In September, Governor Gavin Newsom signed AB 2227, which updates licensing requirements for California farm labor contractors. Starting January 1, 2027, required surety bond amounts will double. Here’s what you need to know.
Why Was This Change Introduced?
Through this new law, California aims to provide stronger protections against wage theft. Existing surety bond amounts were not always enough to cover workers’ unpaid wages when several workers filed claims at once.
AB 2227 amends the California Labor Code to raise bond requirements. It also extends certain civil penalties to licensed farm labor contractors, not just unlicensed ones.
Who Do These Changes Affect?
If you recruit, hire or supply farmworkers for agricultural employers, you need to be licensed as a farm labor contractor (FLC) and carry the required surety bond.
What Are the New Bond Requirements?
If a contractor fails to pay workers money they are legally owed, this surety bond can be used to pay valid claims. Your exact bond amount depends on your annual payroll for all employees.
| Annual Payroll | Old Bond Amount | New Bond Amount |
| ≤$500,000 | $25,000 | $50,000 |
| $500,000–$2 million | $50,000 | $100,000 |
| $2 million+ | $75,000 | $150,000 |
You need to increase your bond amount by the time of your 2027 renewal.
California Farm Labor Contractor Bond Amounts Double in 2027
How Do I Update My Current Bond Amount?
If you have an existing bond, contact your surety company to increase your bond amount. Current customers will receive renewal reminders starting 90 days before expiration. We’ll issue a bond rider to amend your form, which you’ll need to sign and file with the California Department of Industrial Relations (DIR).
Not licensed yet? New contractors can purchase a California farm labor contractor bond online, with rates starting at $500.
How Much Will My Bond Cost?
Since your bond amount will increase, your premium will also likely increase. Qualified applicants often pay just 1% of the bond amount. We’ll send you a new quote at renewal.
What Else Changed?
Before AB 2227, civil penalties applied only to people operating as FLCs without a license. Now licensed FLCs can face them too, including for violating other farm labor contractor requirements.
For an initial citation, the penalty is calculated as:
$100 × number of farmworkers + $100 × number of days the violation continues
The maximum fine for an initial citation is $10,000, but repeat violations can lead to higher penalties.
The law also requires bond information to be listed in the state’s public FLC licensing database. This makes it easier to see a contractor’s license status and financial security.
Next Steps
To avoid penalties and licensing delays, make sure to increase your bond amount by your 2027 renewal date.
For any questions, refer to the California DIR farm labor contractor page or call 1 (800) 308-4358 to speak with one of our surety experts.