswho receive lost time payments even if your organization does not consider them to beemployeesor does not make anyother direct or indirect disbursementsto them. (Revised:Dec.2016andApril2017) PERSONALTRANSPORTATIONEXPENSES An elected union officer whose official duties and responsibilities are principally at the unionheadquartersinCityXmaintainshis"legalresidence"or"home" inCityY,300milesaway fromthe union headquarters. Travel each weekend to his home in City Y at union expense by publictransportation is not the type of transportation expense covered in Schedule 11 of the Instructionsfor Labor Organization Annual Report, LM-2, which permits the union to enter in a generalcategory the expenses for the transportation by public carrier of an officer on official businessifpayment was made to the public carrier or their agents by the reporting organization eitherdirectly or through its credit arrangements. For purposes of reporting on Form LM-2, the officeris not considered to be on official business when he travels to his "legal residence" 300 milesaway from his principal place of work and abode. Therefore, the union must report the paymentfor transportation expenses in Schedule 11 (All Officers and Disbursements to Officers) of FormLM-2 in Column G (Other Disbursements) rather than reporting the transportation expendituresinageneralcategoryofunionexpenses. DISBURSEMENTSFORFOODANDREFRESHMENTS Disbursements by a union for food and refreshments for the union's officers, employees, andotherindividuals mustbereportedontheLM-2inaccordancewiththefollowingrules: Direct and indirect disbursements to officers and employees for their food and refreshmentswhen the disbursements are necessary for conducting official union business must be reported incolumnFof Schedule11 or 12, asappropriate, of the LM-2. Direct and indirect disbursements to officers and employees for their food and refreshmentswhen the disbursements are not necessary for conducting official union business, but areessentiallyforthe personalbenefit ofthe officersand employees,mustbereportedincolumnGofSchedule11or12,asappropriate,oftheLM-2. Indirectdisbursementsforfoodandrefreshmentsatgeneralmembershipgatheringsshouldbereportedin Schedule18and Item53ofthe LM-2. Indirect disbursements for food and refreshments for the entertainment of individuals otherthan officers and employees on official union business may be reported in Schedule 18 and Item53 of the LM-2. If the disbursements are made directly to an officer or employee to reimbursehim for the expenditure, they must be reported in column F of Schedule 11 or 12, as appropriate,of the LM-2. Manual entries 214.572 through 214.577 provide specific examples to illustrate these generalrules. See also the Instructions for Schedules 11 and 12 of the LM-2.(TechnicalRevisions:Dec. 2016) DINNERMEETINGOFOFFICERS The officers of union A meet to dinner in order to discuss business to be conducted at aregular monthly membership meeting or to discuss collective bargaining proposals. The union'sdisbursements for the meals, whether direct or indirect, must be reported in column F ofSchedule 11 on the LM-2, because the general rule that a union should show in column F itsexpenditures for officers' food and refreshments which are necessary for conducting officialunion business appears to be applicable to this situation. The union's disbursements may beallocatedamong the officers. (TechnicalRevisions:Dec. 2016) FREQUENTLUNCHEONSOFOFFICERS The officers of union A go out for lunch together several times a week, during which generalunion matters are usually discussed. The bill is charged to the union's account. The frequencyand regularity of the meetings, and the fact that they take place at a time when the officers wouldotherwise normally be paying for meals themselves, appear to indicate that the meals are morefor the personal benefit of the officers rather than necessary for conducting official unionbusiness. In this case, therefore, unless it can be shown that the luncheons are actually necessaryfor conducting official union business, such disbursements of the union must be reported incolumn G of Schedule 11 of the LM-2 rather than in column F, and may be allocated among theofficers. (TechnicalRevisions:Dec. 2016) ENTERTAINMENTOFNONUNIONINDIVIDUAL The officers of union A have dinner with a journalist who is doing research for a news articleon the union. Such a meeting would ordinarily be considered official union business. Therefore,the union's disbursements for the officers' meals may be reported in column F of Schedule 11 ofthe LM-2 rather than in column G and may be allocated among the officers. The cost of thejournalist's meal may be reported in Item 53 and Schedule 18 if the union's disbursement isindirect; if a direct disbursement is made to an officer to reimburse him for paying for thejournalist's meal, it must be reported in column F of Schedule 11. This is an application of thegeneral rules that all direct and indirect disbursements to officers for their meals andentertainment which are necessary for conducting official union business must be reported