The information below is an important update on enforcement of the Persuader Rule. The information comes from one of our Labor Lawyer Advisory Committee (LLAC) members via the US Chamber of Commerce. All of this information is provided for your general information and understanding and should not be construed as legal advice.
The first resource is a link to a YouTube video in which the Office of Labor-Management Standards (OLMS) presents an overview of the Forms LM-10 and LM-20 persuader reporting requirements, pursuant to the persuader final rule published on March 24, 2016. OLMS held the presentation in the Department’s Frances Perkins Building, Cesar Chavez Auditorium, on Thursday, May 26, 2016 from 2-4 p.m. EDT
The final persuader regulation states, “This final rule is effective on April 25, 2016. The rule will be applicable to arrangements and agreements as well as payments (including reimbursed expenses) made on or after July 1, 2016” (emphasis added). The “effective” versus “applicable” dates are clearly confusing. As part of the legal challenge to the rule in the Eastern District of Arkansas, DOL filed the attached status report which clearly states that July 1 is the practical effective date:
While the effective date of the Rule is April 25, 2016, the rule is only applicable to arrangements and agreements made on or after July 1, 2016, and to payments made pursuant to arrangements and agreements entered into on or after July 1, 2016. 81 Fed Reg. 15924. The Rule revises the reporting requirements, and related recordkeeping requirements, for certain agreements and arrangements entered into between employers and labor relations consultants or other independent contractors, and payments made pursuant to those agreements and arrangements. The Department will not apply the Rule to arrangements or agreements entered into prior to July 1, 2016, or payments made pursuant to such arrangements or agreements. Consequently, under the Rule no employer, labor relations consultant, or other independent contractor will have to report or keep records on any activities engaged in prior to July 1 that are not presently subject to reporting, or file the new Forms LM-10 or LM-20 (revised pursuant to the Rule) for any purpose prior to July 1.
Employers may have a window of about 3 weeks to get agreements in place with labor counsel or consultants that then not be reportable under the new OLMS rule, assuming they are pursuant to an open-ended or multi-year agreements that existed before July 1, 2016. Again, this should not be interpreted as legal advice, and you should check with competent legal counsel before making any final decisions.