Olms interpretative Manual

PAYMENTSTOUNIONS-OFFICERS-ETC.

253.001LMRDA,SECTION203(a)(1)

. . . any payment of loan, direct or indirect, or money or other thing of value (includingreimbursed expenses), or any promise or agreement therefore, to any labor organization orofficer, agent, shop steward, or other representative of a labor organization, or employee of anylabor organization, except (A) payments or loans made by any national or State bank, creditunion, insurance company, savings and loan association or other credit institution and (B)payments of the kind referred to in section 302(c) of the Labor Management Relations Act, 1947,asamended;

253.005 PAYMENT FOR WORK NOT PERFORMEDSeeManualEntry248.200.

253.007EMPLOYER-MEMBERPAYINGDUES

Although there is no mention in section 302(c) of the LMRA of dues paid to a union by anemployer who is a member of the union, such payments need not be reported by the employerunder section 203(a)(1) of the LMRDA.It has previously been held that employers may join orretain membership in a union so long as they were not required to do so.Obviously, the right tojoin includes the obligation to pay dues.Further, while the dues are paid by employers, they arepaid by them in the capacity of union members and not in the capacity of employers.However,if the union’s constitution establishes higherdues for employers, these dues would have to bereported,since the payments are requiredfromthemas employersand notas members.

(TechnicalRevisions:Dec.2016)

253.010REIMBURSEMENTOFEMPLOYEESFORWORKPERMITCOSTS

An employer imported a number of men from local unions of a national union outside thejurisdiction of the local affiliate of that national to work on a special project within that local’sjurisdiction.Under the constitution and bylaws of the national union, such workmen wererequired to pay a charge for a work permit in the jurisdiction of the local where work wassecured.The imported workmen paid the work permit fee to the local and obtained receiptswhichweresubsequentlyturnedovertotheemployerwhoreimbursedthemenforthisexpense.

In the absence of evidence showing that such an arrangement was a scheme to achieve anindirect payment by an employer to a union, the reimbursement of the men by the employer ofthe cost of a work permit is consistent with a legitimate effort by an employer to make it moreattractivefor specializedemployees to workforhimaway from their own home base.

253.020PRESIDENTOFEMPLOYERACTINGININDIVIDUALCAPACITY

Union Officer A, whose union represents employees of X Corporation,sold his stock interestin XCorporation to Y, President of XCorporation. Ypurchased the stock in his individualcapacity.Yowns 30% of theXCorporation’sstock (the 30% includes the stock securedfromA).The purchase agreementbetween Aand Ycallsforaninitialpayment on executionof the

agreement and the balance payable in five equal annual installments. Under these circumstances,both Aand Yare required to file reports of this transaction; Yis required to report under section203(a) (1). Notwithstanding the fact that Ypurchased stock in his own individual capacity, he isconsideredan employer under section3(e) of theAct.(See Note1)
At the same time Mrs. B, wife of Union Officer B(who is also an officer of a union thatrepresentsemployeesofXCorporation),alsosoldherstockinterestinXCorporationtoYinhisindividual capacity.Under these circumstances, Union Officer B is required to report pursuantto section 202(a) (6) with regard to the payments received by his wife from Y.Yis not requiredtoreport under 203(a) (1) the paymentsmade to the wife of Union OfficerB. (See Note 2)

NOTE1:
A key official of a corporation will be held to be an employer within the meaning of section3(e) of the Act if he has the responsibility for any aspect of the employer-employeerelationship of the corporate employer, albeit he is dealing in his “individual” capacity with aunion officer.

NOTE2:
Under the specific language of section 203(a)(1) an employer need report only paymentsmade to a union officer and is not required to report payments made to a union officer and isnot required to report payments to a union officer’s wife unlessthe wife is a mere conduit forthetransmission of funds to the union officer.

(Revised:Dec.2016)

253.030 POLITICAL CONTRIBUTIONSSeeManualEntry243.400.

40. 
    LOANS TO EMPLOYEES
    

Employers are not required to report loans made to employees under circumstances andterms unrelated to the employees’ status in a labor organization, unless the Secretary, inparticular cases, requires the submission of a special report on such information.Whether aparticular loan meets the condition set forth above is, of course, a question of fact to bedeterminedineachcaseonthebasisofthepertinentcircumstances.Thesizeandtermsofaparticular loan, especially in relation to the size and terms of loans actually made to otheremployees,would be significantcircumstances in making thisdetermination.

40. 
    EMPLOYERSASGUARANTOROFOFFICERLOAN
    

An employer who guarantees payment of a bank loan made to a labor organizationrepresentative is required to report this since it constitutes an “other thing of value” to therecipient within the meaning of section 203(a)(1).It would correspondingly be required to bereportedbyarecipientlabororganizationofficer oremployeeundersection202ofthe Act.

253.045ADVANCES

An advance on salary offered to all employees is not reportable by the employer since it maybe regarded as a payment of the kind referred to in section 302(c)(1) of the LMRA, 1947, in thatit is payable to an officer of a labor organization by reason of his service as an employee of saidemployer.Further, Instructions to LM-10, Employer Report, Part A, Question 8A, makes thefollowingexception:

“(b) Loans made to employees under circumstances and terms unrelated to the employees’statusinalabororganization.”

253.050UNIONMEMBERSWHOCONTRACTWORK

Members of local unions who are classified as contractors are employers in addition to beingmembers.As employers they are required to file reports with the Office regarding payments inexcess of regular dues which they make to their local union and that are not among thoseexcludedfromtheActundersection302(c).

(Revised:Dec.2016)

60. 
    NEGOTIATINGEXPENSES
    

Company Aand Union Bare attempting to negotiate production standards related to theoperation of new equipment.The company, through its plant officers, invites several unionrepresentatives to visit other plants of the company with a view to observing the new equipmentin operation.It was believed that when the union representatives viewed the new equipment inoperation they would have a more adequate factual basis for negotiating a production standardwith Company A.The company paid the union representatives their regular wages and theiractual expenses for travel and hotelaccommodations (one night’s lodging).

Under these circumstances, no employer report is required from the company and no laborofficer reports are required from the union representatives because the payment of bona fideexpenses by the company in connection with collective bargaining and negotiations areconsidered to come within the scope of the regular wage exception referred to in section 302(c)ofthe LMRA, 1947, as amended.

ButseeManualEntry243.200.

60. 
    MEALSFORBARGAININGCOMMITTEE
    

The practice of any employer, who pays for meals of a five-man bargaining committee of anindependent local on the occasion of its meeting several times a year with the employer’smanagement committee to discuss matters under the collective bargaining agreement, is notreportable under section 203(a)(1) of the Act in view of Item (e) of the exclusions listed in theinstructions for Question 8A, Part A of Form LM-10 (sporadic or occasional gifts or gratuities) ifthe practice involves an insubstantial cost per recipient and amounts to occasional acts ofhospitality which the employer extends to other groups with which it meets to discuss matters ofmutual interest.

(TechnicalRevisions:Dec.2016)

60. 
    COMPLIMENTARYROOMSTOUNIONOFFICERS
    

Hotels which furnish complimentary rooms to union officers as such during a convention arerequiredtofilereportsundersection203(a)(1)notwithstandingtheexceptioninsection302(c)(3) of the Taft-Hartley Act, as amended.While the furnishing of complimentary rooms byhotels to officials of organizations which hold conventions at their establishments is a commonpractice, where rooms are made available without charge or at a substantial “discount” becausethemen involved areofficers oftheuniondealingwiththehotel,reportsarerequiredfromboth