AGENCY:

Office of Labor-Management Standards, Department of Labor.

ACTION:

Proposed form revision; request for comments.

SUMMARY:

The Office of Labor-Management Standards of the Department of Labor (Department) is proposing revisions to the Form LM-10 Employer Report, required under section 203 of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA). Employers must file a Form LM-10 Employer Report with the Department to disclose certain payments, expenditures, agreements, and arrangements. The Department proposes to add to the Form LM-10 report a checkbox requiring certain reporting entities to indicate whether such entities were Federal contractors or subcontractors in their prior fiscal year, and two lines for entry of filers' Unique Entity Identifier and Federal contracting agency(ies), if applicable.

DATES:

Comments must be received on or before October 13, 2022.

ADDRESSES:

You may submit comments, identified by RIN 1245-AA13 only by the following method: internet—Federal eRulemaking Portal. Electronic comments may be submitted through https://www.regulations.gov. To locate the proposed form revision, use RIN 1245-AA13 or key words such as “LM-10,” “Labor-Management Standards” or “Employer Reports” to search documents accepting comments. Follow the instructions for submitting comments. Please be advised that comments received will be posted without change to https://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT:

Karen Torre, Chief of the Division of Interpretations and Regulations, Office of Labor-Management Standards, U.S. Department of Labor, 200 Constitution Avenue NW, Room N-5609, Washington, DC 20210, (202) 693-0123 (this is not a toll-free number), (800) 877-8339 (TTY/TDD), OLMS-Public@dol.gov.

SUPPLEMENTARY INFORMATION:

I. Statutory Authority

The legal authority for this proposed form revision is set forth in sections 203 and 208 of the Labor-Management Reporting and Disclosure Act of 1959, as amended (LMRDA), 29 U.S.C. 433, 438. Section 208 of the LMRDA provides that the Secretary of Labor shall have authority to issue, amend, and rescind rules and regulations prescribing the form and publication of reports required to be filed under Title II of the Act and such other reasonable rules and regulations as the Secretary may find necessary to prevent the circumvention or evasion of the reporting requirements. 29 U.S.C. 438. The Secretary has delegated this authority under the LMRDA to the Director of the Office of Labor-Management Standards (OLMS) and permits re-delegation of such authority. See Secretary's Order 03-2012—Delegation of Authorities and Assignment of Responsibilities to the Director, Office of Labor-Management Standards, 77 FR 69375 November 16, 2012.

II. Statutory and Regulatory Background

A. History of the LMRDA's Reporting Requirements

The Secretary of Labor administers and enforces the Labor-Management Reporting and Disclosure Act of 1959, as amended (LMRDA), Public Law 86-257, 73 Stat. 519-546, codified at 29 U.S.C. 401-531. The LMRDA, in part, establishes labor-management transparency through reporting and disclosure requirements for labor organizations and their officials, employers and their labor relations consultants, and surety companies.

In enacting the LMRDA in 1959, a bipartisan Congress expressed the conclusion, as it relates to this proposed form revision, that in the labor and management fields there had been a number of examples of breach of trust, corruption, and disregard of employee rights. Congress determined that legislation was needed to protect the rights of employees and the public as they relate to employers, labor relations consultants, and others. See29 U.S.C. 401(b).

The LMRDA is the direct outgrowth of an investigation conducted by the Senate Select Committee on Improper Activities in the Labor or Management Field, commonly known as the McClellan Committee, which convened in 1958. Enacted in 1959 in response to the report of the McClellan Committee, the LMRDA addresses various ills identified by the Committee through a set of integrated provisions aimed, among other things, at shedding light on labor-management relations, governance, and management. These provisions include financial reporting and disclosure requirements for employers and labor relations consultants. See29 U.S.C. 431-36, 441.

Among the abuses that prompted Congress to enact the LMRDA was questionable conduct by some employers and their labor relations consultants that interfered with the right of employees to organize labor unions and to bargain collectively under the National Labor Relations Act (NLRA), 29 U.S.C. 151 et. seq. See, e.g., S. Rep. NO. 86-187 (“S. Rep. 187”) at 6, 10-12 (1959), reprinted in 1 NLRB, Legislative History of the Labor-Management Reporting and Disclosure Act of 1959 (“LMRDA Leg. Hist.”), at 397, 402, 406-408. Congress was concerned that labor consultants, acting on behalf of management, worked directly or indirectly to discourage legitimate employee organizing drives and engage in “union-busting” activities. S. Rep. 187 at 10, LMRDA Leg. Hist. at 406. Congress concluded that such consultant activities “should be exposed to public view,” id., S. Rep. at 11, because they are “disruptive of harmonious labor relations and fall into a gray area,” id. at 12, even if the consultant's conduct was not unlawful or did not otherwise constitute an unfair labor practice under the NLRA.

As a result, Congress imposed reporting requirements on employers and their consultants under LMRDA section 203. 29 U.S.C. 433. Under LMRDA section 208, the Secretary of Labor is authorized to issue, amend, and rescind rules and regulations prescribing the form and publication of required reports, as well as “such other reasonable rules and regulations . . . as he may find necessary to prevent the circumvention or evasion of such reporting requirements.” 29 U.S.C. 438. The Secretary is also authorized to bring civil actions to enforce the LMRDA's reporting requirements. 29 U.S.C. 440. Willful violations of the reporting requirements, knowing false statements made in a report, and knowing failures to disclose a material fact in a report are subject to criminal penalties. 29 U.S.C. 439.

