California Union Wage and Welfare Bond Guide
In California, you may need to file a surety bond if you employ unionized workers. This creates a financial guarantee that you will pay owed wages and benefits, contribute to welfare funds, and more.
Quick Bond Facts
- Purpose: To protect union-member interests in collective bargaining agreements between unions and employers
- Who Needs It: Employers of union members in various industries, especially construction and specialized trades such as plumbers, ironworkers and electricians
- Premium Rates: Vary based on financial risk, typically 1–10% of the coverage amount
Use this guide to learn all about how wage and welfare bonds work in California and apply for your free quote.
What Are California Union Wage and Welfare Bonds?
California wage and welfare bonds, also known as wage bonds and fringe benefit bonds, are required for employers when negotiating collective bargaining agreements (CBAs) with certain unions.
This type of surety bond guarantees a union-member employer will honor financial obligations and union contracts, including:
- Payment of union dues
- Contributions to funds
- Delivery of benefits packages
Each particular bond form has unique terms for the union requiring it.
How Much Do Union Wage Bonds Cost in California?
Employers with a strong financial standing often pay a premium price of 1-5% of the total California wage and welfare bond amount. However, these bonds require underwriting review and may cost anywhere from 0.5% to 10% depending on various risk factors.
Request a free quote today to get your exact rate.
SuretyBonds.com offers the lowest rates available from our nationwide network of surety providers with no added fees.
How Does a California Union Wage and Welfare Bond Work?
A California and welfare bond binds three parties in a legal contract:
- Principal: The company employing union members
- Obligee: The union requiring the bond to protect employee interests
- Surety: The provider issuing the bond and backing the principal’s obligation
If a principal fails to uphold its obligations, the bond can be used to pay claims for owed dues, wages, and fringe benefits up to the full coverage amount.
How Do I Get a Wage Bond in California?
You may need a surety bond before you can hire employees who are members of certain unions. If that’s the case for you, SuretyBonds.com provides the fastest and easiest way to get a wage and welfare bond:
- Application: Submit an online quote request.
- Quote: Receive your free quote within one business day.
- Signatures: Sign your indemnity agreement and bond form.
- Delivery: Receive your official bond form via email or FedEx.
File the bond documentation with the obligee as instructed. If the union requires the original bond form with wet signatures, we offer an overnight shipping option. Otherwise, we’ll email your official bond as soon as it’s processed.
Can I Get Bonded With Bad Credit?
Yes, you can often still get a wage bond even with low credit. We’ll work with our network of surety markets across the nation to match you with a surety provider at the lowest available rate.
Learn more about how credit score impacts bond premium rates here.
How to Renew Your Union Wage and Welfare Bond
Union wage and welfare bonds in California typically last for a one-year term. Each bond has unique terms, but most can be renewed without the need to issue a new bond form.
When you choose SuretyBonds.com, we’ll contact you during the renewal period with an invoice and instructions on how to keep your bond policy active for another term.
