California Wage and Welfare Bond
Protect your employees with this surety bond!
What is a California Wage and Welfare Bond?
Also known as Fringe Benefit Bond, the California Wage, and Welfare Bond is part of a collective bargaining agreement between an employer and a union. This type of bond is not required by any federal or state statute.
The purpose of this surety bond is to ensure that the employer will continue to make fringe benefit contributions to a union’s trust fund. The bond will also cover salaries and wages.
Fringe benefits are extra compensations that are provided by an employer to eligible employees. The following are some examples of fringe benefits:
- Retirement plant/pension
- Educational assistance
- Health and welfare
- Child care assistance
- Subsidized meals
How does a California Wage and Welfare Bond work?
The California Wage and Welfare Bond will be a legally binding agreement between three parties, namely:
- Principal – The business owner or employer. The principal will be the one to obtain the bond.
- Obligee – The union. The obligee is the beneficiary of the bond.
- Surety – The surety bond provider.
The surety is the party that will guarantee the commitment of the principal in making such contributions for the benefit of the obligee. The bond will cover the payment of salaries and wages as well.
If the principal defaults on the said obligations, the obligee will be eligible to file a bond claim to receive the necessary monetary compensation.
How much does a California Wage and Welfare Bond cost?
The bond premium will depend on the bond amount. The bond premium can be lower or higher depending on the Principal’s (employer) credit score. Typically, the bond premium will start at 2% of the total bond amount.
The bond amount will depend on what was agreed upon, taking into consideration the amount of the contribution needed and the number of employees.
In most cases, the contribution will be broken down into a per-hour amount per employee. The contribution will usually be added to the basic per-hour wage.
If you have determined your bond amount, you may check your bond premium by getting your FREE SURETY BOND QUOTE HERE!
How can I get a California Wage and Welfare Bond?
To secure this type of bond, the principal must seek the assistance of a surety bond company.
You will be asked to apply for this bond. If you’re ready to apply for one right now, you may easily do so HERE!
Once the application is received, the surety bond company will immediately process it. In our case, one of our expert surety bond agents will guide you through the whole process from the time you applied for the bond.
An underwriter will then evaluate the following:
- Your financial strength
- Your job/business performance history
- Your credit score
Once the prequalification process is fulfilled, we will execute the bond and send it to you!
Ready to apply for your surety bond? START HERE!