B. Statutory and Regulatory Requirements for Employer Reporting

Section 203(a) of the LMRDA, 29 U.S.C. 433(a), requires employers to file a report, subject to certain exemptions, covering the following payments and arrangements made in a fiscal year: certain payments to, or other financial arrangements with, a labor organization or its officers, agents, or employees; payments to employees for the purpose of causing them to persuade other employees with respect to their bargaining and representation rights; payments for the purpose of interfering with employees in the exercise of their bargaining and representation rights or for obtaining information on employee or labor organization activities in connection with labor disputes involving their company; and arrangements (including related payments) with a labor relations consultant for the purpose of persuading employees with respect to their bargaining and representation rights, or for obtaining information concerning employee activities in connection with a labor dispute involving their company. 29 U.S.C. 433.

If an employer has engaged in reportable activity, the employer must file a report, signed by its president and treasurer showing in detail the date and amount of each payment, loan, promise, agreement, or arrangement and the name, address, and position, if any, in any firm or labor organization of the person to whom it was made and a full explanation of the circumstances of all such payments, including the terms of any agreement or understanding pursuant to which they were made. See29 U.S.C. 433. The Department of Labor's implementing regulations require employers to file a Form LM-10 Employer Report (“Form LM-10”) that contains this information. See29 CFR part 405.

C. Overview and History of the Form LM-10

The Form LM-10 Employer Report must be filed by any employer who has engaged in certain financial transactions or arrangements, of the type described in LMRDA section 203(a), with any labor organization, union official, employee, or labor relations consultant, or who has made expenditures for certain objects relating to activities of employees or a union. Employers are required to file only one Form LM-10 each fiscal year that covers all instances of reportable activity even if activity occurs at multiple locations.

In its current iteration, the Form LM-10 is divided into two parts: Part A and Part B. Part A consists of pages 1 and 2 of the Form LM-10. In Part A, Items 1-7 request basic identifying information about the employer, namely file number, fiscal year, address of the employer, address of the president or corresponding officer, any other address where records needed to verify the report can be made available for examination, a checklist of each location where records needed to verify the report can be made available for examination, and what type of legal entity is filing the report (“Corporation, Partnership, Individual, Other (specify)”). Item 13 and Item 14 are also featured on page 1 of Part A and are the signature boxes for the president and treasurer of the employer, respectively. Page 2 consists entirely of Part A, Item 8, which contains six “Yes or No” questions pertaining to reportable employer activities. If the employer-filer can answer “No” to every question in Item 8, then no LM-10 Report needs to be filed. With each question answered “Yes,” the filer must complete a separate Part B for every person or organization with whom a reportable agreement was made or to whom a reportable payment was made as to that “Yes” answer. The form also asks for the total number of Part Bs filed for each question in Item 8.

Part B comprises page 3, and requires the name of the reporting employer and the file number again to ensure it is matched with Part A. Similarly, the next field is a checkbox indicating the questions in Item 8 (labeled a through f) to which this Part B applies. Items 9-12 require various details regarding the agreement or payments the employer-filer made.

Item 9 consists of four parts, 9.a.-9.d. Item 9.a. asks whether this Part B concerns itself with an “Agreement,” a “Payment,” or “Both.” Item 9.b. requires the name and address of the person with whom or through whom a separate agreement was made or to whom payments were made. Item 9.c. requires the position of any persons mentioned in 9.b. Item 9.d. requires the name and address of the labor organization or firm any person mentioned in 9.b. is a part of.

Item 10 consists of two parts, 10.a. and 10.b. Item 10.a. requires the date of the promise, agreement, or arrangement pursuant to which payments or expenditures were agreed to or made. Item 10.b. consists of three checkboxes and filers are required to mark whether the promise, agreement, or arrangement was “Oral,” “Written,” or “Both.” If the agreement is written and entered into during the fiscal year, it must be attached to the report.

Item 11 consists of three parts, 11.a.-11.c. Item 11.a. requires the date of each payment or expenditure referred to in Item 9. Item 11.b. requires the amount of each of those payments. Item 11.c. requires the filer to indicate the kind of each payment or expenditure, specifying whether it was a payment or a loan and whether it was made in cash or property.

Item 12 requires a narrative response from the filers with a full explanation identifying the purpose and circumstances of the payments, promises, agreements, or arrangements included in the report. The explanation must contain a detailed account of services rendered or promised in exchange for promises or payments the filer has either already made or agreed to make. The explanation must also fully outline the conditions and terms of any oral agreement or understanding pursuant to which they were made. Lastly, the filer must indicate whether the payments or promises reported specifically benefited the person or persons listed in Item 9.b., or the firm, group, or labor organization named in Item 9.d. If the employer-filer made payments, promises, or agreements through a person or persons not shown above, they must provide the full name and address of such person or persons. The explanation must clearly indicate why the filer must report the payment, promise, or agreement. Any incomplete responses or unclear explanations render a report deficient.

III. Proposed Revisions to the Form LM-10

In this document, the Department proposes a revision to the Form LM-10 Employer Report to supplement the identifying information that OLMS already collects from employers required to file, such as the employer's name, address, and status as a corporation, partnership, or individual. The proposed revision would not change which employers are required to file Form LM-10; it would require filers to provide an additional item of identifying information—whether the employer is a Federal contractor or subcontractor—and, if so, a short entry indicating the Federal contracting agency(ies) and the contractor's Unique Entity Identifier (UEI), if the contractor has one. If providing the name of a contracting agency would reveal classified information, the filer should omit the name of the agency. All Federal prime contractors, and, in some cases, subcontractors performing on Federal prime contracts, must have a UEI in order to do business with the Federal Government or to meet reporting requirements per the Federal Acquisition Regulation (FAR). For example, FAR regulations at 48 CFR 52.204-6 requires prime contractors to obtain a UEI in order to register to obtain contracts with the Federal Government (as of April 2022, the Unique Entity Identifier replaced the Data Universal Numbering System (DUNS) number).^[1]

In order to collect this information quickly and efficiently, the Department proposes adding one “Yes,” “No,” or “N/A” checkbox at the end of the form regarding Federal contractor status. Not all filers will be required to complete Item 12.b. Filers who answer “Yes” to Item 8.a., but “No” to Items 8.b.-8.f., would not be required to complete Item 12.b., and the electronic form would automatically check the “N/A” box and grey out the remaining portions of Item 12.b. for those filers so that no entry can be made.^[2] Additionally, the Department proposes to add two lines where filers who are Federal contractors would enter their Unique Entity Identifier and the Federal contracting agency(ies) involved.

