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| November 4, 2008 DOL Home > ESA > OLMS > Form LM-2 > FAQs > Schedules 11-13 |  |
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Office of Labor-Management Standards (OLMS)
Form LM-2 Frequently Asked QuestionsQuestions on Schedules 11 - 13 Additions are made regularly to the Frequently Asked Questions, so please check these pages often for updates. If you have a question that is not addressed here, you may email your question to olms-public@dol.gov.
Q. What do I report in Schedule 11 (All Officers and Disbursements to Officers)? A. List all the labor organization's officers and report all salaries and other direct and indirect disbursements to them during the reporting period. Also report the percentage of time spent by each officer in the categories provided. Q. Would it be a fair statement to say that the only change between the new Schedule 11 and the old Schedule 9 is the addition of Line (I), which is the allocation of time percentages between the five functional categories? A. Yes, that is the only major change. Q. How do I classify the time of our officers on each paycheck in our accounting system? A. It is not necessary to classify paychecks. The full amount of each paycheck should be allocated to the officer's name in Schedule 11, Column (D), Gross Salary. Then the total for the year in Column (H) will be allocated among Schedules 15 through 19 in accordance with the percentages entered in Line I for each officer. Q. How do I complete Line (l) of Schedule 11? A. Enter the estimated percentage of time spent by the officer on activities that fall within Schedules 15 through 19 in the appropriate box in Line (l). You may round to the nearest 10%. When the time reported by an individual in an activity is less than 5% of his or her total work time, the officer's best estimate to the nearest percentage should be reported rather than rounding to zero. The total must equal 100%. It is understood that these figures may be imprecise. Q. When you state in the Form LM-2 instructions that time allocation percentages for the five functional categories may be imprecise and you are looking for good faith estimates, what is your criteria for evaluating whether the percentage estimates are acceptable? A. Good faith percentage estimates are based on the best information and knowledge available to the officers. Q. With respect to estimated time percentages in Schedules 11 and 12, would it be acceptable for an officer or employee to systematically calculate his or her percentages for three or four weeks and then extrapolate those same percentages throughout the rest of the year? A. Only good faith estimates are required, so this method would be acceptable if those three or four weeks are generally representative of how the individual spends his or her time during the entire year. However, the percentages should be modified during the course of the year if circumstances warrant. Q. Should unions be concerned about making a good faith estimate that turns out to be not exact? A. A good faith effort is all that is required. However, if you expect to have your estimate challenged, then you should maintain records to substantiate your good faith estimate. You should feel confident that you will be able to justify your actions if that becomes necessary. You may want to consider keeping related records. Q. How will DOL audit and verify for accuracy the good-faith estimate of the allocation of officers' and employees' time? A. Officers and employees have discretion in determining the allocation of their time. They must only make good faith estimates. No particular records are required to be created. However, if an officer does keep a calendar, for example, the calendar must be retained and made available for examination. Q. Do union officers have to document their activities during the year? A. No. Union officers do not have to create such documentation. They may rely on their memory of events in good faith. If they choose to document their activities, however, they must retain those records. Q. It appears that the employee expenses are going to be allocated into the functional categories based upon the time allocations as reported on Line (I) of Schedules 11 and 12. Thus, it would appear that employee salary and expenses that are reported on Schedules 11 and 12 do not need to be allocated during the year into the functional categories because they will be allocated at the end of the year based upon the time allocations reported on Line (I). Is this correct, and are there any reasons to track the employees' salary and expenses that normally get reported on Schedules 11 and 12 into the functional categories? A. Disbursements to officers and employees that are required to be reported in Schedules 11 and 12 are allocated to the functional categories based upon the time allocations and do not have to be separately tracked by functional category. Q. Should cell phone charges and telephone calling cards for officers and employees be reported in Schedules 11 and 12 or should they be reported in Schedules 15 through 19? If they should be reported in Schedules 15 through 19, would it be reasonable to allocate each individual's telephone charges to Schedules 15 through 19 based on the time allocation percentages for each officer or employee? A. If the cell phones are provided to the union's officers and employees for business use, the cost and charges can be allocated to Schedules 15 through 19 on the Form LM-2. Using the time allocation percentages that each individual turns in at the end of the year would