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Employment Agency Bond

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What is an Employment Agency Bond?

An employment agency is categorized as a business that acts as an intermediary between job seekers and companies who are hiring employees. These services could be provided online or in-person, and fees are charged to help place the right candidate with a hiring business.

In several states, businesses operating as an employment agency are required to secure a surety bond. This requirement, more commonly referred to as an employment agency bond, is designed to provide protection to an employment agency's customers as well as the state where the company operates.

Who Needs an Employment Agency Bond?

A company that offers services to job seekers or businesses interested in hiring qualified candidates is considered an employment agency. Depending on state or local licensing regulations, a business defined as an employment agency may be required to purchase a surety bond as part of its licensing requirements. Employment agency bonds are necessary in many states, but not all, so it is essential to check with the local licensing authority to determine if a bond is required in order to operate legally in your jurisdiction.

Employment Agency Bond Obligee Details

When an employment agency bond is required of a licensed employment agency, the bond works similarly to other surety bonds. Three parties are involved in the process: the licensed employment agency, known as the principal of the bond, the state or local licensing authority requiring the bond, known as the obligee, and the surety company providing the bond on behalf of the employment agency.

The obligee of an employment agency bond may be the state's Department of Labor or the Commercial Licensing Department of the state government. When a claim is made against the bond, the surety company pays the claim to the obligee and then requires the principal to repay the claim amount over time.

How Much Does an Employment Agency Bond Cost?

Like other surety bonds, the cost of an employment agency bond varies from agency to agency, depending on several different factors. First, the bond cost is based on the total amount of the bond that must be in place for a licensed employment agency. Second, the surety company offering the bond reviews an agency's credit history and other financial factors of the business to determine its level of risk of future bond claims.

Based on the bond amount and the agency's financial track record, the surety company calculates the cost of the bond as a percentage of the total bond amount. This cost can range from 1 to 10% of the bond amount for most employment agencies.

How do You Get an Employment Agency Bond?

Getting an employment agency bond is a straightforward task. Agencies in need of a bond may submit a brief online application detailing the type of bond they need, the amount of the bond required by the obligee, and the state in which they are operating. The surety company then determines the cost of the employment agency bond and provides a quote to the agency. The employment agency then pays for the bond, and the details of the bond coverage are provided shortly after payment is received. Employment agency bonds are renewed each year through a similar process.


Frequent Questions

How much does this bond cost?

The cost is usually 1 – 10% of the bond amount. Keep in mind that pricing varies based on the bond amount, and your financial strength.

What is the process?

Apply and get approved on our website, sign the surety agreements, and we will ship the bond out. If you would like to learn more about what surety bonds are and how they work, you can read our detailed guide here.

Can I get this bond with bad credit?

Yes, it’s possible, but bad credit usually results in higher rates.

Does it matter where I get a bond?

Yes. We provide the lowest rates possible as a result of the large volume of bonds we write.

What if a false claim is filed?

You must contact us immediately, as we have a team of claim specialists here to find a resolution for you. Keep in mind, it is crucial that you work with an expert in the surety industry. Learn more about how to ensure you choose the proper bond company.

Are you looking for a different type of bond?

You can take a look at our full list of license and permit bonds.


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Jennifer Henson
Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
David Tillotson
Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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About JW Surety Bonds
We are a family owned and operated agency established in 2003. We started with just two people, and grew to become the largest volume bond producer in the nation with 50+ employees. Since day one, our team focus has been on providing real-time online quotes, an easy process, and the best in claims defense. Learn more about our company.