The instructions would also make explicit that filers would enter information that the Form LM-10 already requires—the unit or division of employees that is the subject of the report. See Item 12 (“Provide a full explanation identifying the purpose and circumstances of the payments, promises, agreements, or arrangements included in the report. Your explanation must contain a detailed account of services rendered or promised in exchange for promises or payments you have already made or agreed to make.”). This necessarily includes identifying certain payments, expenditures, agreements, and arrangements regarding employees. Filers must therefore currently identify the employees that are the subject of the report in Item 12. The Department proposes to renumber Item 12 as Item 12.a., and to add Item 12.b. thereafter with the “Yes,” “No,” or “N/A” checkbox and the two lines.

The new Item 12.a. would consist of a narrative section that mirrors the existing Item 12. In both the existing Item 12 and the revised Item 12.a., filers must explain fully the circumstances of all payments, including the terms of any oral agreement or understanding pursuant to which they were made. As the instructions indicate for Item 12 and would indicate for Item 12.a., filers must provide “a full explanation identifying the purpose and circumstances of the payments, promises, agreements, or arrangements included in the report.” The instructions would also make explicit that a “full explanation” requires that filers must identify the subject group of employees ( e.g., the particular unit or division in which those employees work).

Filers who checked “Yes” for any item in Items 8.b.-8.f. would be required to complete Item 12.b. regarding their status as a Federal contractor or subcontractor. Regarding such status, the Department proposes to adopt the following definitions from the regulations implementing Executive Order 13496, Notification of Employee Rights Under Federal Labor Laws: (a) “contract,” (b) “contracting agency,” (c) “contractor,” (d) “government contract,” (e) “modification of a contract,” (f) “prime contractor,” (g) “subcontract,” and (h) “subcontractor.” 29 CFR 471.1. Therefore, filers would be required to answer Item 12.b. in accordance with those eight definitions.^[3] Id.

The Department expects that Federal contractors and subcontractors are already familiar with these definitions because they are, with minimal changes, the same definitions that already govern Federal contractors and subcontractors under Executive Order 11246, Equal Employment Opportunity, and its implementing regulations. See41 CFR 60-1.3 (definitions regarding obligations of Federal contractors and subcontractors). Federal contractors and subcontractors are also currently required to comply with Executive Order 13496. Executive Order 13496 applies to Federal contractors and subcontractors subject to the National Labor Relations Act (NLRA). The Department expects that most filers are subject to the NLRA, as the National Labor Relations Board (NLRB) has conducted over 1,000 representation elections per year over the past decade, while the National Mediation Board (NMB) has handled significantly fewer, with less than 50 representation election cases per year over the same period.^[4] Pursuant to Executive Order 13496, employers covered by the NLRA are already required to know whether they are Federal contractors or subcontractors under the definitions proposed here and, if they are, to post the notice required by Executive Order 13496 “in conspicuous places” including “areas in which the contractor posts notices to employees about the employees' terms and conditions of employment” and “where employees covered by the National Labor Relations Act engage in activities relating to the performance of the contract.” 29 CFR 471.2(d).

The Department notes that employers covered by the Railway Labor Act (RLA) are not covered by Executive Order 13496, however, both NLRA and RLA employers are subject to the reporting requirements of the LMRDA. Thus, RLA employers may need more time to identify which employees who are the subject of the LM-10 report have duties relating to the performance of the Federal contract or subcontract. As explained above, the Department expects that only a small number of filers will be Federal contractors or subcontractors subject to the RLA. Therefore, the Department expects that all filers who are Federal contractors and subcontractors will already know their status as such under Executive Order 11246 and its implementing regulations, see41 CFR 60-1.3, and that most filers will be able to easily identify the information required for Item 12.b.

For those required to complete Item 12.b., it would consist of two parts. First, filers would be required to complete the “Yes,” “No,” or “N/A” checkbox in response to the following question: “If your Part B applies to Items 8.b.-8.f., did the expenditures, payments, arrangements or agreements concern employees performing work pursuant to a Federal contract or subcontract?” Second, if the filer answers “Yes,” they would be required to enter, on the two lines provided, their Unique Entity Identifier and the Federal contracting agency(ies) involved. If a subcontractor does not have a Unique Entity Identifier, then the subcontractor should so state in Item 12.b If providing the name of a contracting agency would reveal classified information, the filer should omit the name of the agency. When filers answer “Yes,” in the checkbox portion of Item 12.b., failure to complete the entry on the two lines provided, or an unclear explanation in that entry, would render the report deficient.

IV. Purpose and Justification for Proposed Changes

Both the public and the employees whose rights are at issue have an interest in understanding the full scope of activities undertaken by employers to surveil employees, to commit unfair labor practices, or to persuade employees not to exercise their rights to organize or bargain collectively. See S. Rep. 187 at 10-11, LMRDA Leg. Hist. at 406-07.

The Form LM-10 reporting requirement is based on Congress's dissatisfaction with the “large sums of money [that] are spent in organized campaigns on behalf of some employers” on persuader activities that “may or may not be technically permissible” and Congress's determination that the appropriate response to such persuader campaigns is to disclose them in the public interest and for the preservation of “the rights of employees.” See S. Rep. 187 at 10-12, LMRDA Leg. Hist. at 406-07.

