Washington Bonding Program

The following “Washington Bonding Program” and “Question and Answer” sheet is provided and intended as general program information. For additional information about the Bonding Program, see the PowerPoint slide show.

Short History

Since 1966 the U.S. Department of Labor has provided direct Federal financing of fidelity bonds under the Federal Bonding Program. The Employment Security Department (ESD) was the primary delivery system for bonding services as a unique placement tool. Beginning January 1, 1998, due to reduced federal funding for special projects and the decentralization of employment and training authority, the Federal Bonding Program dependence on direct Federal funding was phased out and individual states were given the opportunity to establish and coordinate the delivery and issuance of fidelity bonds. The ESD continues to fund the program under the name of the Washington Bonding Program (WBP).

What is the Washington Bonding Program?

This program provides, at no cost to the employer or applicant, individual fidelity bonds to employers for applicants who are, or may be, denied coverage by commercial carriers because of their at-risk status. The fidelity bonds issued by the WBP function as an employer job-hire incentive.

These bonds come from the Travelers Insurance Company and provide employers protection against employee dishonesty. The bond insurance covers any loss resulting from any form of stealing by employees, including theft, forgery, larceny and embezzlement. It does not cover liability due to poor workmanship, job injuries or work accidents. It is not a bail bond or court bond for the legal system, nor is it a contract bond, performance bond or license bond necessary to be self employed.

Who is eligible for bonding?

Bond coverage is provided for any person who has a barrier that could lead employers to question their reliability or honesty and deny them a job. This could be persons with a criminal background, WorkFirst participants, dishonorably discharged veterans, recovering substance abusers (alcohol & drugs), individuals with a poor credit history or economically disadvantaged persons who lack a work history. In general, anybody who needs bonding and can’t get bonded through a commercial bonding company would qualify for the fidelity bond as long as they are not self employed.

Where to get further information?

Please feel free to contact ESD at 1-800-339-3981.

WASHINGTON BONDING PROGRAM
(Frequently Asked Questions)

Q. What is the Washington Bonding Program?
A. The Washington Bonding Program provides individual fidelity bonds, at no cost for workers who are (or may be) denied coverage by commercial carriers.

Q. What is a fidelity bond?
A. It is insurance used to pay employers for loss of money or property due to dishonest acts of their employees. The fidelity bonds issued under the Washington Bonding Program are insurance policies of the Travelers Property Casualty insurance company.

Q. How do employers get a fidelity bond?
A. They buy it from an insurance company that issues a blanket bond in the form of a single policy that covers all officers and employees of the company.

Q. What are the program’s limits?
A. The worker must not be eligible for a bond from a normal insurance carrier. The worker must meet the state’s legal age for working -- there are no upper age limits. Workers must be paid wages with Federal taxes automatically deducted from pay. Self–employed persons cannot be covered. The job must be available for at least 6-months. The employee applicant must not have a default on a prior Washington issued bond.

Q. Can the program’s fidelity bond coverage exist forever?
A. No, the purpose of the program’s bond is to help at-risk applicants obtain employment. The bond insurance is free-of-charge to the employer for six-months. If the worker demonstrates job honesty during the six months of Washington Bond Program coverage, that worker may become bondable for life under the employer’s commercial bonding.

Q. What is maximum and minimum coverage under the Washington Bonding Program?
A. The minimum coverage is $5000.00 up to a maximum of $25,000.00 issued in $5000 increments. In most cases, the program issues $5,000.00 in coverage with no deductible for the employer. In special cases, the program may issue bonds at higher amounts. Any bonds issued over $15,000.00 require authorization from the State Bonding Coordinator.

Q. Can the Washington Bonding program issue any other type of bond, such as bail bond, performance bond, or contract bond?
A. No. The Washington Bonding Program bond: (a) requires an employer-employee relationship: and (b) covers only dishonest acts. It does not cover employer liabilities, for example,, accidents, poor workmanship, or injuries.

Q. Can the program provide bonding for an employee in a job where bonding was not previously an employment requirement?
A. Yes, if the employer can prove that the job is one that poses the risk of significant loss or damage.

Q. Can the program issue the Bond at any time?
A. No, the employer must offer the applicant a job and set a date for the worker to start employment. The employment start date is the effective date of the bond insurance, which will terminate six months later.

Q. Who can request the fidelity bond?
A. The employer of record, the job applicant or the job placement agency can request a bond. The request can be made by phone, e-mail or completing the Bond Certification Form.

Q. What do you have to do to get Bonding Services?
A. The requestor of the Bond should contact the nearest WorkSource Center and talk with a WorkSource Specialist. The requestor can also contact the State Bonding Coordinator at 800-339-3981 or 360-407-1373.

Q. What paperwork must the employer sign? What other actions must the employer take in order to get the bond?
A. None. Once the date is set for the applicant to start work, the program issues the bond. The employer signs no papers, and keeps no special records since the bond will end after six months.