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Unions, Employers Get ‘Covid-19' Delay for Financial Disclosures

March 26, 2020, 8:23 PM

Labor unions, businesses, and labor-relations consultants will have three additional months to file annual financial reports with the federal government if they have been affected by the coronavirus pandemic.

A significant share of employers and unions had faced a March 30 filing deadline. The Labor Department’s Office of Labor-Management Standards said in a notice Wednesday that it won’t pursue an enforcement action against those who file late “when these reporting violations are attributable to COVID-19.” Reports must now be filed by June 30, 2020, “absent further notice from OLMS.”

The policy applies to a number of influential labor organizations, such as Service Employees International Union, International Brotherhood of Teamsters, and American Federation of State, County and Municipal Employees. They had been slated to file annual LM-2 reports to meet the typical requirement to file within 90 days of the end of their fiscal year.

The union financial filings are highly anticipated. They show the latest membership totals for unions with at least $250,000 in annual receipts. The filings also break down how the unions spent their budgets for their prior fiscal years, including political spending, strike reserves, and officer salaries.

Employers are mandated to file what are known as LM-10 reports each year to detail certain financial arrangements with unions, such as a loan, or to disclose spending for the purpose of influencing workers’ union organizing or collective bargaining rights.

The agency’s notice didn’t describe what will constitute an acceptable delay attributable to Covid-19, the disease caused by the novel coronavirus. But the leniency will be welcomed by attorneys and accountants who had been staring down a Monday filing deadline in the midst of a pandemic that has forced businesses and schools to shutter across the country.

The agency’s alert follows up on its March 17 announcement, which stated that delinquent filers looking to avoid enforcement should contact OLMS before the due date and detail why the report couldn’t be submitted on time. The revised notice released Wednesday states that parties no longer need to contact the agency.

OLMS issued the update Wednesday after receiving a letter from James Cole, an attorney with the Groom Law Group in Washington, D.C. The letter outlined several reasons why the virus outbreak has made it particularly difficult for employers to meet the LM-10 deadline.

For instance, businesses are waiting to receive information from third parties that is necessary to determine whether a related financial transaction qualifies for an exemption to the LM-10 requirement, Cole wrote. Many employers are shut down in response to the virus, making it impossible to obtain that information.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bloomberglaw.com

To contact the editor responsible for this story: John Lauinger at jlauinger@bloomberglaw.com

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