seem reasonable and acceptable. Alternatively, the cost and charges of the business use of the cell phones can be reported in Schedule 18, General Overhead. Telephone calling card charges may be treated in the same manner. If identifiable excess costs are incurred because of personal use of the cell phone or calling card, such as long distance personal calls that are itemized on the phone bill and charged above the basic cost of the cell phone service, those excess costs must be reported in Column (G) of Schedules 11 and 12, as applicable. Q. Does 100% of the time of officers and employees have to be allocated to the five categories? A. Yes. Q. Can a labor organization use the prior year's allocation as a guide for allocating the time of officers and employees? A. Yes. Q. How do we allocate time for the officers who perform multiple tasks during the reporting period? A. As stated in the instructions for the Form LM-2, on Line (I) of Schedule 11 enter the estimated percentage of time spent by the officer on activities that fall within Schedules 15 through 19 in the box by that schedule. You may round to the nearest 10%. When the time reported by an individual in an activity is less than 5% of his or her total work time, the officer's best estimate to the nearest percentage should be reported rather than rounding to zero. The total must equal 100%. It is understood that these figures may be imprecise. For instance, the president of an intermediate body may spend four months working on a multi-state contract negotiation, two months lobbying against a state referendum, two more months on an organizing drive, while also keeping up with his other duties as president. The president's good-faith estimate might be based on adding together the four months spent in contract negotiations and the two months on the organizing drive and allocating the six months as 50% (6/12) on Schedule 15 - Representational Activities. The president might then allocate the two months spent on the referendum as 17% (2/12) of his year on Schedule 16 - Political Activities and Lobbying. Finally, the president might determine that the remainder of his time was primarily devoted to union administration except for approximately one and one-half weeks devoted to administering a union scholarship program. Therefore, he would allocate 3% of his time to Schedule 17 - Contributions, Gifts, and Grants, and 30% to Schedule 19 - Union Administration. The example is not intended to be a representation of a typical allocation of time but it should be used to help understand the rationale that should be employed when making these determinations. Q. What amount of time are the salary allocations based upon such as, a 40 hour work week? For example an officer usually works 60 hours per week but is paid for 40 hours per week so that the remaining 20 hours per week is the officer's own time, which he may spend in political activity. Would the officer not have to report any political activity? A. If the activity is truly volunteer activity done on the officer's own time, it would not have to be reported here, but if the officer is expected to engage in the activity as part of the general duties of his or her office, the activity should be included in the time allocation. Q. How are salary deductions over $5,000 to social services such as child support, to be reported? A. All salary deductions to officers and employees should be reported in Line 8 of Schedule 11 and Line 9 of Schedule 12, respectively. Q. If salary deductions for child support payments are required to be reported, would this violate a confidentiality agreement? A. Salary deductions are not required to be itemized by individual, but are only reported in the aggregate for all officers and for all employees. Q. How should the time of a part-time officer be allocated? A. This is a judgment call. Generally, as is the case with any officer, the allocation should be based on the work the officer does as part of his or her official duties-not for any volunteer work the officer may perform unrelated to the official duties. Q. Wages for a local union's officers are paid by a district council and the local then reimburses the district council for the wages and associated benefits. How should this be reported by the local and district council? A. The local should report the amount that it reimburses the district council for officers' wages in Schedule 11 of the Form LM-2 by each officer's name with an explanation in Item 69 (Additional Information) that the wages are paid by reimbursing the district council. The amount that the local reimburses the district council for benefits should be included in Schedule 20 (Benefits). The district council should report its disbursements to the local officers in Schedule 18 (General Overhead) with a notation in the purpose column that it was a salary payment to be reimbursed by Local xx. Q. If an officer dies, how does the union allocate his/her time? A. The remaining officers will need to make a good faith estimate. Q. How do we allocate expenses for officers who perform multiple tasks during the reporting period? A. Disbursements that are required to be reported in Schedule 11 will be allocated according to the time allocations entered in Line I. Disbursements that are not required to be reported in Schedule 11 (such as disbursements for temporary lodging (room rent charges only) or transportation by public carrier necessary for conducting official business while the officer is on travel status if the disbursement is made directly to the provider or through a credit arrangement) should be allocated