Home / Farm Labor Contractor Bond

Farm Labor Contractor Bond

Farm labor is hard work, often conducted under grueling conditions, and absolutely vital to our nation. This essential work is usually done by migrant workers who have few protections in our society. To ensure farm laborers are adequately trained and treated fairly, many states require farm labor contractors to take out a surety bond before they can be licensed. This license bond is known as a farm labor contractor bond.

What is a Farm Labor Contractor Bond?

Farm Labor Contractor bonds are used to provide a form of protection for employees of a farm labor contractor. The bond guarantees that the contractor will pay acceptable wages to the laborers as well as operate in a way that adheres to labor standards. These labor standards can include regulations involving labor recruitment, worker termination, pay rates, and guaranteed hours, among other considerations.

Farm Labor bonds can be required at the federal level by the U.S. Department of Labor Wage and Hour Division and at the state level as well. State-level bond amounts vary from state to state. Usually, there is a minimum bond amount, with higher bond amounts required based on the number of employees. The U.S. Department of Labor will inform you of your required bond amount which is a new calculation based on daily rate plus the number of employees. These changes are effective January 2024:

• $9,178.38 for a labor certification for which a H–2ALC will employ fewer than 25 employees
• $18,356.76 for a labor certification for which a H–2ALC will employ 25 to 49 employees
• $36,713.51 for a labor certification for which a H–2ALC will employ 50 to 74 employees
• $91,783.78 for a labor certification for which a H-2ALC will employ 75 to 99 employees
• $137,675.67 for a labor certification for which a H-2ALC will employ 100 to 149 employees
• Each set of additional 50 workers (over 100), will require an increased bond amount.

How Does a Farm Labor Contractor Bond Work?

Like any surety bond type, a farm labor contractor bond is a legal contract between three essential parties:

• The Bond Principal: This is the company or individual that acquires the bond and is constrained by it.
• The Bond Obligee: This is the government agency, company, or individual that requires the principal be bonded.
• The Bond Surety: This is the insurance company that underwrites the bond.

If a farm laborer has reason to believe their employer violated contractual obligations, that laborer may file a claim against the bond seeking financial compensation for unpaid wages or any other kind of damages. The surety company investigates every claim in detail. If the surety finds the claim is valid, they pay the damages in full up to the bond's total value. The surety dismisses any claims that cannot be proven. The principal is responsible for any claims and must repay the surety in full, including fees and penalties. This is by design. Farm labor bonds exist so that farm operators cannot escape financial responsibility for illegal or non-contractual behaviors.

Who Needs a Farm Labor Bond?

The federal government and many state governments require farm labor bonds for contractors who provide farm laborers. If you're a farm labor contractor, you are likely required to obtain a bond. Since farmers desperately need qualified workers, don't delay getting bonded. The surety experts at Viking Bond Service will guide you through the process to help you learn what bonding requirements you must meet.

How Much Does a Farm Labor Contractor Bond Cost?

Like most surety bond costs, a farm labor contractor bond costs are based on two things — the bond value and the principal's credit. The federal and various state governments set the bond values. The premium is a tiny fraction of that value, typically 2%-5%. So, a $20,000 bond will run $400 to $1,000. The exact premium you pay is based on your credit rating.

Farm Labor Bond Requirements: Can I Get One with Bad Credit?

Your credit history is the best guide for evaluating how much risk applies to bonding you. While some surety companies will deny applicants with bad credit, Viking Bond Service does not believe your credit solely defines you. Our Bad Credit Surety Bond Program works to get you bonded despite your problematic credit. Let us help you to get your business going with the lowest possible bond premiums.

Do You Need to Renew a Farm Labor Bond?

A farm labor bond is valid for a year. If you continue working as a farm labor contractor, you will need to renew the bond annually. Each bond renewal requires another credit check. The good news is that if you improve your credit, your premiums will be reduced.

How Can I Get a Farm Labor Contractor Surety Bond?

At Viking Bond Service, we make acquiring surety bonds quick and hassle-free. Take a few minutes to complete our online bond application. We'll get you a competitive quote for a farm labor contractor surety bond ASAP. Or give us a call at 1-888-2-SURETY (1-888-278-7389). We're here to help!