Labor Union Wage & Welfare Surety Bonds are a financial guarantee product that guarantee payment of union dues and benefits for the specific local. Each union has their own specific bond form and a separate bond is required for each of them.
Financial guarantee bonds are not easily written with many of today’s surety companies. But, wage and welfare bonds are one of the few financial guarantee bonds that some sureties will consider. South Coast Surety has the underwriting authority to place the bond regardless of your company credit or financial strength. We have the ability to quickly approve applications at very reasonable rates.
What are wage and welfare bonds?
Wage and welfare bonds, also referred to as union wage bonds, are a type of surety or financial guarantee bond that a union takes out to ensure that union dues get paid in the event that a member does not pay dues. Typically, wage and welfare bonds do not have a deductible, meaning that unions are completely covered by insurance companies for all applicable losses. Labor unions take out wage and welfare bonds at the local level, guaranteeing that the local union, not the national organization, receives dues.
How are Union Wage and Welfare Bonds Used?
A union member signs a wage and welfare bond upon the start of employment in a union job or upon joining a union. This bond establishes a contractual debt on the behalf of the employee, also known as dues, which the employee must pay to retain his union position. When an employee does not pay dues, the union may make a claim on the bond to recoup lost funds. Labor union bonds are typically funded through union laborer wages, union dues, excess funds for benefits and other collateral funds.