U.S. Department of LaborU.S. Department of LaborOffice of Labor-Management Standards

(OLMS)

Form T-1

The OLMS Mission

Administer the Labor-Management Reporting and Disclosure Act (LMRDA)

• Ensure union democracy• Safeguard union assets• Ensure union financial transparency

Form T-1 Trust Reporting

• Form T-1: a financial disclosure report filed by labor unions about trusts, funds or organizations (“trusts”) in which they are interested.

• Trust reporting provides union members with more complete information about union finances.

• Visit www.unionreports.gov.

What is a Trust?

A “trust in which a labor organization is interested” is a trust or other fund or

organization

• established by the labor union or run by a board that includes at least one person selected by the labor union, and which

• has a primary purpose to provide benefits for the labor union members or their beneficiaries.

Examples of Entities That May be Trusts

• A building corporation

• A redevelopment corporation

• An educational institute

• A credit union

• A labor union – employer joint fund

• A job targeting fund

Who Must File Form T-1?

• A Form T-1 report must be filed by a labor union with $250,000 or more in annual receipts that, acting alone or with other unions, either

(a) appoints or selects a majority of the members of the trust’s governing board or

(b) contributes more than 50% of the trust’s receipts. Contributions under a collective bargaining agreement are considered contributions by the union.

• A labor union must file a separate Form T-1 report for each trust that meets the reporting requirements.

When Must Form T-1 Be Filed?

• The Form T-1 final rule will take effect on January 1, 2009, and will first apply to labor unions with a fiscal year beginning on or after January 1, 2009 for each trust with a fiscal year beginning on or after that date.

• A labor union must file the T-1 report within 90 days of the close of its fiscal year.

• The T-1 report covers the trust’s most recently completed fiscal year.

Example of When Form T-1 Must Be Filed

• A union’s fiscal year begins January 1, 2009 and ends December 31, 2009.

• Its trust’s fiscal year begins on October 1, 2009 and ends September 30, 2010.

• The first fiscal year for which the union must file a Form T-1 is fiscal year January 1, 2010 to December 31, 2010. That report would be due 90 days later, on March 31, 2011. The report would cover the trust’s October 1, 2009 to September 30, 2010 fiscal year.

Exemptions from Filing Form T-1

No Form T-1 should be filed for

• Any trust that is a labor organization and files a Form LM-2, LM-3, or LM-4

• Any entity that is expressly exempted from reporting in the LMRDA

- Example: Local labor unions representing exclusively state employees

• A Political Action Committee (PAC) if publicly available reports on the PAC are filed with a Federal or state agency

Exemptions from Filing Form T-1 (cont.)

No Form T-1 should be filed for

• A political organization under 26 U.S.C. 527 if publicly available reports are filed with the Internal Revenue Service

• An employee benefit plan that is required to file a Form 5500 under the Employee Retirement Income Security Act of 1974

• A federal employee health benefit plan that is subject to the provisions of the Federal Employee Health Benefit Act (FEHBA).

The Abbreviated Report Option

• annual audits of the trust are prepared according to specified standards, and

• a copy of the audit is filed with the Form T-1.

A labor organization may complete only Items 1 through 15 and Items 26-27 (Signatures) of Form T-1 if

Audit Standards

The audit must be performed by an independent qualified public accountant who certifies that the trust’s financial statements are presented fairly in conformity with Generally Accepted Accounting Principles (GAAP) or Other Comprehensive Basis of Accounting (OCBOA).

Audit Standards (cont.)

• losses, shortages, or other discrepancies;

• the acquisition or disposition of assets other than by purchase or sale;

• liabilities and loans liquidated, reduced, or written off;

• loans made to union officers or employees on favorable terms; and

• loans made to officers and employees that were liquidated, reduced, or written off.

The audit must include notes to the financial statements that disclose

Audit Standards (cont.)

• a statement of assets and liabilities, along with the same data for the previous year, and

• a statement of receipts and disbursements, including parties with whom the trust engaged in $10,000 or more of commerce.

The audit must be accompanied by schedules that disclose

Electronic Filing

• Form T-1 must be filed electronically unless a hardship exemption is obtained from the Department. The electronic version of the form must be prepared using software downloaded from www.olms.dol.gov.

• If a labor organization files both Form LM-2 and Form T-1, the exemption must be applied for separately for each report, although in appropriate circumstances the same reasons may be used to support both exemptions.

Temporary Hardship Exemption

• If a labor organization experiences unanticipated technical difficulties that prevent the timely submission of the electronic Form T-1, the organization may file Form T-1 in paper format by the required due date.

• An electronic copy of the report must be filed within 10 business days after the required due date of the report.

Continuing Hardship Exemption

• A labor organization may apply in writing for a continuing hardship exemption if Form T-1 cannot be filed electronically without undue burden or expense.

• OLMS must receive the written application at least thirty days prior to the due date of the report.

• A continuing hardship exemption can be granted for up to one year.

Recordkeeping for Form T-1

- vouchers

- worksheets

- receipts

- resolutions, and

- electronic documents used to complete, read, and file the report.

