Per capita taxes paid by the national and international unions of the AFL-CIO make up the AFL‑CIO’s principal income. This system of financing is predicated on principles of democratic participation, fairness and accuracy: The AFL-CIO Convention establishes the amount of the tax; larger affiliates pay a relatively larger overall share of the tax; and every affiliate obligates itself to report and pay on behalf of all individuals whose dues are subject to the tax.
The AFL-CIO Constitution establishes a specific amount of per capita tax on each affiliate’s “full paid-up membership” (Art. VI, Secs. 1 and 2). This membership includes all such individuals who are connected with a U.S. affiliate of an AFL-CIO national or international union. The Constitution also authorizes the Executive Council to prescribe the per capita tax owed by affiliates on their “categories of associate and retired membership,” that is, categories of individuals who “are not treated as regular members” of the union because they are not accorded the “full range of international political rights,” “pay lesser dues than do individuals in the most comparable regular membership category” and “receive less than the full range of the union’s representational services” (Art. VI, Sec. 3).
The Secretary-Treasurer annually surveys all AFL-CIO national and international union affiliates to determine the scope and details of their membership practices. Meanwhile, the U.S. Department of Labor has revised its annual union LM reporting rules to require unions to list and report separately the numbers of individuals in each of their membership categories and their respective dues rates, as well as the number and rates applicable to agency fee-payers. This AFL-CIO survey and recent LM reports indicate that AFL-CIO affiliates use more than sixty kinds of terminology to describe categories of regular members, at least seven to describe associate members and at least ten to describe retired members.
Although different affiliates have different categories of working, active or otherwise “regular” members, they commonly understand that whatever the particular categorical label, and however these members are distinguished within the affiliate, they are included in the affiliate’s “full paid-up membership” for AFL-CIO per capita tax purposes. The affiliates’ overall record of compliance with this per capita tax requirement is strong and appreciated, and reflects that this financing system is widely considered to be equitable and necessary.
The Constitution was amended in 1999 to confer upon the Executive Council its current discretionary authority to establish different per capita tax rates for associate and retired members in order to promote affiliates’ expansion of programs tailored to those members. For many years previously, the Constitution provided that affiliates pay the AFL-CIO two-thirds of the regular-member per capita tax on associate members, and it was silent as to retirees who were not also regular members. As explained when the Convention eliminated the uniform two-thirds rate, however, that rate would continue to apply unless and until the Council acted on the matter. Since then, the Council on one occasion has set a different rate for a national union affiliate: At its March 2007 meeting, the Council approved a 10 cents per month associate-member per capita tax for the National Postal Mail Handlers Union because that affiliate sponsors the participation of several hundred thousand individuals as its associate members in the Federal Employees Health Benefits Program, and these associate members pay 51 cents per month in dues to NPMHU to access that plan.
Notwithstanding the length of time during which affiliates have been obligated to pay per capita tax on their associate and retired members, the Secretary-Treasurer’s survey and our experience indicate that there remains ambiguity about the scope of this requirement and inconsistent practices in complying with it. Most affiliates have no associate members, and those that do treat them in widely varying fashions. All affiliates have retirees, but they treat them over the full range, from full regular membership to no recognition or involvement at all.
It is appropriate and necessary, then, that the Council clarify the associate and retired membership per capita tax obligations in order to achieve both fairness and reliability. Application of this per capita tax requirement to an affiliate should depend upon two factors:
First, whether the affiliate maintains either category of membership, including under a different title; and
Second, whether the associate or retired members in that category pay an amount of dues on any ongoing basis to the affiliate.
Application of these two factors ensures that a per capita tax requirement is imposed only upon categories of membership that both are authorized by the Constitution and involve the affiliate itself receiving dues from the members in those categories. By definition, all such covered individuals would satisfy at least one element of the Article XVI, Section 3 description of the differences between these membership categories and regular members. On the other hand, in cases where individuals in an associate or retired membership group pay full dues to the affiliate, which is usually accompanied by the exercise of full political rights within the organization, the members would be treated as regular members for purposes of the affiliate’s per capita tax to the AFL-CIO, as has always been required.
Every affiliate that maintains an associate or retired membership category under any title should pay a per capita tax to the AFL-CIO on these members at the two-thirds rate. An affiliate that believes special circumstances warrant the Council setting a different rate on a particular category of associate or retired members may submit a request to the Secretary-Treasurer. The Finance Committee of the Council will consider the request in consultation with the affiliate involved and make a recommendation to the Council regarding the appropriate rate of per capita tax. Any resulting Council action will operate only prospectively.
The Secretary-Treasurer’s review of ongoing affiliate per capita tax practices also revealed some inconsistency with respect to agency fee-payers. The AFL-CIO has long interpreted the constitutional obligation that an affiliate pay regular per capita tax on its “full paid-up membership” to cover these agency fee-payers because they typically pay either the equivalent of dues or a near-equivalent amount, by law they enjoy workplace representation commensurate with that of regular members, they are regularly recruited to join their union and the Constitution tracks the “membership” terminology in federal labor law, which applies to both regular members and represented agency fee-payers. Affiliates appear to be paying on most agency fee-payers, but it is useful to clarify that the Constitution imposes a full regular per capita tax with respect to these individuals. Accordingly, every affiliate should ensure that its regular per capita tax to the AFL-CIO reflects all of its agency fee-payers.
The AFL-CIO’s monthly per capita tax and assessment form will be revised to more accurately reflect and implement these per capita tax policies to facilitate the full and fair payment of affiliates’ financial obligations to the AFL-CIO.
