What is a Pennsylvania Unemployment Compensation Bond?
Employers in Pennsylvania are expected to pay contributions based on payrolls to provide funds for the payment of compensation to certain unemployed persons. To do this, employers are required to post a surety bond being able to compensate employees for bills and other types of work-related compensation.
The Unemployment Compensation Bond ensures payment of all monthly or quarterly bills for unemployment compensation benefits paid to its employees. These will include wages and fringe benefits which were paid following the termination date of the election of reimbursement.
The bond will be for a 48-month term and ends every December 31. This prerequisite is in line with the Pennsylvania Unemployment Compensation Law, Act of 1936.
What is the bond amount?
The bond amount is based upon wages paid before the termination date. The amount will be determined by the Pennsylvania Office of Unemployment Compensation.
The cost of the bond, which is a percentage between 1% and 5%, serves as your bond premium. It is based on a surety underwriter’s evaluation of your credit score.
How do I obtain an Unemployment Compensation Bond?
Just simply follow these steps:
SEND US A BOND APPLICATION – We begin the bonding process with an application. You may send your application for this bond HERE!
UNDERWRITING – Once we have received your application, an underwriter will ask you to submit important requirements to gauge your bonding capacity. However, your credit score is mostly subjected to an underwriter’s review.
You may also need to furnish a copy of the BOND FORM, which you can obtain from the Pennsylvania Department of Labor and Industry, Office of Unemployment Compensation.
To avoid any delay, make sure that your requirements are complete before submitting them.
ISSUANCE – As soon as the underwriter has completed the necessary in-depth check, we will immediately issue the surety bond and send it to you!
What are the bond conditions?
- The bond must be issued by a Surety authorized to do business in the Commonwealth of Pennsylvania.
- The Principal is covered by the terms of the Pennsylvania Unemployment Compensation Law and must make payments in place of contributions under the provisions of Section 1106(d) of Article XI of the Pennsylvania Unemployment Compensation Law.
- The Principal must pay all monthly or quarterly bills for unemployment compensation benefits paid to its employees, including benefits which were paid after the termination date of the election to reimburse.
- If the Principal does not pay within 30 days, the Surety will be liable up to the full amount of the bond.
- The Surety may cancel the bond by providing a 60-day written notice to the Pennsylvania Office of Unemployment Compensation before cancellation.
Note: The Pennsylvania Department of Labor and Industry requires employers to electronically file Unemployment Compensation (UC) wage and tax information through UCMS (Unemployment Compensation Management System). Paper UC-2 and UC-2A forms are no longer available.