California LLC Employee/Worker Bond
Learn why this bond is required for your business and how to easily get one!
What is a California LLC Employee/Worker Bond?
It is a license requirement enforced by the Contractors State License Board of the Department of Consumer Affairs of the State of California.
Since the passing of Senate Bill 392, the Contractors State License Board obligates Limited Liability Companies to obtain this bond for the issuance of both active and inactive LLC licenses, reissuance, reinstatement, reactivation, and renewal of an LLC license.
This bond will serve as a protection for the employees or workers of the licensed LLCs in case the licensee fails to pay the salaries, wages, fringe benefits, and other contributions.
Compliance of the licensed LLCs to the relevant provisions of the California Business and Professions Code as well as to the rules set forth by the Contractors State License Board are part of the bond’s conditions, too.
This requirement is in pursuance of Section 7071.6.5 of the California Business and Professions Code.
How much does a California LLC Employee/Worker Bond cost?
The bond premium will vary per LLC license applicant. License applicants who have excellent credit scores will be eligible to pay as little as 1% of the bond amount.
The bond amount is $100,000.
How can I get a California LLC Employee/Worker Bond?
We have made the surety bond procedure easier for you! Just follow these simple steps:
STEP 1: You must first apply for this type of surety bond. If you are ready to do that now, you may APPLY HERE!
Once we have received your application, we will immediately start the bonding process. We will inform you about the important documents that you need to submit for the next step, which is the underwriting process.
STEP 2: An underwriter will take a thorough look at the following:
- Your financial strength
- Your job performance history
- Your credit score
STEP 3: After the underwriting process has been fulfilled, you will be asked to sign an indemnity agreement. Once that’s done, we will issue your surety bond and send it to you immediately!
How does a California LLC Employee/Worker Bond work?
A California LLC Employee/Worker Bond is a financial guaranteed provided by the Principal and the Surety to the Obligee. The Principal is the LLC license applicant and the surety or the surety bond company who will issue the bond. The Obligee is the party who is requiring the assurance. The Obligee will also be the beneficiary of this bond. In this case, the Obligee will be the State of California. No action will be taken against this bond as long as the Principal pays the salaries, wages, fringe benefits, and other contributions of the employees on time and in full. If the opposite happens, the Obligee can recover the amount necessary by filing a claim against this bond.
Need to get this surety bond ASAP? APPLY NOW!