according to the purpose of the trip. Q. Must labor organizations require their officers and employees to maintain records to verify the allocation of their time in Schedules 11 and 12? A. The Form LM-2 instructions allow officers and employees discretion in determining the allocation of their time. Only a good faith estimate, not precise reporting, is required. No particular records are required to be created. Q. For Schedules 11 and 12, the instructions for Line (I) state "you may round to the nearest 10%". Are we allowed to round to the nearest percent? A. Yes. For Schedules 11 and 12, you may round to the nearest percent. Q. If we round to the nearest 10% according to your instructions, but one or more categories are less than 5% and those categories are thus rounded to the nearest percent, then one or more of the remaining categories cannot be rounded to the nearest 10% because the total would not equal 100%. What guidelines do you offer when this situation arises? A. One or more of the remaining categories should be rounded to the nearest percent as necessary for the total to equal 100%. Q. If an officer notes his/her activities on a daily calendar, must he/she keep the calendars for five years? A. Yes, if the calendars are used in determining the allocation of time. The LMRDA requires that supporting records be maintained for five years after a report is filed. Therefore, if notations on calendars are used to determine the information reported on Form LM-2, the calendars must be maintained for five years after the report is filed. Q. Will officers and employees be required to maintain timesheets to complete Schedules 11 and 12? A. Officers and employees will not be required to maintain timesheets so long as they use good faith estimates for calculating the percentage of time spent on activities that fall within Schedules 15 through 19. An individual may round to the nearest 10%. When the time reported by an individual in an activity is less than 5% of his or her total work time, the best estimate to the nearest percentage should be reported rather than rounding to zero. The total must equal 100%. It is understood that these figures may be imprecise. Q. If an officer is also a committee member, how would the union report the percentage of time he/she works on the committee? The committee work is not part of the officer's duties and he is not paid for the committee work. A. If the officer is not expected to participate in the committee as part of his official duties, then the time spent in those activities is not required to be reported in Line I of Schedule 11. Q. If a local union president also works for an intermediate body but doesn't get paid by the intermediate body, how should his/her disbursements be allocated? A. The local's Form LM-2 should only include percentages for the time that the president spends on activities that he performs as part of his official duties as local president. Q. What is the definition of an "officer"? A. "Officer" is defined in section 3(n) of the LMRDA as "any constitutional officer, any person authorized to perform the functions of president, vice president, secretary, treasurer, or other executive functions of a labor organization, and any member of its executive board or similar governing body." Q. My labor organization has some unpaid officer positions. Must I list those individuals in Schedule 11? A. Schedule 11 must list all persons who held office in the labor organization at any time during the reporting period whether or not any salary or other disbursements were made to them or on their behalf by the labor organization. Q. Should delegates to conventions be reported in Schedule 11 or 12? A. A delegate should be reported in Schedule 11 only if the individual holds an officer position in the reporting union. An individual who is a delegate from the reporting union but is not an officer of that union would be considered an employee and should be reported in Schedule 12. Q. What is a "direct disbursement" to an officer? A. A "direct disbursement" to an officer is a payment made by the labor organization to the officer in the form of cash, property, goods, services, or other things of value. Q. What is an "indirect disbursement" to an officer? A. An "indirect disbursement" to an officer is a payment made by the labor organization to another party for cash, property, goods, services, or other things of value received by or on behalf of the officer. Q. What does "on behalf of the officer" refer to? A. "On behalf of the officer" refers to a payment received by a party other than the officer or the labor organization for the personal interest or benefit of the officer. Such payments include those made through a credit arrangement under which charges are made to the account of the labor organization and are paid by the labor organization. For example, when a union, through its credit arrangements, is billed directly and pays the hotel bills of an officer who, during his workweek, resides at a hotel in the city where the union headquarters is located away from his legal residence in another city, the payments must be reported as disbursements to the officer. Q. A union and an employer have agreed that the employer will initially pay union officers' and members' lost time when they take off from work to perform union business. The payment to the employee is made by the employer. At the end of the month, the union reimburses the employer for all the lost time payments. Should these payments be reported in Schedules 11/12 A. Yes, these payments should be reported in Schedules 11 and 12 with an