The Federal Bonding Program
What is it and how does it work?
What is the federal bonding program?
It is a unique tool to help a job applicant get and keep a job. The program issues fidelity bonds, and is sponsored by the U.S. Department of Labor.
What is a fidelity bond?
It is a business insurance policy that protects the employer in case of any loss of money or property due to employee dishonesty. The fidelity bonds issued under the Federal Bonding Program are insurance policies of the Travelers Property Casualty insurance company.
What exactly does the bond cover?
It insures the employer for any type of theft, forgery, larceny or embezzlement. It does not cover liability due to poor workmanship, job injuries, or work accidents.
Are all the PREF residents eligible to be bonded upon release?
Yes. Bonds may be issued for ex-residents to any employer who makes federal tax deductions from employee wages, for employment positions of 30 hours per week or more. (Persons who become self employed cannot be bonded through this program.)
Since many employers buy fidelity bond insurance to protect against employee dishonesty, why is this program needed?
Fidelity bonds that employers purchase commercially do not cover ex-offenders and other job applicants with questionable backgrounds. Only the federal bonding program will issue bonds to employers to cover anyone who is NOT bondable commercially. This allows employers to tap into a labor pool of people seeking a second chance to become dependable workers, without taking a financial risk in doing so.
How long does the bond last and how much coverage does it provide?
The bond will provide $5,000 of coverage for the first six months of employment. After that, the employer may purchase continued coverage if the worker has exhibited job honesty under the program's bond and the employer wants to continue coverage.
Is there a charge to the employer or employee for the bond?
No, there is no charge.
Is there any paperwork for the employer to sign and maintain?
No. The employer signs NO papers, and keeps NO special records since the bond is self-terminating at the end of six months. The bond is mailed directly to the employer by The McLaughlin Company in Washington, DC as the agent for Travelers Insurance.
Who does the employer contact if interested in bonding when making an employment offer to a former PREF resident?
Employers should contact the Re-Entry Job Developer: Shelle Westrick, 317-839-7751, ext. 4309. An employment offer and start date must be established before a bond is issued.
Has this program proven to be successful?
Yes. About 41,000 applicants have obtained jobs due to being bonded, and 99% have proven to be honest employees.
