Federal Bonding Program

New York State proudly supports the Federal Bonding Program, a U.S. 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 six months of no-cost fidelity bonding coverage to businesses that hire eligible job seekers facing multiple barriers to employment. 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 New York State Local Bonding Coordinators listed in the section below.

Visit the United States Department of Labor Federal Bonding Program website.

What is the New York State Federal Bonding Program?

It is a hiring incentive established to assist “high risk” job applicants obtain employment. The program issues Fidelity Bonds to businesses that hire eligible job seekers. The program is federally sponsored by the United States Department of Labor.

What is a Fidelity Bond?

A fidelity bond is insurance purchased to indemnify a business from the loss of money or property (products or equipment) in the workplace due to employee dishonesty. This type of bond will cover losses from theft, embezzlement, larceny and forgery. The fidelity bonds issued under the FBP are from Union Insurance Group (Chicago, Illinois). The actual bonds purchased by NYSDOL are written by the Chubb Group of Insurance Companies.

How does the Fidelity Bond assist on an eligible job seeker with finding employment?

The fidelity bond is issued to the business, at no cost, for six months. The bond serves as an incentive for hiring an applicant who may be facing barriers to employment. Barriers can include things such as: a poor credit history, minimal work experience, a dishonorable military discharge, or a felony or misdemeanor conviction. Businesses can hire the employees they need without taking on the potential 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?

The Federal Bonding Program provides loss protection to a business that hires a person who has a background that may cause the business to question his or her honesty, which could lead to an adverse hiring decision. The following groups of targeted job seekers are eligible to be bonded under the program:

• Individuals with a previous misdemeanor or felony conviction(s)
• People who are in active recovery from substance abuse (e.g., Persons who have completed a substance abuse treatment program).
• Individuals who have poor credit or who have declared bankruptcy in the past
• Anyone having a dishonorable discharge from any branch of the military
• People with little or no work history behind them
• Individuals who are receiving any form of public assistance benefits (e.g., Medicaid, SNAP, cash benefits or housing subsidies)
• Youth or young adults who have current or previous participation in a state or locally-operated employment program
• Individuals who could benefit from bonding to secure a promotion with a current employer or to prevent a lay-of

Can bonding be issued to cover an already employed worker?

The FBP is primarily designed to be a hiring incentive for new employees. However, bonds can be issued to cover an incumbent worker who is eligible for the program or not readily bondable by their employer. As previously mentioned, coverage can be used to secure a promotion or transfer or to prevent a layoff.

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 for their employees typically do not cover individuals that are eligible for the Federal Bonding Program. This is because, due to the barriers they face, these job seekers may not be able to be covered by commercially-purchased fidelity insurance. Only the FBP will issue bonds that cover anyone who may fall into this category, As a result of the Federal Bonding Program, this barrier to hiring is eliminated.

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

Bonding coverage is issued at no cost for 6 months. If requested, before the initial six months ends, businesses can request an additional 6 months of no-cost coverage, for a total of 12 months of free coverage.

Generally, after the first six months of coverage through the FBP, with no acts of employee dishonesty, the employee is eligible to be commercially bondable through the businesses’ regular fidelity coverage.

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

Bonding can be issued to a: full-time, part-time, temporary worker and temp to perm employee

Who must request issuance of the fidelity bond?

Bond issuance can be requested by either the business doing the hiring or the job applicant. The best way to begin the process is to contact either a Local Bonding Coordinator in the closest city or county by using the contact list below, OR to contact the New York State Bonding Coordinator by email at: [email protected] or by phone at: (518) 485-8037

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 requested and issued under the Federal Bonding Program?

Bonding coverage is determined by the business who will be hiring the worker to be bonded. Bonding coverage begins at the default amount of $5,000 and increases in increments of $5,000 to a maximum of $25,000. Any coverage requested that is over $5,000 mut be briefly justified in writing.

What paperwork is the business required to complete?

None. Once the date is set for the applicant to start work, the bond can begin to be processed and requested. The New York State Department of Labor completes all required paperwork. The business is not required to complete any paperwork or maintain any records on file, and the bond is self-terminating. Once requested, the bond is mailed directly to the business by Union Insurance Group.

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

Contact the nearest Local Bonding Coordinator from the list below.

State Bonding Coordinator
New York State Department of Labor
State Office Campus
Building 12, Room 440
Albany, NY 12226
Email: [email protected]