explanation of the arrangement with the employer in Item 69, Additional Information. Q. Are there any types of disbursements to officers that should not be reported in Schedule 11? A. Do not report the following disbursements in Schedule 11: Reimbursements to an officer for the purchase of investments or fixed assets, such as reimbursing an officer for a file cabinet purchased for office use, which must be reported in Schedule 4 (Purchase of Investments and Fixed Assets) and explained in Item 69 (Additional Information); Indirect disbursements for temporary lodging (room rent charges only) or transportation by public carrier necessary for conducting official business while the officer is in travel status away from his or her home and principal place of employment with the labor organization if payment is made by the labor organization directly to the provider or through a credit arrangement and these disbursements are reported in disbursement Schedules 15 through 20, as appropriate; Disbursements made by the labor organization to someone other than an officer as a result of transactions arranged by an officer in which property, goods, services, or other things of value were received by or on behalf of the labor organization rather than the officer, such as rental of offices and meeting rooms, purchase of office supplies, refreshments and other expenses of membership banquets or meetings, and food and refreshments for the entertainment of groups other than the officers and membership on official business; Office supplies, equipment, and facilities furnished to officers by the labor organization for use in conducting official business; and Maintenance and operating costs of the labor organization's assets, including buildings, office furniture, and office equipment; however, see the question below on special rules for automobiles. Q. Where should a union report per diem that it pays to officers or employees when they are on travel status for official business? A. This should be reported in column (F) of Schedule 11 or 12. A union that pays per diem should have a written policy that clearly articulates such matters as 1) when an officer or employee is entitled to the per diem, 2) what the per diem covers, and 3) what documentation should be maintained to demonstrate that the individual is entitled to the per diem, for example, that the individual is on official travel, that the travel has been properly approved, etc. Q. What records must be maintained to verify these payments? A. It is always preferable for a union to require the retention of receipts, but if an individual's entitlement to per diem is based on a condition like being on official travel status rather than on the basis of having actually spent a specific amount and being reimbursed for that amount, individual receipts would not be a record required to be maintained under section 206 of the LMRDA to verify the amount reported for per diem. Q. What if an individual is reimbursed for a meal on a day in which he or she also receives per diem? A. If a per diem is paid and the individual is also reimbursed for the cost of a business meal with another individual on that day, the individual's per diem should be reduced by the amount of the per diem allocated for his meal or that amount must be reported in column (G) on Schedule 11 or 12. This reduction should occur whether or not the union's policies specifically state that the per diem is meant to cover meals. Where a union's policies represent that per diem is meant to compensate employees only for additional efforts for work while on travel status, not meals, the union need not make a deduction in the per diem amount received by the employee to reflect the cost of the union-financed business meal. Under these circumstances, however, the union should ensure that its method of choosing which meals it will subsidize and which meals it will not is written and consistently applied. Q. Should per diem be reported differently if it is paid in advance? A. If per diem is paid before an employee travels, the payment would be considered a travel advance and must be evaluated according to the criteria in the instructions for Schedule 2 of Form LM-2 to determine if the payment is a loan: NOTE: Advances, including salary advances, are considered loans and must be reported in Schedule 2 (Loans Receivable). However, advances to officers and employees of the labor organization for travel expenses necessary for conducting official business are not considered loans if the following conditions are met:
See the instructions for Schedules 7 (Other Assets), 11 (All Officers and Disbursements to Officers) and 12 (Disbursements to Employees) for reporting travel advances that meet these criteria. Q. What is the difference between Column (F) and Column (G) in Schedule 11? A. Only disbursements that are necessary for conducting official business of the labor organization can be reported in Column (F). Disbursements that are essentially for the personal benefit of the officer and not necessary for conducting official business of the labor organization must be reported in Column (G). Q. Are there special rules for automobiles in Schedule 11? A. Yes. Include in Column (G) of Schedule 11 that portion of the operating and maintenance costs of any automobile owned or leased by the labor organization to the extent that the use was for the personal benefit of the officer to whom it was assigned. This portion may be computed on the basis of the mileage driven on official business compared with the mileage for personal use. The portion not included in Column (G) must be