Overview of California Farm Labor Contractor Bond Requirements
The Department of Industrial Relations requires all farm labor contractors operating in California to get bonded. The California Farm Labor Contractor Bond is part of the requirements for getting a license. Just as the rest of the surety bonds, that bond serves as a contractual agreement between three parties: the principal, which is the farm labor contractor, the surety and the obligee, which in that case is the state of California.
The California Farm Labor Contractor Bond essentially protects the laborers of the farm in question. It ensures they get their payment on time, that they’re safe and the labor performed is in compliance with Chapter 3, Part 6, Division 2 of the Labor Code of the State of California.
If you break the agreement coming with the surety bond, the affected laborer is free to file a claim against you. Keep in mind the penal sum can get as high as the full amount of the bond. If the surety is to pay out on the bond claim, you are responsible for reimbursing them with the full amount eventually.
If that is the first time you encounter the bonding process and you need someone to walk you through it in person - call our experts at 866.450.3412!
Cost of California Farm Labor Contractor Bond
The California Farm Labor Contractor Bond amount for new applicants is set at $25,000. However, it varies for renewal contractors, based on the previous year’s payroll. The different bond amounts are as follows:
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$25,000 bond for up to $500,000 payroll
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$50,000 bond for $500,000 - $2 million payroll
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$75,000 bond for over $2 million payroll
These amounts, however, are not the annual premium you have to pay. The actual bond cost is a percentage or a fraction of the total amount. This percentage forms based on various factors such as assets and liquidity, bankruptcies, financial statements.
The most important factor taken into account by the surety when they form your rate is your credit score. For example, applicants with score as high as 700 FICO or above will usually receive a low bonding rate between 0.75% and 1.5% of the total amount of the bond.
If you want to get a specific estimate of your bond cost based on your credit score, refer to the table below.
| Surety bond amount | Above 700 | Between 650-699 | Between 600-649 | Below 599 | |
|---|---|---|---|---|---|
| California Farm Labor Contractor Bond | $20,000 | $150-$300 | $200-$500 | $500-$1,000 | $1000-$1,500 |
| $25,000 | $187.5-$375 | $250-$625 | $625-$1,250 | $1250-$1,875 | |
| $50,000 | $375-$750 | $500-$1,250 | $1,250-$2,500 | $2,500-$3,750 | |
| $75,000 | $562.5-$1,125 | $750-$1,875 | $1,875-$3,750 | $3,750-$5,625 |
Getting Bonded with Bad Credit
Even if you don’t come from a good financial background you have no place for worries. Applicants with low credit score or even no credit history still have a chance of getting a good bonding rate with our Bad Credit Bond Program!
Bonding rates for applicants with lower credit score are higher, typically varying between 5% and 15%. The good news is that the experts at Bryant Surety Bonds will use our long list of surety partners to apply to as many companies as needed. All done to get you the best bonding rate possible for your financial situation.
In Case of a Surety Bond Claim
As mentioned above, by posting a surety bond, farm labor contractors in California agree to comply with Chapter 3, Part 6, Division 2 of the Labor Code of the State of California. The compliance with the labor code includes on-time payment of wage to the laborers and their safety.
If the farm labor contractor breaks the agreement and conducts an unlawful practice as defined by the legalities of the surety bond, the affected party is free to file a claim against the contractor. As in the end it will be up to the contractor to reimburse the surety for all the losses, up to the total amount of the bond, it’s best to avoid claims at any cost.
Apply for Your Bond Here!
If you got familiar with the California Farm Labor Contractor Bond and you’re ready to get one - look no further. Begin the process by completing our application form. We will get back to you with a free bond quote, along with any other steps you need to make to finish your application.
When you complete your application and send it over, it will take up to two working days for the surety to issue your bond. Once it’s ready, we will mail it back to you!
Do you still need help figuring it all out? Our experts are here to help! Call 866.450.3412 for any question regarding the California Farm Labor Contractor Bond.
