Federal Bonding Program

Federal Bonding Program


New York State proudly supports the Federal Bonding Program, a US Department of Labor initiative since 1966.

The Federal Bonding Program (FBP) was created as a hiring incentive for job seekers with employment challenges. The FBP provides no-cost fidelity bonding for six months to businesses that hire hard-to-place job seekers. The benefits of the FBP are promoted to businesses and job seekers at all New York State Career Centers. For more information about the FBP, contact Central Office bonding staff at [email protected], or any of the local bonding coordinators listed below.

NYSDOL Documents:

Frequently Asked Questions

What is the New York State Federal Bonding Program?

It is a unique tool established to help a “high risk” job applicant get and keep a job. The program issues Fidelity Bonds and is federally sponsored by USDOL.

What is a fidelity bond?

It is a business insurance policy that protects a business against any loss of money or property in the workplace due to an act of employee dishonesty. It essentially provides an insured guarantee that the individual hired will be an honest worker. The fidelity bonds issued under the FBP are insurance policies from the Travelers Casualty and Surety Company of America. We purchase bond packages from their agent (The McLaughlin Company) to assist job seekers who have barriers to finding and maintaining employment.

How does the bond help someone get a job?

The bond is issued to the business at no cost for six months. It serves as an incentive to hire an applicant who has an employment risk factor in his or her background, such as poor credit or lack of a work history. Businesses are able to hire employees they need without the risk of worker dishonesty.

What exactly does the bond insurance cover?

It insures businesses for any type of stealing (such as theft, forgery, larceny or embezzlement). 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).

What restrictions exist in the program's bond coverage?

The worker must meet the legal age for working in New York State. Employers must pay wages to the worker, with federal taxes automatically deducted from pay. The job must have the potential to last at least six months. Because the FBP is a hiring incentive, it does not cover self-employed persons.

Who does the program help?

It provides bonding coverage to a business that hires a person whose background may cause the business to question his or her honesty, which may lead to an adverse hiring decision such as refusal to hire or termination of employment. The program covers job seekers with certain risk factors, including:

  • Any felony or misdemeanor criminal conviction
  • Recovery from substance abuse (persons rehabilitated through treatment for alcohol and/or drug abuse)
  • Poor credit record or declaration of bankruptcy
  • Dishonorable discharge from the military
  • Lack of work history
  • Current or past participation in any State or local-operated summer or year-round youth program

Can bonding be issued to cover an already employed worker?

The FBP is primarily designed to be a hiring incentive for new hires. However, bonds can be issued to cover an incumbent worker who is not currently bondable in their place of employment. Additionally, FBP coverage may be needed to secure a transfer or promotion to a new job or to prevent layoff or termination.

Since businesses buy fidelity bond insurance to protect against employee dishonesty, why is the program's bond needed?

Fidelity bonds that are available for businesses to purchase typically do not cover anyone who has a poor credit history or who has already committed a fraudulent or dishonest act. Job applicants with criminal records and/or other background issues are designated by the insurance industry as "not bondable". Only the FBP will issue bonds that cover anyone who is usually not bondable. As a result, bonding as a barrier to hiring is eliminated.

How long does the program's fidelity bond coverage last?

Bonding coverage is issued at no cost to businesses or job seekers for six months. After the first six months, bonding coverage will automatically expire unless it is renewed.
If no claim for employee dishonesty is submitted during the initial six months of FBP coverage, continued bond coverage can be purchased by the business at a reduced rate through the Federal Bonding Program. In some cases, businesses may qualify to receive an additional no-cost renewal bond for another six months, for a total of up to 12 months of no-cost bonding coverage.


Can bonding be issued for a worker assigned to a part-time job or a temporary job?

Yes. Part-time employment and temporary work of six months or more can be bonded.

Is a person collecting public assistance automatically eligible under the FBP?

Yes. The FBP does provide bonding coverage to businesses that hire individuals who are collecting any type of public assistance.

Who must request issuance of the fidelity bond?

Bond issuance can be requested by either the business or the job applicant. To apply, contact the nearest Local Bonding Coordinator from the list above.

Can the bond be issued at any time?

No. There must be a job offer with a start date before a bond can be issued. The bonding coverage will start on the job start date and will automatically expire six months from that date (unless it is renewed).

What amount of bonding coverage can be issued?

Up to $25,000 in bonding coverage can be provided, in increments of $5,000. There is no liability deductible for the business. Bonds are automatically set to $5,000. Bonding coverage amounts greater than $5,000 must be approved by NYSDOL.

What paperwork is the business required to complete?

None. Once the date is set for the applicant to start work, the bond can be issued instantly. The business is not required to complete any paperwork or maintain any records on file, and the bond is self-terminating. The bond is mailed directly to the business by The McLaughlin Company (as the agent for Travelers).

How can a business or job seeker start the bonding process?

Contact the nearest Local Bonding Coordinator from the list below.

Find Your Local Bonding Coordinator

State Bonding Coordinator
New York State Department of Labor
State Office Campus
Building 12, Room 440
Albany, NY 12240
Email: [email protected]