Employment Agency Bond
- Required as part of the licensing process of employment agencies
- Protects the interest of job seekers
- Required in several states, among which Arizona, California, Massachusetts, Hawaii, Maryland, South Carolina and Nevada
- Also known as an Employer Service Bond, Employee Leasing Bond or a Staffing Agency Bond
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Employment Agency Bond Overview
Several states require that employment agencies get this surety bond in order to get licensed. The bond is required to provide protection for job seekers, and make sure that employment agencies follow all applicable rules of their industry. In some states the requirement extends to career counselors, booking agencies, job listing firms, computer matching service companies and others.
If the bonded agency violates the terms of the bond agreement, they may face a claim for a sum up to the total amount of the surety bond they posted. It’s important to know your state’s laws thoroughly, because requirements can vary. Some of the often-prohibited actions under the bond’s language are:
- providing deceptive information in advertising
- sending a job seeker to an employer whom they know is breaking the law
- Using force or coercion to get people to go to the agency
If you want to find out how much your bond will cost you, you can start by getting a free no-obligations bond quote. To learn more about the factors determining your cost– as well as other important information about employment agency bonds– keep reading below.
Employment Agency Bond Cost
Each state determines the total value of the bond required from staffing agencies. The amounts vary between $1,000 and $7,500. That means a claimant can get compensation anywhere between $1,000 and $7,500 depending on the state.
To obtain their bond, employment agencies pay a fraction of the total amount, once a year or once every two years, again depending on their state’s requirements. That fraction, also known as a bond premium, depends mostly on the applicant’s credit score. It generally ranges between 0.75% and 2.5% for applicants with strong credit, or between 2.5% and 10% for bad credit applicants.
Consult the table below to find your expected premium and learn about your state’s required bond amount.
|State and Bond Name||Surety Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Nevada and Utah Employment Agency Bond||$1,000||$100-$150||$100-$150||$100-$150||$100-$250|
|Massachusetts, South Carolina and California Employment Agency Bond||$3,000||$100-$150||$100-$150||$150-$200||$150-$300|
|Arizona, North Dakota, Illinois, Hawaii, Washington, D.C., and New York Employment Agency Bond||$5,000||$100-$150||$100-$150||$150-$250||$250-$500|
|Maryland Employment Agency Bond||$7,000||$100-$150||$100-$175||$175-$350||$3,500-$7,000|
|Connecticut Employment Agency Bond||$7,500||$100-$150||$100-$187.5||$187.5-$375||$375-$750|
|California Employment Counseling Service Bond||$10,000||$100-$150||$150-$300||$250-$500||$500-$1,000|
Keep in mind that the above premiums are just estimates based on credit score. You’ll receive an exact quote when you submit our online application. Can’t find your bond? No worries, we offer bonds in all 50 states!
Getting This Bond With Bad Credit
You can still apply for your employment agency bond with our Bad Credit Program. Premiums tend to be higher, but many of these bonds are considered low-risk so they may not even require a credit check.
To learn more about the factors contributing to your premiums, check out our surety bond cost guide.
Apply for Your Bond Today
Applying for your employment agency bond is easy. All you need to do is submit our one-page online application by clicking the button below, and you’ll receive a free bond quote via email. Our agents are here for you if you need any more assistance; just call us at (866)450-3412.
You will then be required to provide ownеrship information for your company if you haven’t already done so when submitting the application. After everything is completed, we’ll send you a digital copy in an email, as well as a hard copy (the original bond form) via mail.
Staying out of claims against your bond
It’s advisable to stay out of bond claims, because they can cost your company a lot in terms of financial and other resources. Each state has specific provisions that you need to adhere to in order to stay compliant with the law. Here are the main provision in different states:
Arizona employment agencies are required to comply with Arizona Revised Statutes 23-521 and Arizona Administrative Rules R20-5-301. The bond protects customers against some common fraudulent actions.
In order to understand their obligations better, employment agencies and companies who offer employment counseling services need to read Title 2.91, Part 4 of Division 3 of the Civil Code of the State of California.
Chapter 373 of the Hawaii Revised Statutes contains the relevant provision for employment agencies. Keep in mind that Hawaii requires two licenses, one for the company and one for its principal agent.
Employment agencies in the state who have been required to post this bond need to comply with Section 9-301(a) & (b), Business Regulation Article, Annotated Code of Maryland. Operating without a valid bond may lead to a $500-$1,000 penalty.
Compliance under the bond language is outlined in NRS sections 611.020 through 611.320.
Employment agencies are required to comply with the provisions in the Illinois Private Employment Agency Act. Under the law, you are required to keep records of all employee orders. Prohibited activities include charging for services which have not been offered, or sending a prospective candidate to an employee who is known to the agency for offering unsafe or unethical working conditions.
The Massachusetts General Laws outline actions which employment agencies in the state cannot engage in. Some examples include sending job seekers to employers who break the law or whose employees are currently on a strike.
South Carolina employment agency bonds protect employment agency customers from financial loss suffered due to non-compliance with the Act 107 of 1981 of the State of South Carolina.