Assistance is available for businesses that are willing to help provide a fresh start for individuals who are trying to overcome traditional barriers to employment. The Federal Bonding Program, sponsored by the U.S. Department of Labor, offers fidelity bonding insurance protection to employers who hire individuals who are considered to be at-risk or hard to place because of:

  • History of arrest, conviction or incarceration
  • History of substance abuse
  • Poor credit history, i.e. bankruptcy
  • Lack of employment history (e.g. youth, displaced homemaker)
  • Dishonorable discharge from the military
  • Special situations requiring a fidelity bond

The Federal Bonding program is an incentive to employers to hire eligible individuals and AAWDC can help your business navigate the process. Eligible individuals will be issued a Letter of Eligibility that they can use to market themselves to employers during the interview process. Once an employer agrees to hire an individual and gives a firm first day of work, the employer must contact the State Bonding Coordinator. The bond is issued directly to the employer and is good for six months. The fidelity bond insures the business against stealing by theft, larceny, embezzlement or forgery.

Frequently Asked Questions

What is a fidelity bond?

It is a business insurance policy that protects the employer in case of any loss of money, products or equipment due to employee dishonesty. The Fidelity Bonds issued under the Federal Bonding Program are insurance policies of the Travelers Property Casualty Insurance Company. The McLaughlin Company in Washington, DC is the agent managing the program nationally.

How does the bond help someone get a job?

The bond is provided to the employer free-of-charge for six months, and is offered to encourage the company to hire a job applicant who is an ex-offender or has some other “risk” factor in his/her personal background. The employer is able to hire the individual with limited risk of worker dishonesty on the job.  The bond has a 99% success rate. 

What does the bond insurance cover?

It insures the employer for any type of stealing by theft, forgery, larceny, or embezzlement. The bond is for $5,000. It does not cover liability due to poor workmanship, job injuries or work accidents. It is not a bail bond or court bond for the legal system. It is not a contract bond, performance bond, or license bond sometimes needed to be self-employed. Self-employed persons cannot be covered.

What are the restrictions?

The worker must meet the State’s legal age for working; there are no other age limits. The job must be for at least 30 hours work per week. Workers must be paid wages with Federal taxes automatically deducted from their pay.

Can the bond be issued at any time?

For the bond to be issued, the employer must offer a job to the applicant and set a date for the individual to start work. The job start date will be the effective date of the bond insurance. The insurance policy will terminate six months later. Employment must be verified by the State Bonding Coordinator for the bond to be issued.

Contacts

Andre James                    andre.james@maryland.gov

Rebecca Benner               rbenner@aawdc.org