ARIZONA HOUSE OF REPRESENTATIVES Fifty-fifth Legislature First Regular Session
	Senate: COM DP 5-4-0-0 |3^rd Read 16-14-0-0 House: COM DPA 6-4-0-0

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SB 1268: labor organizations; fiduciary guidelines; disclosure

Sponsor:  Senator Petersen, LD 12

Caucus & COW

Overview

Subjects labor organizations that collect benefit monies or union dues to certain fiduciary guidelines.

History

Pursuant to the Arizona State Constitution, Article 25 and A.R.S. § 23-1302, no person shall be denied the opportunity to obtain or retain employment because of non-membership in a labor organization, nor shall they be excluded, by way of agreement, from employment or the continuation of employment by any entity because of non-membership.

The federal Labor-Management Reporting and Disclosure Act requires labor organizations file a financial report annually that is signed by its president and treasurer. The annual report must be filed with the U.S. Secretary of Labor and must include:    

1) Assets and liabilities and the beginning and end of the fiscal year;

2) Any receipts and sources thereof;

3) Salary, allowances and other direct or indirect disbursement to each officer and employee receiving more than $10,000 from the labor organization and any affiliated organization;

4) Loans greater than $250 made to an officer, employee or member;

5) Loans made to a business enterprise; and

6) Other disbursements.

A labor organization must make the required information available to all members (29 U.S.C. § 431).

Provisions

Labor Organizations; Fiduciary Guidelines (Sec. 1)

1. Subjects a labor organization that collects benefit monies or union dues to fiduciary guidelines similar to those required by employers or third-party administrators providing benefits to employees, including the following:

a) Requires the labor organization to annually disclose specified information to its members and its members’ employers;

i. Provides further requirements for the annual disclosure.

b) Requires the labor organization benefit plan to use generally accepted accounting principles to account for benefit funds;

c) Permit a member of a labor organization to obtain health and welfare, pension, vacation, sick or holiday benefits of the member’s choosing instead of the benefits offered by the labor organization;

i. Asserts the member has ultimate discretion in choosing benefits.

ii. Provides requirements for withhold payments based on the members choice.

d) Directs any fringe benefit contributions that a union receives that are in excess of the costs the union incurs with respect to that fringe benefit to, within 75 days after the end of the year: 1) be refunded to the employee, or 2) be deposited into a defined contribution plan;

e) Prohibits a labor organization from accepting dues or benefits contributions for employees that have not voluntarily joined the labor organization;

f) Grants any resident of this state standing in court against the labor organization for moneys that are paid to a labor organization on behalf of the resident without consent;

g) Prevents, without affirmative written consent, an individual from being considered as a member of a labor organization or have any union dues or benefits withheld; and

h) Specifies an employee or an employer may not pay any penalty or fee related to abstention or resignation from labor organization membership.

2. Specifies the fiduciary guidelines apply to any labor organization that is collecting benefit monies or union dues on behalf of a resident or an employer that is domiciled within Arizona.

3. Specifies the fiduciary guidelines do not apply to employees working for the state, a political subdivision of the state or federal governments.

4. Asserts a member or employer is not obligated to contribute union dues or monies for training or other benefits during any time the labor organization is in violation of fiduciary guidelines.

5. Deems a labor organization in violation of fiduciary guidelines for more than 30 days to have forfeited their claim on the benefit monies that the member or the employer is otherwise obligated to contribute.

6. Specifies that the non-obligation to contribute benefit monies or union dues does not allow a member or employer to halt contribution for outlined benefit categories and that a labor organization does not forfeit its claim on benefit monies or dues unless in accordance with an election made by the member.

7. Defines benefit category to include any combination of one or more of the following:

a) Health and welfare;

b) Pension;

c) Vacation, sick or holiday;

d) Training; and

e) Other.

8. Specifies that benefit categories may vary for each labor organization.

9. Contains a severability clause. (Sec. 2)

Amendments

Committee on Commerce

1. Excludes, from being subjected to fiduciary guidelines, labor organizations or associations whose membership includes primarily public employees.

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5.                   SB 1268

6. Initials PRB           Page 0 Caucus & COW

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