There are currently two ways to find out how much money employers spend on reportable persuader activities: using the employer annual report (Form LM-10) in which individual dated payments to persuaders are itemized, or the annual consultant report (Form LM-21) in which the persuader reports how much they received from each employer for these activities. Unfortunately, the 2016 OLMS Special Enforcement Policy on persuader LM-21 filings remains in effect, continuing to greatly diminish the disclosure of persuader receipts.
What is the Form LM-21? Form LM-21 is the annual report filed by consultants within ninety (90) days of the close of their fiscal year; most, but not all, consultants use a January 1 – December 31 fiscal year. Therefore, most, but not all, LM-21s are due by March 30 of the year following the persuader activity.
What is reported in Form LM-21? In Form LM-21, consultants must itemize receipts by employers (Part B), disbursements (Part C) and payments to subcontractors (Part D).
What’s the problem with using Form LM-21 filings? The 2016 Office of Labor-Management Standards (“OLMS”) Special Enforcement Policy has suspended the requirement to report receipts and disbursements in Parts B and C, but not payments to subcontractors. Nonetheless, in the last two years, nearly half of those persuaders who bother to file a Form LM-21 indeed provide this information; the other half simply file but fail to report any receipts.
That’s just one problem. More importantly, in the past two years, about one half of those persuaders who file one or more LM-20 in a year and are therefore required to file an LM-21, actually do. In other words, if only one half of those required to file bother to do so, and only half of those in turn itemize receipts, that means only one-quarter of all persuaders are reporting receipts from the employers who hire them. That’s not a lot to go on.
What about Form LM-10? Form LM-10 is the employer report, due ninety days from the close of the employer’s fiscal year. The failure to file rate for Form LM-10, at least for calendar year 2021, currently is about 30% of those who “owe” an LM-10. This means disclosure of reportable persuader payments by employers is more extensive with the Form LM-10s than it is with Form LM-21. Also, where the employer hires multiple consultants, payments for all of them must be itemized.
To determine how many employers are required to file an LM-10, we use LaborLab’s database of LM-20 filings. If a consultant files an LM-20 in a given calendar year, they are, by definition, a party to a reportable persuader arrangement with an employer, who in turn therefore is obligated to file a Form LM-10. The mere filing of a single LM-20 form, in turn, requires that persuader to file a Form LM-21 for that calendar year.
Many persuaders hire subcontractors, who in turn are each required to file an LM-20. The filings for the same contractor by subcontracting persuaders are eliminated from the database to obtain a listing of unique employers. We also screen out duplicate filings for the same employer where the employer’s name is misspelled or a different name for that employer is used once or more. From this, we generated a list of employers who “owe” LM-10s in calendar year (“CY”) 2021 and 2022. Note that OLMS Annual Report statistics, https://www.dol.gov/agencies/olms/about/annual-reports, are for fiscal years, which run from October 1 to September 30 and therefore their totals will not jibe with calendar years.
We determined that 223 LM-10s were “owed” for CY 2021 and 187 LM-10s were “owed” for CY 2022. Note that this number may change as we locate additional LM-20s that are filed late (some are filed two or more years late as we have earlier documented!), or as we identify duplicate listings of employers (using a “doing business as” name on one filing and a different name on a second).
- For CY 2021, we have identified 166 LM-10 filings; 57 employers have still not yet filed.
- For CY 2022, we have identified 58 LM-10 filings; 129 employers have still not yet filed.
- Again, please keep in mind that some of the non-filers for CY 2022 may have fiscal years that end on dates other than December 31. But by now, all CY 2021 LM-10 filings should be in.
- Persuader payments for CY 2021 according to the LM-10s studied total $29,698,946, but keep in mind that there are still a lot more filings yet to be received which will obviously add to the total.
The top three reportable persuader payments for CY 2021 and the persuader consultants according to the LM-10s were:
- Amazon: $4,259,472 (multiple persuader consultants)
- Grocery Delivery E-Services: $1,638,357 (Kulture)
- Keurig Green Mountain: $1,602,279 (Greer)
Persuader payments for CY 2022 year to date according to the LM-10s studied total $22,102,533, with a lot more yet to come in. Note that the top three listed below account for 78% of all reported payments for CY 2022 so far:
- Amazon: $14,279,056 (multiple persuader consultants)
- McLean Hospital: $1,711,388 (multiple persuader consultants)
- Rochester Health Center: $1,303,527 (HealthCare Labor Solutions)
We will continue to monitor CY 2021 and CY 2022 LM-10 filings and report our findings. Please keep tuned.
Published April 3, 2023