Union Wage & Welfare Bond Guide
Employers hiring union workers often need to file a surety bond. Learn how to navigate the union bonding process with this guide.
Bond Overview
- Purpose: To guarantee employers will fulfill a union's financial obligations
- Who Needs It: Employers of union workers in various trades and states
- Bond Amounts: Varies by bond type, usually $10,000–$100,000
- Premium Rates: Typically 1–3% of the bond amount, credit-based
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
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.
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.
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.
