The Department of Labor has proposed regulatory changes that would significantly raise the financial thresholds for LM-2, LM-3, and LM-4 reporting under the Labor-Management Reporting and Disclosure Act (LMRDA). If adopted, these changes would reduce the level of financial detail required from many labor unions, particularly smaller and unaffiliated organizations.
LRI Consulting Services has submitted a formal comment in opposition to the proposal and encourages other stakeholders, especially those in employer organizations or industries concerned with labor issues, to consider submitting their comments before the rulemaking window closes on July 31st.
Overview of the Proposed Rule
The proposed changes (RIN 1245-AA15) would:
- Raise the LM-2 reporting threshold from $250,000 to $450,000 in annual receipts
- Raise the LM-3 threshold from $10,000 to $25,000
- Shift over 2,200 unions to the LM-4 form, which contains only basic summary information
While the Department cites inflation and administrative burden as justification for the proposed thresholds, the current electronic filing tools and modern accounting practices make such filings accessible even for smaller organizations. Our position is that transparent and detailed financial reporting remains an essential accountability tool for union members and a key resource for businesses interacting with labor organizations.
Key Concerns
Our comment identifies several areas of concern:
- The transition of nearly 900 unions from LM-2 to LM-3 would remove access to itemized data on loans, charitable contributions, fixed assets, and representational spending.
- The proposed change would allow over 130,000 dues-paying members to receive less financial information about their unions, particularly those in unaffiliated or local organizations.
- A growing number of unaffiliated labor organizations are being created with minimal oversight, sometimes managing six-figure assets while reporting only four financial figures under LM-4 requirements.
In our view, these changes would create information gaps for both union members and employers that rely on this data to assess financial practices, understand representational focus, and evaluate risk.
Employer Action Needed:
These changes are important to all employers. The comment period ends on July 31st. If you have an opinion on this subject, we encourage you and your stakeholders to join us in sharing those concerns by submitting your objections, urging OLMS to maintain or lower thresholds, rather than raise them.
View the proposed rule and submit comments by scanning the QR Code (RIN 1245-AA15).
Click the links below to see the full comment submitted by LRI Consulting Services, Inc. and to obtain a sample comment you can use to draft your response.
