California Farm Labor Contractor Bond

The Department of Industrial Relations requires all contracting companies to obtain a surety bond if they want to get a California farm labor contractor license. You have to present the bond in the officially required form. The initial bond amount is $25,000. When you renew the license, the bond amount depends on your annual payroll number.

Your California farm labor contractor bond ensures you will comply with the state’s Labor Code Section 1684(a)(3), as well as with all provisions of Chapter 3, Part 6, Division 2 of the California Labor Code.

We recently helped an agricultural enterprise in Central California as they tackled the process of securing their California Farm Labor Contractor Bond. Despite being well-versed in farming, they were new to the world of surety bonds and were concerned about potential delays in obtaining their license. Walking them through the bond application, we emphasized the importance of maintaining thorough financial records and outlined how the bond would impact their day-to-day operations. By expediting the bonding process, we ensured they met all state regulations promptly, enabling them to continue their farming activities without any disruptions to their schedule.

The amount of your California farm labor contractor bond varies. Initially, it is $25,000 for obtaining your first license. After that, it is based on the annual payroll. If it is below $500,000, you need a $25,000 bond. For a payroll between $500,000 and $2 million, it is $50,000. If your payroll is above $2 million, the bond amount is $75,000.

The surety bond cost that you have to cover is calculated on the basis of the bond amount required from you. It is referred to as the bond premium. Usually it is between 1% to 3% of the bond amount in case you can demonstrate strong finances. For instance, for a $25,000 surety bond, it will only cost you between $250 and $750.

In addition to the mandatory bond amount, several other factors influence your bond premium. This is why it's crucial to rely on a trusted surety agency for your bond application. We’ll conduct a thorough assessment of your overall financial position, including your personal credit score, business finances, assets, and liquidity. If you're deemed a low-risk applicant, you can expect reduced bond premiums.

We have designed our Bad Credit Surety Bonds program for applicants struggling with financial issues. If you have a low credit score, tax liens, bankruptcies, or civil judgements, this option might be right for you.

The typical rates for bad credit applicants are in between 5%-10%. Our close partnerships with a number of A-rated, T-listed surety companies, however, allow us to offer you a top bonding rate whatever your credit score is.

If you have more questions, we are here to help. Just call us at (877) 514-5146, and we will happily assist you.

The purpose of your California farm labor contractor bond is to protect your employees. It can provide compensation to affected parties if you fail to make due payments. This means that you can end up with a bond claim if you don’t follow the California Labor Code, and other applicable laws.

The highest amount that can be sought for compensation is the full value of your bond. At first, your surety may cover the costs in order to ensure a quick reimbursement for the affected parties. You are, however, liable to compensate for it fully. Thus, it’s best to stay away from situations that can give rise to claims, as they can lead to financial and reputational harm.