Federal Bonding Program
Background
Jobseekers who have in the past committed a fraudulent or dishonest
act, or who have demonstrated other past behavior which casts doubt upon
their credibility or honesty, often experience a special barrier to
gaining employment due to their personal backgrounds. Such persons are
routinely classified as "at-risk" job applicants.
These jobseekers, whose past life experience raises an obstacle to
their future ability to secure employment, could benefit from the
Federal Bonding Program. Created in 1966 by the U.S. Department of
Labor, the Federal Bonding Program helps to alleviate employers concerns
that at-risk job applicants would be untrustworthy workers by allowing
them to purchase fidelity bonds to indemnify them for loss of money or
property sustained through the dishonest acts of their employees.
WHAT IS THE FEDERAL BONDING PROGRAM?
An innovative activity that serves as a tool to secure the job
placement of ex-offenders and other high-risk applicants. The program,
sponsored by the U.S. Department of Labor, issues Fidelity bonds.
WHAT IS A FIDELITY BOND?
It is a business insurance policy that protects the employer in case
of any loss of money or property due to employee dishonesty. It is like
a "guarantee" to the employer that the person hired will be an honest
worker.
The Fidelity Bonds issued under the Federal Bonding Program are
insurance policies of the Travelers Property Casualty insurance company.
The McLaughlin Company in Washington, DC is the agent for Travelers in
managing the program nationwide.
HOW DOES THE BOND HELP SOMEONE GET A JOB?
The bond is given to the employer free-of-charge, and serves as an
incentive to the company to hire a job applicant who is an ex-offender
or has some other "risk" factor in their personal background. The
employer is then able to get the workers' skills without taking any risk
of worker dishonesty on the job.
WHAT EXACTLY DOES THE BOND INSURANCE COVER?
It insures the employer for any type of stealing by theft, forgery,
larceny, or embezzlement. It does not cover liability due to poor
workmanship, job injuries, or work accidents. It is not a bail bond or
court bond for the legal system. It is not a contract bond, performance
bond, or license bond sometimes needed to be self-employed.
WHAT RESTRICTIONS EXIST IN PROGRAM'S BOND COVERAGE?
The worker must meet the State's legal age for working; there are no
age limits. The job usually is to be for at least 30 hours work per
week. Workers must be paid wages with Federal taxes automatically
deducted from pay; self-employed persons cannot be covered.
WHO DOES THE PROGRAM HELP?
Bond coverage is provided for any persons whose background usually
leads employers to question their honesty and deny them a job. The
program will cover any person who is a "risk" due to their being in one
or more of the following groups:
- ex-offender with a record of arrest, conviction or imprisonment;
anyone who has ever been on parole or probation, or has any police
record
- ex-addict who has been rehabilitated through treatment for alcohol
and drug abuse
- poor credit record or have declared bankruptcy
- persons lacking a work history who are families with low income
- dishonorably discharged from the military
WHO MUST REQUEST ISSUANCE OF THE FIDELITY BOND?
Issuance of the bond for job placement to occur can be requested by
either the employer or the job applicant. This request is to be made to
the local agency certified by the Federal Bonding Program.
CAN THE BOND BE ISSUED AT ANYTIME?
For the bond to be issued, the employer must make the applicant a job
offer and set a date for the individual to start work. The job start
date will be effective date of the bond insurance which will terminate
six months later. After the six months, continued coverage will be made
available for purchase if the worker has exhibited job honesty under the
program's bond.
IN WHAT TIME PERIOD IS THE BOND EFFECTIVE?
The initial Fidelity bond is issued for a six-month period.
HOW MUCH BOND INSURANCE COVERAGE WILL BE ISSUED?
A total of $5,000 bond coverage is usually issued, with no deductible
amount of liability for the employer. Larger bond amounts can possibly
be issued if the certified agency issuing the bonds has acquired a
special bond package and has determined that larger bond amounts are
appropriate.
HOW MANY PEOPLE HAVE BEEN HELPED BY THE PROGRAM?
About 40,000 applicants have obtained jobs due to being bonded, and
99% have proven to be honest employees.
WHERE CAN I GET MORE INFORMATION ON BONDING SERVICES?
To receive a Directory of USDOL/ETA Regional Bonding Coordinators or
for further information about the program, please call or write to:
Ron Rubbin, Program Director
Federal Bonding Program
1725 DeSales Street, NW, Suite 700
Washington, DC 20036
1-800-233-2258
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