Non-signatory employers

[Guest DAASpirit]

Issues: A new contractor remits contributions to our Funds - as per policy, a request for the company's signature page of their CBA is forwarded to the respective Union. The Union responds, 'No Contract'. It is confirmed with the hall that no agreement exists between the Union and the company. What is the basis for the Funds to collect contributions from the company? Now comes the domino effect: How does a plan administrator go about verifying the contributions from the non-signatory through a payroll compliance audit? How does the Delinquency Department or Fund counsel pursue the company for possible delinquent contributions if the company inconsistently reports (i.e. contributions are remitted for August, no report filed for September, October but remits for December - reporting gaps)? Does the Fund Office credit hours for future unreported hours claims by members that may have worked for this non-signatory?

Ultimately my question is this...Do the Funds accept or <gulp> refund the contributions in this case? (I gulp at whether these are actually plan assets) I understand that this is a widespread problem that is both procedural and political in nature. I am especially fearful for the Funds' position when considering Lawrence Beebe's evaluation of the insolvency of Roofers Local Union 30 citing inadequecies of the Roofers' organizers/Business Agents to follow through.

Advice? Similiar problems?

[KJohnson]

I would check out 302©(5) of the LMRDA. In order for the payment of the contributions not to be a criminal violation the:

"detailed basis on which such payments are to be made is specified in a written agreement with the employer"

[Effen]

These are all good questions that should be addressed to your Fund's legal counsel.

[Bill Ecklund]

Does the union say "no contract" because it has expired and a new contract is being negotiated, or because the employer is non-union. If the employer is non-union and the fund wants to cover the employees, you should enter into a participation agreement that spells out the classes of employees that are covered. That agreeemnt will also provide for delinquency collection procedures and should allow for a payroll audit. It is quite common for multiemployer funds to have participation agreements with contributing employers to cover the NBU's. If this is a pension plan, keep in mind that there are discrimination rules that apply with respect to coverage. If it is health fund you have potential mewa issues. The trustees have to determine if they want to provide coverage. If they do the fund can accept the contributions with a participation agreement. Union trustees are generally not inclined to allow a non-union employer in the fund.

[Guest DAASpirit]

I would check out 302©(5) of the LMRDA. In order for the payment of the contributions not to be a criminal violation the:

"detailed basis on which such payments are to be made is specified in a written agreement with the employer"

Thank you!

[Guest DAASpirit]

These are all good questions that should be addressed to your Fund's legal counsel.

Done. Fund counsel is extremely wary of refunding the contributions and advised that these issues be taken in front of our Trustees. I am putting together a report outlining a particular case where contributions were received in this manner.

It was stated by counsel that this is a 'widespread' problem that has been struggled with by Funds for many years. In every other instance that I've encountered a non-signatory the basis for accepting the contributions was the contractor's execution of our certification clause on our benefit reporting forms that essentially binds the employer to the respective CBA and our Trust Agreements. In this case, the company does not have a written agreement and refuses to execute the reporting forms.

Thanks for the advice, but addressing the issue with Fund counsel was, of course, the next logical step.