A component of the Labor Management Reporting and Disclosure Act (LMRDA) requires employers hiring someone to persuade employees on the exercise of their National Labor Relations Act Section 7 rights to annually disclose any financial agreements. Originally, “persuading” meant you had to directly meet with employees to turn the event into a reportable act. Merely giving advice to your employees was not considered persuading. The new Department of Labor “Labor-Management Reporting and Disclosure Act; Interpretation of the ‘Advice’ Exemption; Proposed Rule” (called the “Persuader Rule”) significantly expands the interpretation of persuading to include direct and indirect advice.
“Advise” Becomes Persuade
The final Persuader Rule implementation happened in April, at which time reporting requirements were greatly increased. “Advice” now includes “persuader activity,” referring to any consultant who provides material or communication, or any other type of support on your behalf, to directly or indirectly persuade employees concerning their right to organize or to collectively bargain. You will have to report to the Department of Labor (DOL) all disbursements to any third party for direct and indirect activities designed to influence (persuade) employees in the exercise of their rights to form, join or assist a union. The Persuader Rule applies to all unionized and non-unionized employers.
“Third parties” becomes a broad term referring to anyone providing HR-related advice, including attorneys and consultants like staffing consultants, Web designers and survey companies. Covered persuader activities include preparing written and digital materials for employees, conducting group employee meetings, training supervisors, developing HR policies and procedures, conducting workshops, etc. Reporting will be done via the LM-20 Agreement and Activities Report and the Form LM-21: Receipts and Disbursements Report. Filed financial statements will be published on the DOL website for anyone to review.
The new rules place an enormous burden on employers. Confidentiality between the employer and attorneys and consultants is lost by forcing companies to make public the money spent on union avoidance and normal HR activities. Other burdens include the cost of additional compliance reporting and public reporting of confidential employer financial information that could impact competitiveness. Employer reporting will be done via the LM-10 Employer Report filed once annually within 90 days after the close of the fiscal year. The rule also makes information available that unions would normally have to research, thus handing them a head start on targeting companies for unionization.
You can prepare for the implementation of the Persuader Rule in several ways, but time is of the essence. A first step is reviewing your current status and ensuring everything is being done to union-proof the company, from strengthening leadership skills to improving employee engagement and communication. Most importantly, you need to invest in union-free resources NOW, before the rule goes into effect, so those expenditures need not be reported. Once the Persuader Rule takes effect, almost every type of HR activity will be subject to scrutiny and reporting. Employers who do not prepare for the change will find they are easy targets for DOL sanctions and unions.
Skip the 446-page DOL document and get what you need to know in just a few minutes – Chris Craddock, President of Projections explains how the new Persuader Reporting Rules do (and don’t) affect your ability to communicate with employees.