As set forth in Section I, Statutory Authority, above, LMRDA Section 208 authorizes the Secretary to “issue . . . regulations prescribing the form and publication of reports required to be filed under this title.” 29 U.S.C. 438. The statutory provision authorizing the issuance of the Form LM-10 describes the data and information to be reported in the Secretary's form. 29 U.S.C. 433.

The statutory intent to require employers to provide a “full explanation” of payments was reflected in the Form LM-10 the Secretary established. Employers are told: “Explain fully the circumstances of all payments, including the terms of any oral agreement or understanding pursuant to which they were made.”

The proposal here clarifies that one of the circumstances that must be explained is whether the payments concerned employees performing work pursuant to a Federal contract or subcontract and, if so, the filer would provide its Unique Entity Identifier, if it has one, and the relevant Federal contracting agency(ies). If providing the name of a contracting agency would reveal classified information, the filer should omit the name of the agency. Disclosing contractor status is consistent with Congress's intent in enacting the LMRDA: “[I]t continues to be the responsibility of the Federal Government to protect employees' rights to organize, choose their own representatives, bargain collectively, and otherwise engage in concerted activities for their mutual aid or protection.” 29 U.S.C. 401(a).

The Department proposes this change in response to the increased prevalence of, and public interest in, persuader activities in recent years. The media, academics, and non-governmental organizations (NGOs) have taken note of persuader activity in a number of industries, including multiple high-profile instances of companies investing substantial resources in persuader activity. Over the decades, employer efforts to defeat unions have become more prevalent, with more employers turning to union avoidance consultants.^[5] Further, members of Congress have noted recently that Federal contractors have engaged in such agreements and activities.^[6] As the Agency responsible for promoting transparency around management attempts to influence employees' collective bargaining rights, OLMS closely monitors developments in the ways management interacts with union organizing efforts. The noted prevalence of persuader activity accordingly increases the interest of Government in obtaining information on persuader efforts which Congress found to be “disruptive of harmonious labor relations” even if lawful. S. Rep. 187 at 12, LMRDA Leg. Hist. at 406. This Government interest is especially acute when the Federal Government itself is paying for goods and services from those who would disrupt the harmonious labor relations that the Federal government is bound to protect. See29 U.S.C. 401(a).

In other words, greater transparency is even more important when persuader activities are undertaken by employers that receive Federal funds through contracting relationships. See Executive Order (E.O.) 13494 (reiterating “the policy of the United States to remain impartial concerning any labor-management dispute involving Government contractors.”). Such Federal contractors are not permitted to receive reimbursement for the costs of engaging in those activities under the contract. E.O. 13494, 74 FR 6101; 48 CFR 31.205-21.^[7] But these Federal contractors still engage in those activities; they simply do not seek or obtain reimbursement from the government for the costs of the activities.

The proposed revision to Form LM-10 would increase transparency regarding which Federal contractors and subcontractors are engaging in persuader activities. Confirming a filer's status as a Federal contractor, as well as its Unique Entity Identifier, as part of a full explanation of persuader activities will provide a method for the public, procurement agencies and employees to quickly identify which persuaders are Federal contractors.

This increased transparency benefits the employees subject to the employer's persuader activity by giving them relevant information about the source of communications that seek to influence their rights—as intended by Congress in enacting the LMRDA. Generally, the transparency created by the persuader reporting requirements is designed to better inform workers in making determinations regarding the exercise of their rights to organize and bargain collectively. For example, with the knowledge that the source of the information received is an anti-union campaign managed by an outsider, workers will be better able to assess the merits of the arguments directed at them and make an informed choice about how to exercise their rights. Here, employees have a particular interest in knowing whether their employers are Federal contractors because, as taxpayers themselves, those employees should know whether they are indirectly financing persuasion campaigns regarding their own rights to organize and bargain collectively. Persuader campaigns are not themselves reimbursable under the Federal contract or subcontract. Nevertheless Federal contractors receive Federal dollars—often in significant amounts—for goods and services. Such funds support directly or indirectly contractors' businesses and additional activities, which may include the decision to hire the outsider to persuade the employees.

Additionally, by learning of the previously unknown Federal contractor status their employer enjoys, those employees would have the information that would allow them to meaningfully exercise their right to choose whether to contact their representatives in Congress to inquire about the amount of Federal appropriations underlying the contracts with their employers, or the contractors' activities undertaken directly or indirectly pursuant to such contracts, or allow the employees to work more effectively with advocacy groups or the media to disseminate their views as employees to a wider audience. This is consistent with Congress' expectations when enacting the LMRDA—that in the public interest, and consistent with First Amendment rights to speak out on these issues, citizens would have the benefit of public reports regarding employer conduct that falls in a “gray area.” S. Rep. 187 at 11, LMRDA Leg. Hist. at 407 (persuader activities “should be exposed to public view, for if the public has an interest in preserving the rights of employees then it has a concomitant obligation to insure the free exercise” of those rights).

The requirement that an employer provide its Unique Entity Identifier, if it has one, will prevent confusion. Two or more employers may have a similar name. Individual employers often use multiple names, including trade, business, assumed or fictitious names, such as a DBA (“doing business as”) designation. All Federal contractors have their own individual identifier to seek and secure Federal contracts.^[8] By requiring employers to provide this identifier, members of the public and employees will be able to confirm the true identity of the employer. As stated, if a subcontractor does not have a Unique Entity Identifier, then it should so state in Item 12.b. If providing the name of a contracting agency would reveal classified information, the filer should omit the name of the agency.

Given the potential for disruption, the public, like employees, has an interest in knowing whether the government is indirectly funding persuader activity by engaging in business with these companies, even if these activities are not unlawful. The required disclosure of such information is consistent with and fully authorized by sections 203 and 208 of the LMRDA and their broad grant of authority to prescribe the form of the required reports. 29 U.S.C. 433, 438.

