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

Summary

Labor organizations must make sure officers, agents, shop stewards, representatives, or employees who handle money or property are covered by a bond that protects the group against theft or dishonesty. Small groups whose property and yearly receipts do not exceed $5,000 are exempt. Each bond amount is set at the start of the group’s fiscal year. It must be at least 10% of the funds handled by that person and any predecessor during the last fiscal year, but no more than $500,000. If there was no prior fiscal year, local groups must have at least $1,000 and other groups or related trusts at least $10,000. Bonds must be individual or schedule form and backed by a corporate surety approved under sections 9304–9308 of title 31. No one without bond coverage may handle the group’s funds or property. The Treasury Secretary can allow other equivalent bonding arrangements at equal or lower cost. Anyone who willfully breaks these rules can be fined up to $10,000, jailed for up to one year, or both.