• The officers required to file Form T-1 are responsible for maintaining records necessary to verify the accuracy and completeness of the report.

Recordkeeping for Form T-1 (cont.)

•The records must be kept for at least five years after the date the report is filed.

•The labor organization need not keep separate copies of the trust’s records at its own location.

Filing Form T-1 – Labor Organizations in Trusteeship

Any labor organization that has placed a subordinate labor organization in trusteeship is responsible for filing the subordinate’s Form T-1.

Completing Form T-1

File Numbers

• Enter in Item 1(a) the 6-digit (###-###) file number that OLMS assigned to the labor organization.

• Enter in Item 1(b) the 7-digit (T###-###) file number that OLMS assigned to the trust.

Obtaining a Trust File Number

For new Form T-1 filers, this number may be obtained by calling the OLMS Division of Reports, Disclosure & Audits at (202) 693-0124. OLMS will need the following information:

• Trust name

• Name of contact at trust

• Address of trust

• Filing labor organization’s name

• Name and position of requester

• Contact information for the requester (email or telephone)

Item 2. Period Covered

• In Item 2, enter the beginning and ending dates of the period covered by this report. This period should never be longer than 12 months.

Item 3. Amended, Hardship Exempted, or Terminal Report

• Check the box in Item 3(a) if the labor organization is filing an amended Form T-1 correcting a previously filed Form T-1.

• Check the box in Item 3(b) if the labor organization is filing Form T-1 under the hardship exemption procedures.

• Check the box in Item 3(c) if the trust has gone out of business, was merged or consolidated with other trusts, or if the labor union’s interest in the trust has ceased.

Items 4 through 9

• Enter the labor organization’s identifying information in Items 4 through 9.

Items 10 through 14

• Enter the trust’s identifying information in Items 10 through 14.

Item 15

• Answer “Yes” to Item 15 if the labor organization will be submitting an audit in place of the remainder of Form T-1.

Item 16

• Answer “Yes” to Item 16 if the trust experienced a loss of funds or property or other discrepancy in its finances.

Item 16 (cont.)

• the amount of the loss or a description of the property that was lost,

• how it was lost, and

• to what extent, if any, there has been an agreement to make restitution or any recovery by means of repayment, fidelity bond, insurance, or other means.

Describe the loss in Item 25 (Additional Information), including such information as:

Item 17. Acquisition or Disposition of Assets

• Answer “Yes” to Item 17 if the trust acquired or disposed of any goods or property in a manner other than purchase or sale.

Item 17. Acquisition or Disposition of Assets

(cont.)

• donating to charitable organizations• trading in assets• writing off a receivable, or• giving away property.

Describe in Item 25 (Additional Information) the manner in which the trust acquired or disposed of the assets, such as:

Include the type and value of the asset, and the name of the recipient, if any.

Also report in Item 25 the cost or other basis at which any acquired assets were entered on the trust’s books or the cost or other basis at which any assets disposed of were carried on the trust’s books.

For assets that were traded in, enter in Item 25 the cost, book value, and trade-in allowance.

Item 18. Liquidation of Liabilities

• Answer “Yes” to Item 18 if the trust liquidated, reduced, or wrote off any liabilities without full payment of principal and interest.

• Describe in Item 25 (Additional Information) all details in connection with the liquidation, reduction, or writing off of the trust’s liabilities without the disbursement of cash.

Item 19. Loans at Favorable Terms

• Answer “Yes” to Item 19 if the trust extended any loan or credit to any officer or employee of the reporting organization at terms below market rates.

Item 19. Loans at Favorable Terms (cont.)

• the name of the union officer or employee

• the amount of the loan

• the amount still owed at the end of the reporting period

• the purpose of the loan

• the terms for repayment

• any security for the loan, and

• a description of how the terms of the loan were more favorable than those available to others.

Provide in Item 25 (Additional Information) all details in connection with each such loan, including:

Item 20. Writing Off of Loans

• Answer “Yes” to Item 20 if the trust liquidated, reduced, or wrote off any loans receivable due from officers or employees of the reporting labor organization without full receipt of principal and interest.

• Describe in Item 25 (Additional Information) all details in connection with each such loan, including the amount of the loan and the reasons for the writing off, liquidation, or reduction.

Financial Details: Items 21 through 24

Item 21 (Assets)

• Enter the total value of all the trust’s assets.

• Include, for example, cash on hand and in banks, property, loans owed to the trust, investments, office furniture, and automobiles.

• Enter “0” if the trust had no assets.

Item 22 (Liabilities)

• Enter the total amount of all the trust’s liabilities.

• Include, for example, unpaid bills, loans owed, the total amount of mortgages owed, and payroll withholdings not transmitted by the end of the reporting period.

• Enter “0” if the trust had no liabilities.

Item 23 (Receipts)

• Enter the total amount of all receipts of the trust.

• Include, for example, interest, dividends, rent, money from the sale of assets, and loans received by the trust.

Item 24 (Disbursements)

• Enter the total amount of all disbursements made by the trust.

