TEN37-07acc.pdf

ETA Advisory File Text

EMPLOYMENT AND TRAINING ADMINISTRATION U.S. DEPARTMENT OF LABOR WASHINGTON D.C. 20210 NO. 37 -07 TRAINING AND EMPLOYMENT NOTICE DATE March 27 2008 TO ALL STATE WORKFORCE AGENCIES ALL STATE WORKFORCE ADMINISTRATORS ALL ONE-STOP CENTER SYSTEM LEADS ALL ONE-STOP CENTER SYSTEM STAFF FROM Brent R. Orrell s Acting Assistant Secretary SUBJECT Updated List of State Federal Bonding Program Coordinators 1. Purpose . To provide an updated list of State contacts for the Federal Bonding Program and to encourage its use in the workforce system. 2. Background . In 1966 the U.S. Department of Labor established the Federal Bonding Program to provide Fidelity Bonds that guarantee honesty for at- risk job seekers particularly ex-offenders. The bonds cover the first six months of employment. There is no cost to the job applicant or the employer. In most states the bonds are made available through the state agency responsible for workforce matters. Fidelity Bonding is insurance to protect the employe r against employee dishonesty. It covers any type of stealing including theft forgery and embezzlement. 3. Employers and Jobs that May be Covered . Bonds can be issued to a cover any at-risk worker on any job full or part-time and b any employer reg ardless of whether the company has or has not purchased a commercial Fidelity Bond. Most of the time the key reason for bond issuance will be to overcome an employer s fear that an at-risk applicant will be an untrustworthy worke r regardless of the specific job. Some jobs particularly where money and small tools goods are handled routinely and can very easily be stolen have traditionally mandated worker bonding. The organization purchasing the bonds is free to choose to issue bonds for only certain classes of jobs. Tech nical assistance on this matter can be provided to staff by a call to the Fede ral Bonding Programs toll-free hotline 1-800-233-2258. 4. Persons Eligible for Bonding Services . Any at-risk job applicant is eligible for bonding services including ex-offenders recovering substance abusers alcohol or drugs welfare recipients and other persons having poor financial credit economically disadvantaged youth and adults who lack a work history individuals dishonorably discharged from the military and others. Ex-Offenders EMPLOYMENT AND TRAINING ADMINISTRATION U.S. DEPARTMENT OF LABOR WASHINGTON D.C. 20210 have been the primary target group for using this service. All persons bonded must meet the legal working age set by the state in which the job exists. Self- employed persons are not eligible for bonding services. Covered workers must be an employee who earns wages with federal taxes automatically deducted from their paycheck. Bonds also can be issued to cover already employed workers who need bonding in order to a prevent being laid off or b secure a transfer or promotion to a new job at the company. 5. Purchasing Fidelity Bonds . Almost all States have federal bonding coordinators and in these States One-Stop Career Centers and other placement agencies can purchase bonds directly from the State Coordinator. An updated list of State Federal Bonding Program Coordinators is attached. Kentucky Oregon Nev ada and Virginia do not have State Federal Bonding Program Coordinators and in these States One-Stop Career Centers and other placement agencies can pu rchase bonds directly from the Federal Bonding Program at the McLaughlin Compan y by contacting either Ron Rubbin 1-800-233-2258 ext. 246 or Roland Brack at 1- 800-233-2258 ext.271 e-mailing them at rrubbin McLaughlin-online.com Brack4bonds aol.com or mailing in the attached Fidelity Bond Purchase Agreement. 6. Cost of Fidelity Bonds . Fidelity Bonds can be purchased in packages of 25 50 75 and 100 bond units. Each bond unit provides 5 000 employee dishones ty insurance for a six-month period. Bond package costs are as follows No. Bonds Units Total Package Cost Cost Per Unit 25 2 450 98 50 4 600 92 75 6 550 87 100 8 400 84 Bond units purchased must be issued to employers within 24 months following the date of bond package purchase. Once issued each unit of bonding pro vides the employer with 6-months insurance coverage starting the first day of work for the bondee i.e. the individual worker at a specific employer who is covered by the bond . The McLaughlin Co. in Washington D.C. a private insurance brokerage firm is the exclusive U.S. agent of St. Paul Travelers Insurance Company for the fidelity bonds issued under the Federal Bonding Program. Guidelines on the P urchase Use of Fidelity Bonds can be found in the official Federal Bonding Program website at www.bonds4jobs.com . In addition there is a self-training video CD available upon request by calling 1-800-233-2258. EMPLOYMENT AND TRAINING ADMINISTRATION U.S. DEPARTMENT OF LABOR WASHINGTON D.C. 20210 7. Determining the bond amount to cover the bondee . One bond unit provides 5 000 of coverage for six months. Past experience shows that 5 000 of coverage is sufficient to facilitate most job placements. However coverage amounts for individual employees can be either 5 000 10 000 15 000 20 000 or 25 000 depending on the level of risk at the job. Issuance of larger bond amounts not to exceed five bond units or 25 000 coverage should be limited only to workers who can readily steal at one time more than 5 000 in money or propert y. Program staff has discretion in determining the appropriate level of bon d coverage but it should be based upon reasonable justification by the employer as to the theft risk of the job. 8. Continuing Fidelity Bonds past the initial six months of employment . Once the six months initial employment period covered by the fidelity bonds is over continued bond coverage can be provided either through a an addition al bond issued by the One-Stop Career Center or placement agency or b if no claim has been paid due to employee dishonesty a bond purchased at the regular commercial rate by the employee from St. Paul s Travelers Insurance. 9. Allowability of paying for bonding services under the Workforce Investme nt Act WIA . Under WIA Core Services required at each One-Stop Career Center includes placement assistance. The purchase of Fidelity Bonds as a support service at One-Stop Career Centers can be delivered as either a staff assisted Core Service or in conjunction with case managed I ncentive Services. For programs authorized outside WIA the cost of bonding also may be a legitimate expenditure as a support service associated with the del ivery of job placement activities. 10. Action Required . WIA and other employment and training delivery systems are encouraged to continue to incorporate the fidelity bonding employer incentive into the delivery of job placement services to assist ex-offenders and o ther at-risk job seekers. 11. Inquiries . Questions regarding this TEN should be directed to Michelle Lee- Jones of the Office of Youth Services at 202 693-3932 or at jones.michelle dol.gov . Or visit the Federal Bonding Program website at www.bonds4jobs.com . Attachments . List of Federal Bonding Program State Coordinators and Fidelity Bond Purchase Agreement with Explanatory Information.