Surety bonds touch countless industries — including the produce aisle at your local grocery.
Companies and workers in the fruit and vegetable industry are governed by the Perishable Agricultural Commodities Act, or PACA, a body of laws and regulations enacted in 1930 to ensure fair trade and consumer safety. Under this act, when a company or one of its principals is involved in a bankruptcy, the company must post a surety bond in order to continue operating legally.
Companies also need to post a bond if they hire a person who is under PACA employee restrictions. For example, a Delaware food company had to post a $40,000 surety bond with the U.S. Department of Agriculture in early December to hire Raymond J. Maragni Jr., who was an officer with a New Jersey company that failed to pay a reparation award issued against it under the PACA.
The USDA holds the bond for four years.
The agency also publishes a list of companies that have had to post an employment bond or a license bond in order to remain compliant with PACA. Consumers can examine those lists here.
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