Knowledge of such information would also enable members of the public to understand which Federal agencies are contracting with employers who are engaging in persuader activity. The public and employees would benefit from knowing whether a specific Federal agency is choosing to do business with an employer that is attempting to influence the exercise of workers' rights to choose whether to organize and bargain collectively. This public exposure would allow for an open public discussion and debate about the prevalence of persuader activity and the extent to which specific Federal agencies might be indirectly supporting such activities by doing business with employers that engage in persuader activities.

V. Regulatory Procedures

A. Executive Order 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Review)

Under Executive Order (E.O.) 12866, the Office of Management and Budget (OMB)'s Office of Information and Regulatory Affairs determines whether a regulatory action is significant and, therefore, subject to the requirements of the E.O. and review by OMB. 58 FR 51735. Section 3(f) of E.O. 12866 defines a “significant regulatory action” as an action that is likely to result in a rule that (1) has an annual effect on the economy of $100 million or more, or adversely affects in a material way a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as economically significant); (2) creates serious inconsistency or otherwise interferes with an action taken or planned by another agency; (3) materially alters the budgetary impacts of entitlement grants, user fees, or loan programs, or the rights and obligations of recipients thereof; or (4) raises novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O. Id. OMB has determined that this proposed form revision is a significant regulatory action under section 3(f)(4) of E.O. 12866.

E.O. 13563 directs agencies to propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; the regulation is tailored to impose the least burden on society, consistent with achieving the regulatory objectives; and in choosing among alternative regulatory approaches, the agency has selected those approaches that maximize net benefits. E.O. 13563 recognizes that some benefits are difficult to quantify and provides that, where appropriate and permitted by law, agencies may consider and discuss qualitative values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts.

A. Costs of the Updated Form LM-10 for Affected Employers

The Form LM-10 is filed by private business entities that engage in certain financial transactions or arrangements, and these employer entities only have reporting obligations during fiscal years in which the entity makes such transactions or enters in such arrangements. As such, the Form LM-10 is not an annually mandatory form, so not all employers must file the Form LM-10 in a given year. Further, as has been discussed, the modification to the Form LM-10 discussed in this NPRM does not add a new form or remove any forms, nor does it expand or contract the circumstances under which it is necessary for an employer to file an LM-10. This modification only slightly changes the structure of Item 12 by adding two items for certain filers. However, the Department will account for the potentially minimal costs of the slight changes to the structure of Item 12.

Based upon estimates for the existing Form LM-10 and other LM forms, the Department estimates that the new Item 12.b. will take a minimum of approximately 5 minutes to complete, thus adding approximately 5 minutes of reporting burden to the existing Form LM-10 (which the current existing instructions estimate to take approximately 35 minutes to complete, including the current Item 12). This 5 minutes is an average that takes into account that not all filers will be Federal contractors or subcontractors and not all Federal contractors or subcontractors that file will be required to complete the two lines in Item 12.b. While the Department does not expect that employers required to complete Item 12.b. will have difficulty in determining which employees work on which Federal contract, the Department also acknowledges uncertainty in this area. Thus, the Department also seeks comment on whether it should raise the burden increase estimate from 5 minutes to 15 minutes or some other number.

The Department does not estimate any additional recordkeeping burden for the following reasons. Some filers will spend zero minutes on Item 12.b. because, after only checking “Yes” to Item 8.a., the form will automatically check “N/A” and grey out the rest of Item 12.b. as no answer will be required. Many filers will need less than the 5-15 minutes to address Item 12.b. because they will only need to check “No,” that they are not a Federal contractor or subcontractor.

The large majority of Federal contractors and subcontractors will need no more than 5-15 minutes to complete Item 12.b. Checking “Yes” regarding their status as a Federal contractor or subcontractor will only take a few minutes because all Federal contractors and subcontractors are already required to be familiar with the definitions proposed here regarding that status, which are based on Executive Orders 11246 and 13496 and their implementing regulations. See41 CFR 60-1.3 (definitions regarding obligations of Federal contractors and subcontractors); 29 CFR part 471 and note 3, supra (including eight definitions OLMS proposes to adopt).

Similarly, most Federal contractors and subcontractors should be able to easily enter their Unique Entity Identifier. See note 1, supra. If a filer does not have a Unique Entity Identifier, the filer should so state in Item 12.b. Along with their Unique Entity Identifier, Federal contractors and subcontractors would enter the name of the Federal contracting agency(ies) on the two lines in Item 12.b. If providing the name of a contracting agency would reveal classified information, the filer should omit the name of the agency.

While some RLA-covered employers may need more than 5-15 minutes because they may not be immediately familiar with which employees who are the subject of the Form LM-10 report have duties relating to the performance of the Federal contract or subcontract (and thus which agencies to enter into Item 12.b.), the Department does not expect RLA-covered filers to be as numerous as NLRA-covered filers, although the Department is aware that there are RLA-covered Federal contractors and subcontractors. The Department presumes that the large majority of employers that constitute Federal contractors or subcontractors would need no more than 5-15 minutes for Item 12.b., because they will be covered by the NLRA and therefore they will already be required to retain information relevant to Item 12.b., including which units of employees perform work under such contracts, pursuant to Executive Order 13496 (Notification of Employee Rights Under Federal Labor Law).

While a few filers may have a slightly higher time burden, and some will have a time burden that is lower than 5-15 minutes, the Department has accounted for this in determining the average time burden of 5-15 minutes. The Department asks for comment on this point.

