Federal Bonding Program offers incentive to hire ex-offenders

FBLogoWhile ex-offenders need all the help they can get when searching for a job, there’s one effective tool that many people are unaware of, even though it’s been around for nearly 50 years.

That tool, the Federal Bonding Program, was created by the U.S. Department of Labor to help at-risk job seekers – including ex-offenders, substance abusers, welfare recipients and those dishonorably discharged from the military – secure employment.

Fidelity Bonding insurance, sometimes called “employee dishonesty insurance,” is a type of coverage that most employers buy to insure themselves against monetary and property losses due to such dishonest acts by employees as theft, embezzlement, larceny and forgery. Since the risk of these things happening is quite low, the premiums for this type of insurance are also very low. As a result, certain categories of people, including ex-offenders, are not covered under these commercial policies, creating one more barrier to employment.

That is why the government stepped in long ago with a special program so that at-risk job seekers would be more attractive to future employers. The bonds are issued to employers free of charge as an incentive to hire these employees.

The bonds range from $5,000 to $25,000 and last for six months, a period which should be sufficient for new employees to prove themselves as honest and competent workers. If no claim is made against the policy, the employer can purchase commercial fidelity bond insurance coverage at the normal rates.

Easy for both employer and employee

The process is fairly simple and straightforward. Any full-time or part-time employee who is paid wages can be bonded, even those working for temporary agencies.

The job seeker does not need to fill out an application. The bonds are issued immediately to employers without an approval process. If employee dishonesty does occur, the employer does not need to pay a deductible.

Dishonesty, in fact, is rare and has happened with less than 1 percent of participants in the program thus far.

Until about 15 years ago, funding came directly from the U.S. Department of Labor, but now the program is operated as a federal-state partnership, using state and local funds, including some monies from the Workforce Investment Act.

At present, any public agency, private industry group or community-based organization can acquire the bonds and deliver bonding services by purchasing a bond package through the McLaughlin Company. These are often offered, however, through the various state employment offices, which go by a variety of names, depending on the state.

How job seekers can take advantage of bonding 

The Federal Bonding program exists to help at-risk job seekers gain employment, but you have to know how to approach employers and convince them that this is a major reason to hire you, since any risk they think they might have will be covered.

Your job counselor at your local One-Stop Career Center should be able to help you develop a strategy to use in approaching employers. It’s one of the things that you need to bring up at the appropriate point in your interview.

The One-Stop Career Center may also be able to arrange the issuance of the fidelity bond or direct you to another agency or organization that can if they can’t.

For more information about the Federal Bonding Program and other employer incentives, visit the employer incentive section of the Jail to Jobs website. 


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Posted in Hiring Incentives.

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