What Is an Employee Leasing Company Bond?
In a number of states across the U.S., employee leasing companies, also known as professional employer organizations, have to provide a surety bond prior to starting their legal operations.
This is a type of license bond. Its goal is to guarantee that employee leasing companies will adhere to the legal framework in their respective state. If you fail to follow the law in your activities, you may end up with a claim against your bond. This is how a harmed party can seek a reimbursement for suffered damages.
The surety bond that you have to provide is a three-party contractual agreement. Your employee leasing business is the principal that has to post the bond. The state authority that oversees your trade is the obligee. The surety is the one that provides the bonding and the backing for your company.
Questions about Employee Leasing Company Bond
Which states require employee leasing companies to post a surety bond?
In Georgia, employee leasing companies have to provide a $10,000 surety bond to the state Department of Labor. After the first year, the bond amount is adjusted according to the company’s taxable payroll.
Employee leasing companies in New Mexico need to provide a $100,000 surety bond to the state Regulation and Licensing Department.
You have to provide a $50,000 surety bond to the Rhode Island Tax Administration if you want to operate as an employee leasing company in the state. Here is the surety bond form that you have to employ.
The Nevada Department of Business and Industry requires employee leasing companies to post a $100,000 bond in the official bond form.
What are the bonding costs?
In order to get bonded, you don’t have to provide the whole bond amount required from you. Instead, you need to cover a small percentage of it, which is referred to as the bond premium. It is based on the strength of your finances.
What are the most important criteria that influence your surety bond cost? Among them are your personal credit score, business financials, and assets and liquidity. Your surety may also consider your professional experience to judge the stability of your profile. If your overall application is solid, you can expect a bond rate in the range of 1% to 5%.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|New Mexico and Nevada||$100,000||$750-$1,500||$1,000-$2,500||$2,500-$5,000||$5,000-$10,000|
Can I get this surety bond if I struggle with bad credit?
With Lance Surety Bonds it is possible to get the bond you need, even if you struggle with a low credit score, tax liens, bankruptcies, or civil judgements. Our Bad Credit Surety Bonds program was designed for applicants with problematic finances.
The rates that you can expect are between 5% and 10%, since the bonding risk is higher. We can still guarantee you a top bonding price, whatever your credit score is. We work with numerous A-rated, T-listed surety companies, and this allows us to shop around for you.
How do I apply for my employee leasing company bond?
Would you like to learn more details about the bonding process? Don’t miss out our in-depth How to Get Bonded page that will fill in all gaps.
We are here to help. If you need assistance with your bond application, or simply have more questions, just call us at (877) 514-5146.