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December 23, 2003

AFL-CIO Seeks Injunction Against Department of Labor Regulations That Pose Unfair Financial Burden On Unions - Court Hearing Scheduled December 30

New Financial Reporting Requirements May Cost $Thousands Equity Preparing To Comply, Says Guy Pace

The AFL-CIO announced that it is seeking an injunction against the Department of Labor, to stop new financial reporting requirements that were recently enacted by US Secretary of Labor Elaine Chao. The Federation called the new "LM-2" reporting requirements "onerous" and "overly burdensome" for 5,500 labor organizations that will be affected by the regulations, including Actors' Equity.

Equity's Assistant Executive Director, National Administration and Finance, Guy Pace, said that Equity was monitoring the injunction yet preparing to comply with the new regulations. "The fact is, in addition to the current LM-2 forms, we also file a Form 990 with the IRS; conduct an annual independent certified audit; and publish each year an annual financial report together with a copy of our certified audit in the Equity News and on our website (www.actorsequity.org). This is redundant reporting which we believe is being implemented simply to harass unions. In my 25 years at Equity, there has never been a single instance of any member not receiving any financial information they've requested. There's never been a complaint."

Since 1959, all unions have been required to file annual financial reports with the Department of Labor. These reports require them to disclose income and expenditures as part of an "open book" policy to avoid corruption - much more information than is required of corporations! "Under the new regulations, unions will be forced to give massive additional details to the DOL (Department of Labor) at huge administrative expense - which we believe will not clarify or give a more accurate picture of the union's finances," added Pace.

Equity's Comptroller, Joe De Michele, calculates that the new forms will result in a 10-fold increase in the amount of paper work and staff time. (The AFL-CIO estimates that implementing the new regulations will cost its unions over $700 million). "These are additional expenses that have not been budgeted and will probably require additional staff to be hired in the accounting departments."

A hearing has been scheduled for December 30 in Washington, DC. "Needless to say, we are monitoring this situation very closely," said Pace.


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