reported in Column (F). Alternatively, rather than allocating these operating and maintenance costs between Columns (F) and (G), if 50% or more of the officer's use of the vehicle was for official business, the labor organization may enter in Column (F) all disbursements relative to that vehicle with an explanation in Item 69 (Additional Information) indicating that the vehicle was also used part of the time for personal business. Likewise, if less than 50% of the officer's use of the vehicle was for official business, the labor organization may report all disbursements relative to the vehicle in Column (G) with an explanation in Item 69 indicating that the vehicle was also used part of the time on official business. The amount of decrease in the market value of an automobile used over 50% for the personal benefit of an officer must also be reported in Item 69. Q. How are salary deferrals like 401(k) contributions recorded on a labor organization's books? A. They should be booked as a withholding. Q. What is the pay threshold for reporting officers on Schedule 11? A. There is no threshold for reporting officers on Schedule 11. All officers must be listed on Schedule 11 along with all payments to them. If an officer receives no salary or any other monies, either direct or indirect, then zeros would be shown for dollar amounts. Q. If the union reports all the checks that are paid to an officer, wouldn't that mess up his/her W-2? A. No. Only salary is reported on the W-2. The requirements for reporting disbursements in Schedule 11 have not changed from the comparable schedule on the old Form LM-2 (Schedule 9). Q. If a few officers go to a negotiating luncheon, are the disbursements for the luncheon reported under negotiations or under those officers? A. The disbursements should be reported in Schedule 11, allocated among the officers. Q. What do I report in Schedule 12 (Disbursements to Employees)? A. Report all direct and indirect disbursements to employees of the labor organization during the reporting period. Also report the percentage of time spent by each employee in the categories provided. Include disbursements to individuals other than employees who receive lost time payments even if the labor organization does not otherwise consider them to be employees or does not make any other direct or indirect disbursements to them. The definitions of "direct disbursements" and "indirect disbursements" are the same as the definitions stated above in Schedule 11. Q. Must every employee be listed by name in Schedule 12? A. List only employees who during the reporting period received more than $10,000 in gross salaries, allowances, and other direct and indirect disbursements from the labor organization or from the labor organization and any affiliates and/or trusts of the labor organization. ("Affiliates" means labor organizations chartered by the same parent body, governed by the same constitution and bylaws, or having the relation of parent and subordinate.) The labor organization's report, however, should not include disbursements made by affiliates or trusts but should include only the disbursements made by the labor organization. Q. How do I report disbursements to employees who received less than $10,000? A. Report this information on Line 6 of Schedule 12. Q. Would it be a fair statement to say that the only change between the new Schedule 12 and the old Schedule 10 is the addition of Line (I), which is the allocation of time percentages between the five functional categories? A. Yes, that is the only major change. Q. For a "good faith estimate" that is imprecise, would it be acceptable for our employees to submit a declaration at the end of the year stating their personal allocations into the five categories? A. Yes. It is acceptable for employees to submit a declaration at the end of the year stating their personal allocations into the five categories. If employees have records that will enable them to better estimate their time, however, they should use them in order to improve the accuracy of the estimate. Such records, of course, must be maintained for not less than five years after the report is filed. Q. According to the instructions for the LM-2, the DOL is not going to require detailed time records to support the percentage allocations for the employees. What, if anything, would the DOL be looking for in terms of documentation supporting the percentage allocations? A. Whatever documentation was actually used to support the percentage allocations should be retained by the union, whether it is employee declarations, internal records, samplings, personal calendars, or other documents. Q. How does OLMS define the term "common carrier" for purposes of Schedules 11 and 12? A. The instructions use the term "public carrier." Generally, public carriers are regularly scheduled airplanes and trains, but not chartered airplanes or taxis. Q. Should time spent in preparing Form LM-2 or Form T-1 be considered general overhead or union administration? A. In allocating disbursements unions are expected to use a rule of reason and to be consistent in their allocation. Time spent in preparing Form LM-2 or Form T-1 would most appropriately be considered union administration. Q. How should disbursements for support staff be allocated? A. If the support staff is clearly connected to an individual officer, such as the president's confidential secretary, disbursements for that person should be allocated following the allocation used by the officer. Likewise, the salary paid to other support staff should be allocated at the same ratio as the program staff