The Form LM-3 is for labor unions with the annual receipts less than $250,000 but more than $10,000.
It is 4 pages long. If this applies to your organization, read on for some insights and pointers to reference while preparing and finalizing your labor union’s form.
The first page auto-populates based on the prior year form. Use Item 56 (shown on page 1) to provide additional information, such as explanations to the questions on page 2 or to inform the DOL of anything else that may be relevant (e.g., installing an officer by means other than a regular election).
Page 2 is the questions page. Here are a few pointers to consider when choosing your answers:
- Item 10 asks if the labor organization has a subsidiary organization. Select Yes if you have a separately identified entity with an Internal Revenue Service (IRS) tax identification number different than the labor union. This generally will apply only in situations where the union owns its building and a separate legal entity was established to hold title to the property.
- Item 13 asks if the organization acquired or disposed of any goods or property in a manner other than by purchase or sale. Select yes if any items were given away (e.g., promotional items to members), donated, destroyed, or trashed (such as disposals of obsolete equipment or property like copiers, computers, furniture, etc.). Often unions provide retirees with a watch or other property that must be reported here. Door prizes given away at union meetings can also require reporting. Did you know this covers at least the following?
- Donated or Retired Fixed Assets: If your union gave an unused computer to a local charity or threw out a conference table that was in disrepair, add a footnote to the form describing the type of asset(s), total cost and book values, and the donor or recipient (if applicable).
- Promotional Items to Members (e.g., t-shirts and hats): Describe the type and amount of promotional items purchased and given to members. You do not need to name names but a general description of who received the items is sufficient such as union members. Although not required for reporting purposes, the DOL requires that unions maintain an inventory of such items that were purchased and not yet given away. Further, the union should have the names of each recipient in its records.
- Item 15 asks if the labor organization discovered any loss or shortage of funds or other assets during the reporting period. The labor organization should include any discrepancies in its finances. Even if the loss was recovered or arrangements are in effect for full recovery, this question must be answered yes, and the loss described.
- Item 16 asks if you have an officer that was paid $10,000 or more by your organization and also received $10,000 or more from another organization or employee benefit plan. If both occurred during the reporting period, list the name of the individuals and amounts received (from other labor organizations and/or benefit plans, as applicable) in Box 56 on page 1. If you do not know if one of the officers received anything we suggest sending out a questionnaire each year if there is uncertainty. The description can read something like:
John Smith: Local Union President, salary and expenses $11,000: State Labor Council Treasurer, salary and expenses $12,000.
- Item 19 asks for the number of members the labor organization had at the end of the reporting period. Include all types of members (active and retired) who pay any amount of dues during the period. Do not report members who do not pay any dues.
- Item 21 asks if there were any changes to the labor organization’s constitution or by-laws during the reporting period. If you select Yes, remember to attach two copies of the changes. We recommend attaching a complete set of by-laws and not simply the change. Local unions subject to a Uniform Constitution of the national or international union should only report changes to your local union by-laws.
Page 3 provides information about officers and disbursements to officers. You must report all officers who held a position during the year. For each officer listed, select the appropriate status code in column C: Past Officer (P), Continuing Officer (C), and New Officer (N). Disclose gross salary in Column D (before taxes and any other deductions) and allowances/other disbursements in Column E. Include any checks written to the officer or on the officer’s behalf – car allowance, expense reimbursements, registration fees, etc. Column E must also include expenses paid to a third party on behalf of the officer or employee. There are some unique rules associated with union credit cards, union provided automobiles and other transactions. In Item 10, enter the aggregate deductions for all officers listed. This includes all withholding from officers’ salaries such as taxes, benefit plans, etc. If any officers receive salaries and Item D is $0.00, then something is wrong.
Page 4 lists the labor organization’s assets, liabilities, and net assets at year-end, and the cash received, and cash disbursed during the same period. Remember, the total receipts (Item 44) less the total disbursements (Item 55) should equal to the difference between the beginning of year cash balance reported on Item 25, Column A and the end of year cash balance listed on Item 25 Column B.
Form LM-3 should be completed as accurately as possible. For the official instructions and to obtain more detailed information, please refer to the form instructions published by OLMS. If you are uncertain how to complete the Form or disclose unusual events or transactions that may have occurred during the reporting period, consult with a well-versed professional in the nuances of the Form LM-3.
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