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Wage and Welfare Bonds

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Wage and Welfare Bond Guide

SuretyBonds.com is the nation’s top surety provider. We offer the best service, fastest delivery and most affordable wage and welfare prices in the industry.

Learn the definition of a wage and welfare bond, how they work and where to get one in this guide.

What Is a Wage and Welfare Bond?

A wage and welfare bond is a type of commercial bond required by unions when negotiating collective agreements with other companies. This surety bond guarantees an employee will honor financial obligations, including: 

  • Payment of union dues
  • Contributions to funds
  • Promised benefit packages 

If a union-member company fails to uphold its obligations, the bond amount is used to pay claims for salaries, wages, fringe benefits and compensation for services rendered by union employees. Each particular bond is unique to the union requiring it.

How Do Union Wage and Welfare Bonds Work?

Wage and welfare bonds act as legally binding agreements to guarantee union obligations are met by employers. There are three parties involved in a union bond contract:

  • Principal: The business employing union members
  • Obligee: The union requiring the bond to protect employee interests
  • Surety: The company issuing the bond and financially backing the principal

Wage and welfare bonds may be referred to by different names, including:

  • Union Bonds
  • Wage and Fringe Benefits Bonds
  • Wage Fund Bonds
  • Welfare Fund Bonds

Who Needs a Union Bond?

Any company hiring members of a union must obtain a wage and welfare surety bond. The bond promises union members will be compensated based on the collective bargaining agreement between the union and employer.

How Much Does a Wage and Welfare Bond Cost?

Because wage fund bonds are a type of financial guarantee, they are inherently risky. Highly qualified wage fund bond applicants often pay a premium price of 1-3% of the total bond amount

We thoroughly review every application and find the best rate in our nationwide network. To determine your exact wage and welfare surety bond price, request a free quote today.

Call 1 (800) 308-4358 to talk with a Surety Expert