they support. Otherwise, the disbursements should be allocated to "General Overhead." Q. Payments to an assistant to an officer should be allocated the same as the person they are assisting. What if the assistant has other duties? A. The portion of the time the assistant works for the officer should be allocated the same as the officer. The time spent on other duties should be allocated according to the nature of those duties. For example, if the assistant spends half of his/her time assisting the president and the rest doing general clerical work for the union, then half of the disbursements to the assistant should be allocated to categories following the allocation of the president, and the other half should be allocated to Schedule 18, General Overhead. Q. If a member is called as a witness for an arbitration case and is paid lost time, would the union have to estimate what percent of that day's lost time was for arbitration? A. A member who receives lost time payments is considered to be an employee for reporting purposes even if the union does not otherwise consider him/her to be an employee. If the only purpose of the payment to the member was for an arbitration case, then 100% of the payment was for representational activities. An employee need not be listed by name on Schedule 12 unless the employee received more than $10,000 in gross salaries, allowances, and other direct and indirect disbursements from the labor organization or from any affiliates or trusts of the labor organization. Q. Will Business Representatives follow the same percentages as the Directing Business Representative percentages? A. The reporting union can determine how to establish the allocation for business representatives as long as it is done in good faith. Thus, similar percentages may be used if the result is likely to be an accurate representation with respect to all affected individuals. Q. A local business agent is arrested and released for an altercation at a job site. He fails to appear in court and is re-arrested and the union posts his bail. How is this disbursement to be reported? A. The disbursement should be reported by the business agent's name in Schedule 12, column (G) (Other Disbursements). Q. What categories of members do I report in Schedule 13? A. Enter in Column (A) the categories of membership tracked by the reporting labor organization. Define each category of membership in Item 69 (Additional Information). The definition should include a description of the members covered by the category. Q. Does DOL expect each parent organization to report membership categories in Schedule 13 in as much detail as each of its subordinate affiliates? A. The instructions for Schedule 13 state that "the categories of membership tracked by the reporting labor organization" should be entered in Column (A), so the parent organization should enter the categories that it tracks. Q. Are the membership categories based on numbers at the end of the reporting period? A. Generally the numbers should reflect membership at the end of the reporting period, but if the reporting union believes that because of widely fluctuating seasonable membership or other reasons, it is more reasonable to report membership at another date during the reporting year they may do so. The date chosen should be consistent from year to year. Q. Instructions for Schedule 13, Column (A) indicate that the definition of each membership category should specify whether members pay full dues. In the case of an international union, does this mean full per capita? A. Yes. Q. A district lodge collects only per capita payments from its subordinate locals. Must the district lodge report membership figures in Schedule 13? A. Yes, all reporting unions should complete Schedule 13 by listing the categories of membership it tracks, and by entering the number of members for each of these categories. Q. If a membership category can only vote on its own CBA, should the union answer "Yes" in Column (C) of Schedule 13? A. The instructions for Schedule 13 indicate that Column (C) should be answered "Yes" if the category of members is generally eligible to vote in all elections held by the labor organization. If the only type of election in which a category of members can vote is on its own collective bargaining agreement (CBA) and it is excluded from other votes such as officer elections, "Yes" should not be checked and the voting restrictions should be described in Item 69. However, if members of a certain category are eligible to vote in all types of union elections but can vote only for their own CBA (and are restricted merely from voting on the CBA of members in other collective bargaining units), "Yes" should be checked. Q. If a union has some affiliates for which it cannot identify agency fee paying nonmembers, what should it do? A. A union need only report agency fee paying non-members of which it is aware. Of course, if a union does in fact maintain a list of such fee-paying nonmembers and fails to include information in Schedule 13, the form will not be correct. Q. For Schedule 13, where should the reporting union explain its definitions of membership categories? A. The definitions go in Item 69, Additional Information. Q. If a union establishes an "alumni association" of former members who pay dues to the alumni association, but not the union, and are not considered to be union members and have no rights as members, must these individuals be reported in Schedule 13? A. No, this would not be considered a membership category. Last Updated: 03/23/07
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