incolumn F of Schedule 11, and that only indirect disbursements for the food and entertainment ofindividuals other than officers on official union business may be reported in the appropriatedisbursement schedule (LM-2 Schedules 15-19), and taken into account in the cashdisbursementsreportedinStatementB. (TechnicalRevisions:Dec.2016) GENERALMEMBERSHIPFUNCTIONS Union A has refreshments at a membership meeting or a Christmas party for its members andstaff. The union's indirect disbursements may be reported in Schedule 18 and Item 53 of the LM-2asprovidedinSectionXIoftheinstructions for completingcolumn Fof Schedule 11. (TechnicalRevisions:Dec. 2016) FREQUENTDINNERMEETINGSOFOFFICERSOFTWOUNIONS The officers of union A and union B hold regular weekly dinner meetings in order to discussgeneral matters of mutual concern. The officers of the two unions alternate in paying for themeals with their union's credit cards. The net effect of this quid pro quo arrangement is that allthe officers are getting dinners each week paid by the unions. If each union paid for its officers'meals each week, all disbursements in connection with the dinner meetings would be reported incolumn F of Schedule 11 (if the meetings are in fact necessary for conducting union business) ofthe LM-2 of each union. The fact that the officers find it more convenient to alternate in chargingthe costs to their respective unions does not change the actual nature of the situation. Therefore,eachunionmustreportincolumnForGofSchedule11ofitsLM-2alltheexpendituresforeach dinner meeting for which it pays the bill because each union's LM-2 would containmisleading information if any disbursements were reported in Item 53 and Schedule 18. Thedisbursementsmay be allocated among the officers. (TechnicalRevisions:Dec. 2016) INFREQUENTMEETINGOFOFFICERSOFTWOUNIONS The officers of union A and union B hold a meeting to discuss the strategy for a possiblestrike at a plant which employs members of both unions. Refreshments are ordered and paidthrough union A's credit card. The costs of the refreshments for union A's officers should bereported in column F of Schedule 11 because the meeting appears to be necessary for conductingunionbusinessandbecauseofthe generalrulethataunion'sdirectandindirectdisbursementsforfoodand refreshmentsfor itsofficers onofficialunion businessmustbereported incolumn Fof Schedule 11 of the LM-2; these disbursements may be allocated among the officers. Thedisbursementsfor therefreshments forunion B'sofficers, however,may bereported in Item50 and Schedule 15 because the officers would be considered to be a group other than officers andemployees of the reporting union (in accordance with Section(part XI) of the instructions forcompleting column F of Schedule 11) and because, unlike the frequent quid pro quo meetings inEntry 214.576, allowing these disbursements to be reported in the general categories would notresultinmisleadinginformation. (TechnicalRevisions:Dec.2016) 214.580PERSONALLODGINGEXPENSES Wherea unionpaysthehotelbillsofanofficerwhoduring hisworkweek residesatahotelinthe city where the union headquarters is located and which is his principal place of work but whomaintain his home and legal residence in another city, such payments must be reported asdisbursements to the officer rather than as an office or administrative expense of the union. OnForm LM-2 such payments must be reported in Schedule 11 (All Officers and Disbursements toOfficers) in column G (Other Disbursements) and not in Item 53 (Office and AdministrativeExpense). The instructions for Schedule 11 and Item 53 indicate that a union may report in Item53 the disbursements for a hotel room of an officer on official businessif payment was made tothe hotel or its agents by the union either directly or through its credit arrangements. The hotelexpenses intended to be within Item 53 are those of an officer on official union business awayfromunionheadquarters andhome;such asattending aconvention, conferring withemployers,ordirectingastrike. (TechnicalRevisions:Dec. 2016) 214.585OTHERPERSONALEXPENSES Personal expenses of officers, such as laundry, valet service or meals and beverages, paid bythe union must be reported as disbursements to officers (Item 54 - Disbursements to Officers)and may not be reported as an expense of the union (Item 53 - Office and AdministrativeExpense), even if incurred by an officer engaged in official union business. The instructions forSchedule 19 and Item 53 of LM-2 permitting a union to expense the cost of a hotel room of anofficer on official union business under some circumstances specifically refers to "expenses forhotel room" and this is intended to include onlyhotel rent. On Form LM-2 personal expensesincurred by an officer engaged in official union businessare reported in the appropriate cashdisbursement item and supporting Schedule 11 (Disbursements to Officers) in column F(Expenses Including Reimbursed Expenses). Personal expenses incurred by an officer notengaged in official union business are reported in the appropriate cash disbursement item andsupportingSchedule11incolumn G (Other Disbursements). (TechnicalRevisions:Dec.2016) 214.590EXPENSESFORACHARTEREDPLANE Where a labor organization charters a plane to transport a number of its officers andemployees to a special meeting (it having been determined that a chartered flight would cost lessthan space on a regular flight), the expenses of the charter may be allocated equally among suchofficers and employees in Schedules 11 and 12 of Form LM-2, even if the plane is booked byone officer in his name. Because a chartered flight is not transportation by "public carrier," asthat term is used in Schedule 11 of the instructions for Form LM-2, the cost of the flight may notbe shown as a regular union expense in the other disbursement schedules (Schedules 15-19)whetherornotthe unionpaidtheairlinedirectlyorthroughitscredit arrangements with the airline. (TechnicalRevisions:Dec.2016) 214.591AUTOMOBILELEASESFORPERSONALUSE The United States Court of Appeals for the Second Circuit upheld the conviction of twounion officers for violation of sections 201(b) and 209(b) and (d) of LMRDA for failing to reportas "disbursements to officers" payments of union funds for long-term automobile leases forthemselves and their friends and for gas and oil expenditures for personal use. The court statedthat, "the auto, gas and oil . . . disbursements were squarely in the category of 'disbursements toofficers' (a heading in the Local's Annual Reports), to be reported as such rather than reported, asthey were, under some other general heading such as "Disbursements --for Other Purposes' or'Officeand Administrative Expense'." UnitedStatesv.Ferrara,451F.2d91,96(2dCir.1971),cert.denied,405U.S.1032(1972). (TechnicalRevisions:Dec.2016) 214.592USEOFUNIONCAR If a union officer or employee has the use of an automobile owned or leased by the union, thecost borne by the union to operate the vehicle is considered a disbursement to the officer oremployee (Schedule 11 or 12) and may not be reported in the other disbursement schedules(Schedules 15-19).For purposes of Form LM-2 the costs borne by the union to operate theautomobilearereportedinoneofthe followingways,as appropriate: Ifthe automobileis usedsolely forofficial unionbusiness,theentirecostofoperatingthecar is treated as money disbursed indirectly to the officer or employee for the benefit ofthe organization and should be entered on the appropriate line in Column F ("ExpensesIncluding Reimbursed Expenses") of Schedule 11 ("Disbursements to Officers") orSchedule12 ("Disbursements to Employees"). If the automobile is used for bothofficial and personal business, the entire cost ofoperatingthecarisreportedinoneofthe followingways,asappropriate: The union may break down the total cost of operating the car into the amountincurred for official union business and the amount not incurred for official unionbusiness; the amount attributable to union business is reported in Column F andtheotheramount in ColumnGofSchedule11orSchedule12. Alternatively, the union may choose not to divide the total cost of operating thecar into the amounts incurred for official union business and for personal matters.In that event, if 50% or more of the use of the car is for official union business,the total cost is entered in Column F with a footnote indicating that the car wasalso used for personal business. If the official use of the car is less than 50%, thetotal cost is entered in Column G with a footnote indicating that the car was alsousedforofficial unionbusiness. If officers or employees are given the use of automobiles but they must bring the carsdaily to union headquarters where they become part of a pool of vehicles available tootherofficersandemployeesduringtheday,itmay bedifficulttoallocatethe totalcost of operating a car to a particular individual; in that event, the arrangement may bereported by an asterisk after the name of each officer or employee to whom a car wasassignedinSchedule11orSchedule12withafootnotestating:"UseofCarseeItem69." In Item 69 the union should indicate: Type of car; the year; the model; initial cost;current market value; and the nature of the arrangement, e.g., that the individual hasprivate use of the car but that it is principally for official union business and others alsouseitforthatpurpose. (TechnicalRevisions:Dec.2016) 214.593USEOFUNION-OWNEDHOUSE If a union provides an officer with the free use of a house, the yearly rental value of the housemust be reported as a disbursement to the officer.It may be reported by an asterisk after thename of the officer in Schedule 11 with a footnote stating: "Use of House—see Item .69.”InItem 69 the union would indicate that the union furnishes a house for the officer and would setforth the yearly rental value of the house. (TechnicalRevisions:Dec. 2016) 214.595EXPENSEALLOWANCENOTACTUALLYUSEDFOREXPENSES If payments to officers or employees for expense are in excess of the amounts of the actualexpensesincurred,theexcessmustbereportedassalaryorallowancesandnotasexpenses. SeealsoManualEntry214.605onadvances. Download 317.29 Kb. Do'stlaringiz bilan baham: 
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