Under the federal Lobbying Disclosure Act (“LDA”), an organization or lobbying firm must register if it employs an individual who meets the definition of a “lobbyist” and if its total expenses or income for lobbying activities meet certain monetary thresholds. Usually, the two non-monetary thresholds determining when an individual becomes a “lobbyist,” discussed below, are the primary factors that determine when an organization or lobbying firm must register. However, the monetary thresholds, which were recently increased from $14,000 to $16,000 for organizations employing lobbyists and from $3,000 to $3,500 for lobbying firms, may affect the registration obligations of entities that engage in only a de minimis amount of lobbying.
Under the LDA, an employee of an organization or lobbying firm qualifies as a lobbyist by satisfying both elements of a two-prong test:
- The individual made two or more federal lobbying contacts on behalf of the organization (for in-house employees) or a firm client (for lobbying firms) at any time; and
- That individual spent 20% or more of his or her work time for the organization (for in-house employees) or that particular client (for lobbying firms) engaged in federal lobbying activities during any three-month period.
If both prongs of the test are satisfied, the individual qualifies as a “lobbyist” for LDA purposes and the organization or lobbying firm likely must register under the LDA, listing that lobbyist and the organization/client on its registration and disclosure reports.
Although employing a lobbyist usually triggers registration by the employer, the LDA exempts from registration organizations employing in-house lobbyists that spend no more than $16,000 (recently increased from $14,000) on lobbying activities in a quarterly period. For lobbying firms, the threshold is now $3,500 (recently increased from $3,000) in income from a client for lobbying activities in a quarterly period. These thresholds are indexed for inflation every four years and rounded to the nearest $500. However, this is the first time the lobbying firm threshold has been raised since 2013. The new $16,000 threshold for organizations and $3,500 threshold for lobbying firms are effective as of January 1, 2025.
Because these monetary thresholds are low, compensation associated with employees who meet the relatively high threshold of becoming a “lobbyist” under the two-prong test will almost always cross these thresholds. But for certain smaller organizations or non-profits, this threshold may be a factor in the LDA registration decision, as it may be for lobbying firms with a de minimis amount of activity on behalf of a particular client. These monetary thresholds also exempt lobbying firms from triggering registration on behalf of certain pro bono clients.
The application of the LDA’s registration thresholds and triggers involves a detailed analysis of the activities of an organization or a firm, which must consider the broad and multi-factored definition of a “lobbying contact,” and the even broader definition of “lobbying activities.” Covington regularly advises clients on LDA registration requirements as applied to those clients’ activities. If you have any questions on whether you or your organization are required to register under the LDA, please reach out to a member of our Election and Political Law Group.