§502 Bonding of Officers and Employees of Labor Organizations; Amount, Form, and Placement of Bonds; Penalty for Violation

Summary

Unions must require any officer, agent, shop steward, representative, or employee who handles union money or property to have a bond that protects against theft or fraud. Unions with property and yearly receipts of $5,000 or less are exempt. Each bond is set at the start of the fiscal year and must be at least 10 percent of the funds handled by that person and any predecessor in the prior fiscal year, but no more than $500,000. If there was no prior fiscal year, the minimum is $1,000 for a local union and $10,000 for other unions or related trusts. Bonds must be individual or schedule forms and backed by an approved corporate surety. No one without a bond may handle union funds or property. Bonds cannot be bought through an agent or broker or from a surety in which the union or its officers have any direct or indirect interest. The surety must hold authority from the Secretary of the Treasury under sections 9304–9308 of title 31, unless the Secretary approves a different bonding plan that gives equal protection at the same or lower cost. Anyone who willfully breaks these rules can be fined up to $10,000, jailed for up to one year, or both.