Fifty-fifth Legislature

Second Regular Session

Senate: COM DPA/SE 5-3-1-0 | 3rd Read 16-12-2-0

SB 1278: labor organizations; fiduciary guidelines; definitions

Sponsor: Senator Mesnard, LD 17

Committee on Commerce


Provides a definition of labor organization as it relates to fiduciary guidelines.


A labor organization that collects benefit monies or union dues is subject to similar fiduciary guidelines as required by employers or third-party administrators providing benefits to employees in Arizona, including all of the following:

1)   to annually disclose certain information to its members and its members' employers;

2)   to use generally accepted accounting principles in its benefit plans to account for benefit funds in a similar method as required by an employer benefit plan;

3)   allow a member to obtain health and welfare, pension, vacation, sick or holiday benefits of the members choosing;

4)   to require any fringe benefit contributions that a union receives, that are in excess of the costs that the union incurs with respect to that fringe benefit, be refunded to the employee or deposited into a defined contribution plan;

5)   prohibit the acceptance of dues or benefits contributions for employees who have not voluntarily joined the labor organization;

6)   prohibit the consideration of an individual being a member of a labor organization without the individual's written consent.

The prescribed fiduciary guidelines apply to any labor organization that is collecting benefit monies or union dues on behalf of Arizona residents or an employer that is domiciled within Arizona. The fiduciary guidelines do not apply to labor organizations for employees working for the state, a political subdivision or the federal government (A.R.S. 23-1421).

☐ Prop 105 (45 votes)	     ☐ Prop 108 (40 votes)      ☐ Emergency (40 votes)	☐ Fiscal NoteProvisions

1.   Defines labor organization, in relation to prescribed fiduciary guidelines, to include:

a)   any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment or other conditions of employment; and

b)   any Taft-Hartley act trust benefit plan that is jointly operated by a labor organization. (Sec. 1)

2.   Excludes, from the definition of labor organization, employer-sponsored benefit plan that is not managed by a labor organization. (Sec. 1)

3.   Makes technical and conforming changes. (Sec. 1)




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SB 1278

Initials PRB/JL Page 0 Commerce


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