The Department estimates that the 5-15-minute estimate, just as the existing 35-minute total estimate, represents an average of affected filers. Indeed, not all Form LM-10 filers will need to complete the new Item 12.b.^[9] More specifically, filers need not fill out Item 12.b if they have only checked “Yes” to Item 8.a. Rather, only if a filer answers “Yes” to any of Items 8.b.-8.f. would they need to answer Item 12.b. Additionally, filers who check “No” on item 12.b. will not have to enter any further information in Item 12.b., further decreasing the average time burden. Further, because the Form LM-10 represents a situationally occurring reporting requirement rather than an annual reporting requirement, it would be imprudent to try to estimate differing burden levels associated with first-year exposure and subsequent exposures to the new questions.

To determine the cost increase per Form LM-10 filer associated with the new Item 12, the Department utilized an approach consistent with the information collection request (ICR) filed with the Office of Management and Budget pursuant to the Paperwork Reduction Act (PRA). In the existing ICR, the Department assumed that employers will hire a lawyer to complete the form, and it derived the average hourly salary for lawyers ($71.17) from the Occupational Employment and Wages Survey, May 2021 survey (released in March 2022), Table 1, from the Bureau of Labor Statistics (BLS), Occupational Employment Statistics (OES) Program. See: https://www.bls.gov/​oes/​current/​oes231011.htm. Further, the Department determined the total compensation (salary plus fringe benefits) by increasing the hourly wage rate by approximately 45.0%, which is the percentage total of the average hourly benefits compensation figure ($12.52 in December 2021) over the average hourly wage figure ($27.83 in December 2021). See Employer Costs for Employee Compensation Summary, September 2021 (released in December 2021), from the BLS at http://www.bls.gov/​news.release/​ecec.nr0.htm. Thus, the Department increased the totally hourly compensation for lawyers to $103.20 ($71.17 × 1.450).

As such, the average individual employer filing the LM-10 as modified under this proposal can expect to incur an increased cost per year of, approximately, between $8.60 ($103.20 × 5/60 = $8.60) and $25.80 ($103.20 × 15/60 + $25.80).

Although not all Form LM-10 filers will need to complete Item 12.b., the Department nevertheless estimates that each of the approximately 647 annual Form LM-10 filers (based upon a 5-year average of submitted reports) will incur the additional 5-15 minutes of annual reporting burden. See: https://www.dol.gov/​agencies/​olms/​data. As such, the overall cost of this proposed modification for all entities filing a Form LM-10 per year is between $5,564.20 ($8.60 × 647 reporting entities = $5,564.20) and $16,692.60 ($25.80 × 647 reporting entities = $16,692.60). The Department asks comment on this approach and where within this range the estimate should fall.

B. Summary of Costs

In sum, this proposed amendment to the Form LM-10 has an approximated 10-year cost of between $55,642.00 and $166,926.00 spread across 647 separate yearly Form LM-10 filers. OLMS does not believe that the cost of this proposed amendment to the Form LM-10 will cause a significant burden on reporting entities.

C. Benefits

The proposed amendment to the Form LM-10 will benefit employers in the filing of complete and accurate forms. By updating the form and instructions to clearly and accurately describe the information employers must disclose, the proposed form revision will facilitate filers' understanding and compliance, thereby reducing incidents of noncompliance and associated costs incurred when noncompliant.

The proposed amendment will also benefit filers' employees and the public. As has been discussed in Section IV above, the Department believes that its proposed amendment to the Form LM-10 will also bridge important information gaps that have appeared in Form LM-10 reporting. Primarily, the reporting requirements associated with the Form LM-10 already call for the reporting of an employer's contact and identifying information, as well as a “a detailed account of services rendered or promised . . .,” which the Department interprets as including the particular division or unit of employees subject to the persuader-related activity in question. The Department is acting because a purpose of the LMRDA, which the Department administers, is to satisfy “in the public interest, . . . the responsibility of the Federal Government to protect employees' rights to organize, choose their own representatives, bargain collectively, and otherwise engage in concerted activities for their mutual aid or protection.” 29 U.S.C. 401(a). Congress found that to accomplish this objective, “it is essential that labor organizations, employers, and their officials adhere to the highest standards of responsibility and ethical conduct in administering the affairs of their organizations, particularly as they affect labor-management relations.” Id. Congress simultaneously found that public reporting by employers was one way to accomplish this, given that the substance of employer persuader activities was often “unethical.” S. Rep. 187 at 11, LMRDA Leg. Hist. at 407.

The proposed revision to Form LM-10 would increase transparency regarding which Federal contractors and subcontractors are engaging in persuader activities. Confirming a filer's status as a Federal contractor, as well as its Unique Entity Identifier, as part of a full explanation of persuader activities will provide a method for the public, enforcement agencies and employees to quickly identify which Federal contractors are reporting persuader activities in a given year.

This increased transparency benefits the employees subject to the employer's persuader activity by giving them relevant information about the source of communications that seek to influence their rights—as intended by Congress in enacting the LMRDA. For example, employees have a particular interest in knowing whether their employers are Federal contractors because, as taxpayers themselves, those employees may not wish to be indirectly financing persuasion campaigns regarding their own rights to organize and bargain collectively. Although the persuader campaigns are not themselves reimbursable under the Federal contract or subcontract, the government is paying Federal dollars for goods and services, sometimes in large amounts, which supports such contractors' businesses. Additionally, by learning of the previously unknown Federal contractor status their employer enjoys, those employees would have the information that would allow them to meaningfully exercise their right to choose whether to contact their representatives in Congress about Federal appropriations underlying the contracts with their employers or work with advocacy groups or the media to disseminate their views as employees to a wider audience. This is consistent with Congress' expectations when enacting the LMRDA—that in the public interest, and consistent with First Amendment rights to speak out on these issues, citizens would have the benefit of public reports regarding employer conduct that falls in a “gray area.” S. Rep. NO. 86-187 at 11 (1959), reprinted in 1 NLRB, Legislative History of the Labor-Management Reporting and Disclosure Act of 1959, at 407 (persuader activities “should be exposed to public view, for if the public has an interest in preserving the rights of employees then it has a concommitant obligation to insure the free exercise” of those rights).

