A Wage and Welfare Surety Bond is a bond required by a union to guarantee payment of union dues, wages and benefits by companies that contract with the union for services by its members. Sometimes these bonds are also called fringe benefit bonds, in which case the bond only guarantees the payment of union benefits.
You will often need one prior to hiring members of a union. The bond amount is frequently set based on the number of employees. Most unions have their own language, dues and/or benefits. This means each union usually has their own bond form they want used and you will have to get a separate bond for each union. You will need to keep the bond in place as long as you are employing that union’s workers or if the union possibly grants you an exemption.
Surety carriers consider these to be strict financial guarantee bonds, which means they deem them more risky and underwrite them more closely. In addition to soft pulling credit on the owner(s), the surety may also require you provide business financial statements and/or other underwriting documentation. Not all surety carriers will write wage & welfare bonds and the ones that do vary with what they are willing to approve. We have the underwriting sophistication and relationships with national A-rated markets required to secure your bonds at a near 100% approval rate.
Wage and Welfare Bonds may also be referred as:
- Wage and Fringe Benefits Bonds
- Wage Fund Bonds
- Welfare Fund Bonds
- Union Bonds