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Federal Register / Vol. 86, No. 248 / Thursday, December 30, 2021 / Rules and Regulations
law, agencies may consider and discuss qualitatively values that are difficult or impossible to quantify, including equity, human dignity, fairness, and distributive impacts.
A. Costs of the Form T1 for Labor Organizations
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As described in the 2020 Form T1
final rule, the Form T1 is filed by Form LM2 filing labor organizations with trusts that meet the dominance test, if those labor organizations are not otherwise exempted from filing. Cost savings discussed below concern the costs incurred by labor organizations to file the Form T1 reports in subsequent years assuming that filers have already incurred many of the first year costs discussed in the 2020 rule.13 As a result of the Department rescinding the Form T1, the affected labor organizations would save these future costs. Using data from LM2 filings, the Department estimated, in the 2020 Form T1 final rule, that there are at least 810 total affected labor organizations i.e., LM2
filers with trusts for which they must submit at least one Form T1. The Department estimated in the 2020 rule that each affected labor organization would be responsible for an average of 2.56 Form T1 filings. Additionally, each affected labor organization would spend approximately 84.12 hours in each subsequent year to fill out the Form T1.14 The average hourly wage for Form T1 filers, as with Form LM
2 filers, includes: $37.89 for an accountant, $20.25 for a bookkeeper or clerk, $25.15 for a Form LM2 filing union secretary-treasurer or treasurer, and $29.21 for the Form LM2 filing president, respectively.15 The weighted average hourly wage is $36.53.16 To account for fringe benefits and overhead costs, as well as any other unknown costs or increases in the wage average, the average hourly wage has been multiplied by 1.63, so the fully loaded 13 To the extent they have not already incurred those costs, the savings set out in text would be greater.
14 For more details, see the Paperwork Reduction Act section below.
15 Wage rates are derived from 2018 data; more specifically, the president and treasurer wage rates are determined from FY 19 Form LM2 report filings, while the accountant and bookkeeper wage rates come from 2018 Bureau of Labor Statistics BLS data available at: https www.bls.gov/oes/
2018/may/oes_nat.htm.
16 The weighted average calculates the wage rate per hour weighted according to the percentage of time that the Form T1s completion will demand of each official/employee: 90 percent of the Form T1 burden hours will be completed by an accountant, 5 percent by the bookkeeper, 4 percent by the unions treasurer/secretary-treasurer, and 1
percent by the union president.

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hourly wage is $59.54 $36.53 1.63 =
$59.54.17
Therefore, the cost for each Form T
1 filer in subsequent years would be $12,822 2.56 84.12 $59.54 =
$12,822, which would be eliminated if the Department rescinds the Form T1, as proposed.
B. Summary of Costs This final rule would save 810 Form LM2 filers a total of $10,385,820
annually. The 10-year annualized cost is expected to be $10,285,704 at a 3
percent discount rate and $9,608,788 at a 7 percent discount rate.
C. Benefits As explained more fully in the preamble to this final rule, the Department rescinds the Form T1, as the 2020 Form T1 final rule was duplicative of other existing reporting requirements, did not prevent the circumvention or evasion of the LMRDA
reporting requirements, and provided no evidence that it detected or deterred labor-management fraud or corruption.
Rather, the Department believes that existing reporting requirements adequately address these concerns.
Further, rescission of the 2020 Form T
1 rule provides labor organizations with additional resources to devote to existing reporting requirements.
D. Alternatives and Comments Received As mentioned in the NPRM
concerning potential alternatives to rescinding the Form T1, the Department could maintain the existing Form T1 or propose a scaled back version. The retention of the Form T1
would retain the burdens discussed in the 2020 Form T1 rule, and the Department now considers that these burdens are not justified by the purported benefits. Rather, the Department now believes that existing reporting provides much if not all of the potential benefits of the Form T1.
Further, while a scaled back Form T1
would reduce such burdens, the Department did not consider this approach, since the current Form T1
already contains multiple exemptions and burden-reduction components.
17 The use of 1.63 accounts for 17 percent for overhead and 46 percent for fringe. In the case of the 46 percent for fringe, see the following link to BLS data showing that wages and salaries represent 68.6 percent .686 of compensation https
www.bls.gov/news.release/ecec.t02.htm. Dividing total compensation by the 68.6 percent represented by wages and salaries is equivalent to a 1.46
multiplier. Adding a 17 percent multiplier .17 for overhead equals 1.63.

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The Department did not receive any comments that specifically address the NPRMs regulatory impact analysis.18
Regulatory Flexibility Act The Regulatory Flexibility Act of 1980, 5 U.S.C. 601 et seq., requires agencies to prepare regulatory flexibility analyses, and to develop alternatives wherever possible, in drafting regulations that will have a significant impact on a substantial number of small entities. The Department has determined that this final rule will not have a significant economic impact on a substantial number of small entities because the final rule contains no new collection of information. Rather, it only relieves the additional collection burden imposed upon labor organizations through the rescission of the regulations published on March 6, 2020.
The 2020 Form T1 rules Final Regulatory Flexibility Analysis FRFA
considered whether it would place a significant impact on a substantial number of small business entities. That rulemaking analysis considered a labor organization a small business entity if they had average annual receipts of less than $8 million.19 Based on previous standards utilized in other regulatory analyses, the threshold for significance was set at 3% of annual receipts, while a substantial number of small entities would be 20 percent. The 2020 Form T
1 final rule at the time would have impacted 2,009 labor organizations at least $250,000 in size by annual receipts, with at least one trust, resulting in approximately 2,070 Form T1 reports. Of these organizations, 1,667 had annual receipts less than $8
million. There were only 315 LM2
filers with at least one trust whose annual receipts were small enough that the Form T1 costs would amount to more than a 3 percent impact. The largest of the 315 had annual receipts of $614,813 for a 3.01 percent impact. The smallest of the filers had $253,475 in annual receipts for a 7.30 percent impact.
Thus, the rule would have impacted 18.90 percent of small business entities in the first year. In all subsequent years, the percentage of small entities significantly impacted is 8.94 percent 149 out of 1,667 small entities. Both these figures would have been below the threshold to constitute a substantial 18 One comment in support of rescission contended that the Form T1 rules estimates of the burden hours for the form should have been doubled or more, and the commenter noted the logistical difficulty of getting information from the interested trust to the labor organization.
19 See https www.sba.gov/document/support-table-size-standards.

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