The requirement that an employer provide its Unique Entity Identifier, if it has one, will prevent confusion. Two or more employers may have a similar name. Individual employers often use multiple names, including trade, business, assumed or fictitious names, such as a DBA (“doing business as”) designation. All Federal contractors have their own individual identifiers to seek and secure Federal contracts.^[10] By requiring employers to provide this identifier, members of the public and employees will be able to confirm the true identity of the employer.

Increased transparency also allows procurement agencies to ensure that the employer is not charging the Government for, and receiving reimbursement for, these costs. This, in turn, informs the public of how Federal monies are spent and the safeguards in place to prevent taxpayer dollars from funding disruptions to harmonious labor relations, even if these activities are not unlawful. See S. Rep. 187 at 10-12, LMRDA Leg. Hist. at 406. Given the potential for disruption, the public, like employees, has an interest in knowing whether the government is indirectly funding persuader activity by engaging in business with these companies. The required disclosure of such information is consistent with and fully authorized by sections 203 and 208 of the LMRDA and their broad grant of authority to prescribe the form of the required reports. 29 U.S.C. 433, 438.

Knowledge of such information would also enable members of the public to understand which Federal agencies are contracting with employers who are engaging in persuader activity. The public and employees would benefit from knowing whether a specific Federal agency is choosing to do business with an employer that is attempting to influence the exercise of workers' rights to choose whether to organize and bargain collectively. This public exposure would allow for an open public discussion and debate about the prevalence of persuader activity and the extent to which specific Federal agencies might be indirectly supporting such activities by doing business with employers that engage in persuader activities.

Both the public and employees would benefit from knowing whether the government is choosing to do business with an employer that is frustrating, or influencing the exercise of, workers' rights to choose whether to organize and bargain collectively. It would help the public and employees to have access to full and transparent reports of such persuader expenses and activities.

D. Alternatives

There are three significant possible alternatives to the one checkbox and two lines that the Department is considering in drafting this proposed Form LM-10 modification: (1) no modification of Item 12, (2) only utilizing the checkbox modification, and (3) only utilizing the two lines. The first alternative, no modification to Item 12 at all, leaves the same reporting gaps described above and the Department believes that the public and employees are clearly served by the increased reporting. Moreover, the cost of the proposed modification is so small, especially as compared to the benefit of bridging the previously discussed information gaps, that the Department did not propose leaving the Form LM-10 as it was before the modification. The second alternative, only creating a new checkbox, would provide the public with some knowledge of which Federal contractors hired a persuader but without an easy method to identify the contractor through its Unique Entity Identifier and without a full explanation of the Federal contracting agency(ies) involved. Finally, the third alternative of adding the two lines—for entry of the Unique Entity Identifier and the Federal contracting agency(ies) involved—but not adding the checkbox would remove the clear benefit to the public and employees of ease of access involving the checkbox—as was discussed in Subsection C above, part of the benefit of the proposed modification is the ease of access to information about contractor status for the public. Without the proposed checkbox, there would be no easy way for the viewing public to search and identify relevant Form LM-10 filings. As such, the Department proposes that the full modification of Item 12 as outlined in this proposed form revision is necessary to fulfil the purpose of the Form LM-10.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601 et seq., requires agencies to prepare regulatory flexibility analyses, and to develop alternatives wherever possible, in drafting regulations that will have a significant impact on a substantial number of small entities. The Department has determined that this proposed form revision will not have a significant economic impact on a substantial number of small entities. The Department has estimated an increased cost per reporting entity of only $8.60 per employer. A five-year average of the number of employer filers for the LM-10 is 647. The Small Business Administration (SBA) standard average yearly receipts for a small business total $7.5 million.^[11] Assuming all 647 entities are small entities of less than $7.5 million in revenue, the total cost of $8.60 for all 647 entities would be $5,564.20 for the resulting changes from the proposed modification of Item 12 of the Form LM-10. Further using that figure of $7.5 million, the estimated increased cost per reporting entity—a minimum of $8.60 and a maximum of $25.80, as mentioned above—represents only between 1.15 ten thousandth and 3.4 ten thousandth of a percent of the $7.5 million in yearly receipts for the average small business. Even if each were a particularly small entity of only $100,000 in revenue size and each experienced the maximum cost of $25.80, that would constitute .0258% of entity revenue, which falls far below 3%, the significant impact threshold used in other OLMS rulemakings.^[12] Therefore, a regulatory flexibility analysis under the Regulatory Flexibility Act is not required. The Secretary has certified this conclusion to the Chief Counsel for Advocacy of the Small Business Administration.

C. Paperwork Reduction Act

This statement is prepared in accordance with the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501.

Summary and Overview of the Proposed Form Revision

The following is a summary of the need for and objectives of the proposed form revision. A more complete discussion of various aspects of the proposal is found in the preamble.

The Department proposes to add to the Form LM-10 report a checkbox requiring certain reporting entities to indicate whether they are Federal contractors or subcontractors, as well as related information.

The LMRDA was enacted to protect the rights and interests of employees, labor organizations and the public generally as they relate to the activities of labor organizations, employers, labor relations consultants, and labor organization officers, employees, and representatives. Specifically, employers are required to file to disclose the following in Form LM-10 filings, pursuant to LMRDA section 203 and subject to certain exemptions: payments and loans made to any union or union official; payments to any of their employees for the purpose of causing them to persuade other employees with respect to their bargaining and representation rights, unless the other employees are told about these payments before or at the same time they are made; payments for the purpose of interfering with employees in the exercise of their bargaining and representation rights, or obtaining information on employee or union activities in connection with labor disputes involving their company, except information obtained solely for use in a judicial, administrative or arbitral proceeding; and arrangements (and payments made under these arrangements) with a labor relations consultant or other person for the purpose of persuading employees with respect to their bargaining and representation rights, or obtaining information on employee or union activities in connection with labor disputes involving their company, except information obtained solely for use in a judicial, administrative, or arbitral proceeding.

