Labor & Employment Law Daily Wrap Up, FEDERAL REGULATIONS—DOL final rule reshapes union reporting with new, complex top-tier disclosure regime, (May 29, 2026)

By WK Editorial Staff

Smaller unions will see some relief from disclosure since hundreds that previously filed more complex forms will now be able to file simpler forms instead, based on the alteration of certain receipt thresholds.

The Department of Labor has finalized sweeping changes to labor organization annual financial reporting that will materially alter compliance obligations across the union landscape, creating a new disclosure regime for approximately 100 of the largest unions while easing burdens for smaller entities. The changes, being published on Monday in a final rule, will apply to fiscal years starting on or after July 1, 2026.

“Modern unions are financially complex organizations,” said Office of Labor-Management Standards Director Elisabeth Messenger. “The final rule fine tunes reporting requirements for larger labor organizations—many of which report tens of millions of dollars in assets each year—and adjusts thresholds for smaller labor organizations to increase transparency for America's hardworking union members and ensure reporting requirements keep pace as labor organizations evolve.”

2020 and 2025 notices. This final rule represents the culmination of a multi-year rulemaking process that began with a 2020 notice of proposed rulemaking (NPRM), in which the Department of Labor proposed creating a new LM-2 Long Form and revising the existing LM-2 to enhance transparency and address enforcement gaps identified by agency investigators. That proposal drew extensive public comment and was later administratively withdrawn from the regulatory agenda in 2021, although the Department retained and relied on the full record. In 2025, the Department issued a second, narrower NPRM focused on updating filing thresholds to account for inflation and reduce reporting burdens on smaller unions.

The 2026 final rule combines and refines both efforts—adopting enhanced disclosure requirements for the largest labor organizations while adjusting thresholds to rebalance compliance obligations—based on the earlier comment record and further analysis, with the Department concluding that the underlying policy rationale and factual circumstances had remained materially unchanged since 2020.

Changed tiers, new form. At a structural level, the rule recalibrates longstanding filing thresholds and introduces a new reporting tier. Beginning with fiscal years starting on or after July 1, 2026, unions will be sorted into four categories based on annual receipts: those with less than $25,000 will file Form LM-4; unions with $25,000 to $350,000 will file Form LM-3; organizations between $350,000 and $40 million will file a revised Form LM-2; and, for the first time, labor organizations with receipts of $40 million or more will be required to file a newly created Form LM-2 Long Form.

The Department’s decision to set the LM-2 threshold at $350,000—rather than the $450,000 level proposed in 2025—reflects an effort to balance inflationary adjustments against concerns over diminished transparency. By contrast, the $40 million threshold for the new Long Form is designed to capture only the “largest and most prominent” labor organizations, representing a small fraction of filers but a significant share of total union receipts.

Smaller unions gain relief from reporting burden. For smaller and mid-sized unions, the practical impact is largely deregulatory. The upward revision of the LM-2 threshold will shift hundreds of organizations into the less demanding LM-3 category, while the LM-3 threshold increase from $10,000 to $25,000 further expands eligibility for simplified reporting. The Department estimates that these changes will reduce compliance hours and associated costs, allowing smaller labor organizations to devote more resources to representational functions rather than administrative reporting.

At the same time, the agency declined to adopt certain proposals that would have added compliance requirements across the board, including mandatory strike fund disclosure and a whistleblower policy certification, citing concerns about redundancy, burden, and potential interference with union operations.

Largest unions face expanded, transaction-level disclosure. The most significant practical changes fall on large national and international unions subject to the new LM-2 Long Form. Under that regime, unions must move beyond aggregated reporting and provide itemized disclosures for a broader range of receipts and disbursements, including categories such as rents, supply sales, and affiliate transfers that were previously reported as lump sums.

The rule also introduces new schedules and expanded data fields, requiring unions to disclose detailed transaction-level information—including counterparties, dates, and purposes—for transactions meeting applicable thresholds. A new Schedule 32 specifically requires the identification and consolidation of foreign transactions, addressing concerns that such dealings were previously difficult to isolate within existing reports.

In addition, the Department has restructured key reporting categories, splitting representational activities into “contract negotiation and administration” and “organizing.” The first category—contract negotiation and administration—captures expenditures directly related to maintaining and enforcing existing collective bargaining relationships. This includes costs associated with negotiating new or successor agreements, administering contracts, handling grievances and arbitrations, and engaging in day-to-day representational services for current members, such as dispute resolution and contract compliance efforts.

By contrast, the new organizing category focuses on expenditures aimed at expanding union membership rather than servicing existing bargaining units. This includes resources devoted to organizing campaigns, outreach to unrepresented workers, recruitment initiatives, and payments to staff, consultants, or affiliates engaged in organizing activity. By requiring unions to report these categories separately, the rule draws a clearer line between spending used to sustain existing representation and spending directed toward growth, giving members, regulators, and other stakeholders a more precise understanding of how union resources are allocated between these distinct strategic priorities.

Political expenditures. The final rule also refines how unions report politically related expenditures for those filing the more detailed forms by separating what had historically been a single combined category into distinct reporting lines for political activity and lobbying. This change applies to unions required to file Form LM-2, including the new LM-2 Long Form, generally those with annual receipts of $350,000 or more. Under the revised structure, these unions must disclose expenditures for election-related activity—such as contributions and campaign efforts—separately from expenditures aimed at influencing legislation or policy advocacy. Combined with expanded itemization requirements, the change enables more precise reporting of both categories, including the identification of payees, amounts, and purposes for significant transactions.

Operational implications. For affected organizations, the rule will require more than technical form updates. Labor organizations filing the LM-2 Long Form will need to revise internal accounting systems to capture the additional data elements required for expanded itemization and new schedules. Finance and compliance personnel will need to implement stronger controls around transaction tracking, particularly with respect to the $5,000 itemization threshold that governs many reporting schedules.

Union leadership and counsel should also anticipate increased scrutiny from both regulators and members, as the enhanced disclosures will be publicly available. The Department emphasized that more detailed reporting is intended to deter misuse of union funds and strengthen member oversight, reinforcing the LMRDA’s core transparency objectives.

At the same time, the agency retained existing confidentiality exemptions for certain sensitive information, including organizing strategy and bargaining-related data, concluding that such protections remain necessary to safeguard unions’ operational interests.

Recalibration of transparency and burden. Overall, the final rule represents a targeted recalibration rather than a uniform expansion of reporting requirements. While large unions will face a more rigorous and granular disclosure regime, smaller organizations will benefit from reduced compliance obligations. The Department believes that, taken together, these changes will lower aggregate reporting burden while enhancing transparency where financial complexity—and, in its opinion, potential risk—is greatest.

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