Labor Unions are incorporated with the sole purpose of helping the employees, particularly the less-skilled workers who are mostly ignored in the company. Companies take them for granted and don’t care for their development or progress. Labor unions are meant to achieve or maintain benefits through collective action because it will be impossible for a single worker to bargain with the employer alone.
Many unions were incorporated, targeting specific industries. So, these unions worry about employees’ well-being who work in different companies of this particular industry. Members of the union pay some fees so that the union can manage to introduce different programs and initiatives that will help the employees. As money is involved in these unions, accounting is also mandatory to keep track of the revenue and expenditures.
Let’s discuss more labor union and Labor union accounting:
A labor union is considered an organization that consists of workers from different organizations who have come together for one single purpose of safeguarding their interests in the company. The sole purpose is that the employer can’t exploit them.
The main motive of these organizations is to deal with matters of mutual interest in front of the employers. The topics of discussion are generally related to wages, benefits, and working conditions. Labor unions play a critical role in negotiations with the employer, and they always try to safeguard the rights of the employees.
According to US laws, it has become mandatory for labor unions to maintain a financial statement every year. This will give the government and the outsiders an overview of the labor union transactions. Considering the present scenario, labor unions must take the help of accounting to keep track of the organization’s transactions. This will prevent the organization from any kind of fraud and malpractice.
Here we will learn about the financial statements of labor unions in brief:
A labor union’s financial statement records various transactions that include salaries of the labor union employees, including the total amount of dues, received, assets and liabilities, receipts and disbursements, disbursements meant for political parties, charitable gifts, and grants.
One of the best parts of labor union accounting is that they also mention the percentage of time spent by the labor union employees to protect the rights of the members in their respective companies. The whole purpose of disclosing the time is to ensure the members that the employees of the union are devoting a sufficient amount of time to working for their rights. Through this, employees get to know that their money is going in the right direction.
Rather than financial statements, labor unions also have to submit other reports that are essential for an organization to run in full force without legal troubles. The labor departments expect that the unions will provide reports on organizational structure, such as constitution and bylaws, in order to fulfill their reporting obligations under the LMRDA.
In order to work according to the rules imposed by the government, full disclosure is mandatory; therefore, it is always preferable to fully disclose the financial statements of the organization. Apart from the government, the financial statement of the union should also be accessible for employers and Union employees. They must also get access to the documents that support the union’s structure and organization.
When a union organizing campaign is arranged, the employers have the right to analyze the LM-2 report of the labor union. This report helps the employer to get informed about different factors that support the company’s position. It will convince the employees to vote against union representation.
Financial statements are useful for gaining knowledge regarding the money received through dues in the labor union. All this information is recorded and is made public so that outsiders can review the performance of the union. Not disclosing these reports is a crime, and if an organization is recording false statements in its financial reports, it is also considered illegal.
So unions must keep the rules of the government in mind while working on the reports and try to avoid doing things that can attract legal trouble.
Labor union accounting is mandatory for maintaining and keeping track in the transactions to ensure that the union is going in the right direction. Despite the accounting reports, the labor unions are also responsible for disclosing other things as per the government’s laws. Unions that are not maintaining financial statements might fall into legal troubles in the long run.