The Department, pursuant to the LMRDA, seeks to fill in clear and present information gaps occurring in Form LM-10 reporting, regarding filers' Federal contractor status. As has been stated above, the Department is acting because it has a clear interest in understanding the full scope of activities undertaken by employers that enter into agreements to persuade employees not to exercise these rights, including whether they benefit from Federal contracts. In addition, separately reporting the contractor information will allow filers to quickly fill out the form with a higher level of specificity, which will allow for increased transparency, allowing the public and employees to understand whether employers engaging in the activities that require Form LM-10 reporting are party to a contract with the Federal Government.

Methodology of the Burden Estimate

For purposes of the PRA, the cost burden of the modification to the Form LM-10 proposed in this document has been calculated above and is as follows. Based upon the existing LM form estimates, the Department proposes that the modification to Item 12 will take no longer than 5 minutes to complete on average for approximately 647 filers in any given year, thus adding approximately 5 minutes of reporting burden to the existing Form LM-10 (which the current existing instructions estimate to take approximately 35 minutes to complete, including the current Item 12). The Form LM-10 is not an annually mandatory form for employers; rather, it is only necessary in fiscal years during which the employer engages in certain transactions or agreements. Further, the modification to Item 12 does not impact all Form LM-10 filers, just those that engage in persuader-related transactions—and only a subset of those filers would need to complete all of Item 12.b. In addition, only one Form LM-10 report must be filed per filing entity per necessary fiscal year. Thus, the proposed form revision does not impact the total number of Form LM-10 reports that the Department expects to receive, nor does it affect the recordkeeping burden, as the Department estimates that most employers that file and are Federal contractors or subcontractors must already retain records relevant to that status pursuant to Executive Order 13496 (Notification of Employee Rights Under Federal Labor Law). See 29 CFR part 471, in particular § 471.2(d), which states that employers must post the notice where employees covered by the National Labor Relations Act engage in activities relating to the performance of the contract. Instead, the proposed form revision would result only in an increase in reporting burden of 5 minutes per Form LM-10 and an overall increase of 3,235 burden minutes, or 53.9 burden hours, for Form LM-10 filers. However, as explained in the E.O. 12866 regulatory impact section, the Department seeks comment on whether the contractor status determination would require further review time, such as an additional 10 minutes to check with those on the employer's staff who conducted the E.O. 13496 review. If the form took an additional 15 minutes to complete the new Item 12, rather than the 5-minute estimate, then Form LM-10 filers would see an overall increase of 9,705 burden minutes, or 161.75 hours.

The proposed form revision will have no impact on the other 11 information collections approved under ICR #1245-0003. The summary of the burden below accounts for the burden for all ICs (reports) in ICR 1245-0003.

Conclusion

As this proposed form revision requires a revision to an existing information collection, the Department is submitting, contemporaneous with the publication of this document, an ICR to amend the burden estimates under OMB Control Number 1245-0003 and revise the PRA clearance to address the clearance term. A copy of this ICR, with applicable supporting documentation, including among other items a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov website at: https://www.reginfo.gov/​public/​do/​PRAOMBHistory?​ombControlNumber=​1245-0003 (this link will be updated following publication of this proposal) or from the Department by contacting OLMS at 202-693-0123 (this is not a toll-free number)/email: OLMSPublic@dol.gov.

Agency: Department of Labor, Office of Labor-Management Standards.

Type of Review: Revision of a currently approved collection.

OMB Number: 1245-0003.

Title of Collection: Labor Organization and Auxiliary Reports.

Forms: LM-1—Labor Organization Information Report, LM-2, LM-3, LM-4—Labor Organization Annual Report, LM-10, Employer Report, LM-15—Trusteeship Report, LM-15A—Report on Selection of Delegates and Officers, LM-16—Terminal Trusteeship Report, LM-20—Agreement and Activities Report, LM-21—Receipts and Disbursements Report, LM-30—Labor Organization Officer and Employee Report, S-1—Surety Company Annual Report.

Affected Public: Private Sector—Business or other for-profits and not-for-profit institutions.

Estimated Number of Annual Respondents: 32,791.

Estimated Number of Responses: 35,067.

Frequency of Response: Varies.

Estimated Total Annual Burden Hours: 4,644,785.

Estimated Total Annual Other Burden Cost: $0.

The Department invites comments on all aspects of the PRA analysis. The Department is particularly interested in comments that:

• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• The accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used, and the agency's estimates evaluate associated with the annual burden cost incurred by respondents and the government cost associated with this collection of information;
• enhance the quality, utility, and clarity of the information to be collected; and

• minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses.

Comments submitted in response to this document will be considered, summarized and/or included in the ICR the Department will submit to OMB for approval; they will also become a matter of public record. Commenters are encouraged not to submit sensitive information ( e.g., confidential business information or personally identifiable information such as a social security number).

D. Unfunded Mandates Reform

This proposed form revision will not include any Federal mandate that may result in increased expenditures by State, local, and tribal governments, in the aggregate, of $100 million or more, or in increased expenditures by the private sector of $100 million or more.

E. Small Business Regulatory Enforcement Act of 1996

This proposed form revision is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996. This proposal will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of the United States-based companies to compete with foreign- based companies in domestic and export markets.

List of Subjects in 29 CFR Part 405

• Employers
• Reporting and recordkeeping requirements

Note:

The following appendix will not appear in the Code of Federal Regulations.

Appendix A—Form LM-10

Footnotes