• Include, for example, net payments to officers and employees of the trust, payments for administrative expenses, loans made by the trust, taxes paid, and disbursements for the transmittal of withheld taxes and other payroll deductions.

• Enter “0” if the trust made no disbursements.

Schedules 1 and 2

Schedules 1 and 2 provide detailed information on the financial operations of the trust. With the limited exception of certain confidential information, all major receipts and disbursements must be identified and described.

Schedule 1

• any individual receipt of $10,000 or more; or

• total receipts from any single entity or individual that aggregate to $10,000 or more.

All “major” receipts must be separately identified in Schedule 1. A “major” receipt includes:

Schedule 2

• any individual disbursement of $10,000 or more; or • total disbursements to any single entity or individual that

aggregate to $10,000 or more.

All “major” disbursements must be separately identified in Schedule 2. A “major” disbursement includes:

Disbursements to officers and employees of the trust who received more than $10,000 from the trust during the reporting period should be reported in Schedule 3, and need not also be reported in Schedule 2.

Procedures for Completing Schedules 1 and 2

• an individual receipt or disbursement of $10,000 or more or

• total receipts or disbursements that aggregate, respectively, to $10,000.

Complete Schedule 1 and Schedule 2 and Continuation Sheets, as necessary, for each payer/payee for whom there is:

Procedures for Completing Schedules 1 and 2 (cont.)

• Enter in Column (A) the full name and business address of the payer or payee.

• Enter in Column (B) the type of business or job classification of the payer or payee.

Procedures for Completing Schedules 1 and 2 (cont.)

• Enter in Column (C) the purpose of the receipt/disbursement.

• Enter in Column (D) the date of the receipt/disbursement.

• Enter in Column (E) the amount of the receipt/disbursement.

Procedures for Completing Schedules 1 and 2 (cont.)

• Enter on Line (F) the total of all transactions listed in Column (E).

• Enter on Line (G) the totals from any Continuation Itemization Pages for this payee/payer.

• Enter on Line (H) the total of all itemized transactions with this payee/payer (the sum of Lines (F) and (G)).

• Enter on Line (I) the total of all non-itemized transactions with the payee/payer (that is, all individual transactions of less than $10,000 each).

• Enter on Line (J) the total of all transactions with the payee/payer for this schedule (the sum of Lines (H) and (I)).

Special Instructions for Reporting Credit Card Disbursements

• Payments to credit card companies must be broken out by individual vendors.

• The payments may not be treated as a single disbursement to the credit card company as the vendor.

• Information regarding credit card transactions may be limited, but filers must report all information that is available to them.

Special Instructions for Reporting Confidential Information

• Information that would identify individuals paid by the trust to work in a non-union bargaining unit in order to assist the union in organizing employees.

• Information that would expose the union's prospective organizing strategy.

• Information that would provide a tactical advantage to employers during contract negotiations.

Filers may use this procedure to report the following types of information:

Special Instructions for Reporting Confidential Information (cont.)

• Information pursuant to a settlement that is subject to a confidentiality agreement, or that the union or trust is otherwise prohibited by law from disclosing.

• Information in those situations where disclosure would endanger the health or safety of an individual.

Filers may use this procedure to report the following types of information:

Special Instructions for Reporting Confidential Information (cont.)

• In Item 25 (Additional Information) the union must identify each schedule from which any itemized receipts or disbursements were excluded. The notation must describe the general types of information that were omitted from the schedule.

Effect on Members’ Right to Examine Books and Records

A union member has the right “to examine any books, records, and accounts necessary to verify” the financial report if the member can establish “just cause” for access to the information.

Use of the confidentiality procedures constitutes a per se, or automatic, demonstration of “just cause,” providing a union member the right to review the undisclosed information, unless the information

• consists of individually identifiable health information the trust is required to protect under the Health Insurance

Portability and Accountability Act of 1996 (HIPAA)

• its disclosure would violate state or federal law, violate a non-disclosure provision of a settlement agreement, or

• endanger the health or safety of an individual.

Schedule 3 - Disbursements to Officers and Employees of the Trust

• List the names and titles of all officers of the trust, whether or not they received any salary or disbursements.

• Report salary and disbursements, if any, to the officers of the trust.

• Report salary and disbursements to employees of the trust who received more than $10,000 from the trust.

Items 26 and 27 – Signatures

• Electronically submitted forms must be signed with digital signatures. Information about this system can be obtained on the OLMS Web site at www.olms.dol.gov.

• On a paper Form T-1 submitted pursuant to an exemption, original signatures are required; stamped or mechanical signatures are not acceptable.

OLMS Web site

• Text of the Final Rule

• Facsimiles of Form T-1 and Instructions

• Downloadable Form T-1 Software and Instructions for Use

On the OLMS Web site at www.olms.dol.gov, you can find detailed information about Form T-1 including:

OLMS Mailing List

If you would like to receive via email periodic updates from the Office of Labor-Management Standards, including information about the revised Form LM-2 and Form T-1, enforcement results, and compliance assistance programs, you may subscribe to the OLMS Mailing List.

Details on the OLMS Web site at www.olms.dol.gov.