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Pennsylvania proudly supports the Federal Bonding Program A US Department of Labor Initiative since 1966 A Unique Job Placement Tool for the “At-Risk” Job Seeker In 1966, the United States Department of Labor (USDOL) created the Federal Bonding Program (FBP) as a unique job placement tool to assist at-risk job applicants. The general purpose of the program has not changed since 1966 – to provide fidelity bonding at no cost to an employer for the first six months of employment for hard-to-place job applicants. The Pennsylvania Department of Labor and Industry (DLI) has been an active participant in this program for many years and will continue to promote the benefits of the FBP to all PA CareerLinks? and employers throughout the Commonwealth. Frequently asked Questions:Q. WHAT IS THE PENNSYLVANIA STATE FEDERAL BONDING PROGRAM?? A. The Federal Bonding Program was created as an incentive to employers to hire “at-risk”, hard-to-place job seekers by providing a fidelity bond (business insurance policy) protecting employers against loss of money or property due to employee dishonesty. The bond is good for six (6) months in the amount of $5,000 at no cost to the employer.Q. WHAT IS A FIDELITY BOND?? A. It is a business insurance policy that protects the employer in case of any loss of money or property due to employee dishonesty.? It is like a “guarantee” to the employer that the person hired will be an honest worker.?Fidelity Bonds issued under the FBP are insurance policies of The Travelers Casualty and Surety Company of America. The McLaughlin Company in Washington, DC is the agent for Travelers Casualty and Surety Company in managing the program nationwide.? DLI purchases bond packages from The McLaughlin Company to assist job seekers with barriers find employment. Q. HOW DOES THE BOND HELP SOMEONE GET A JOB?? A. The bond is given to the employer free-of-charge for six months and serves as an incentive to the company to hire a job applicant who is an ex-offender or has some other “risk” factor in his/her personal background such as poor credit, a lack of a work history, dishonorable military discharge, or bankruptcy.? The employer is able to acquire the worker’s skills without facing the risk of worker dishonesty on the job. Q. WHAT EXACTLY DOES THE BOND INSURANCE COVER?? A. It insures the employer for any type of stealing by 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. Q. WHAT RESTRICTIONS EXIST IN THE PROGRAM’S BOND COVERAGE?? A. The worker must meet the legal age for working in Pennsylvania; there are no age limits.? Workers must be paid wages with Federal taxes automatically deducted from pay.? The job to be filled must have the potential to last at least six months.? Self-employed persons cannot be covered. Q. WHO DOES THE PROGRAM HELP?? A. Bond coverage is provided for any person whose background usually leads employers to question his/her honesty and in effect, denies that person a job. The program will cover any person who may be considered a “risk” due to being in one or more of the following groups:? Ex-offender with a record of arrest, conviction or imprisonment; anyone who has ever been on parole or probation, or has any police record Recovering substance abusers; persons rehabilitated through treatment for alcohol and/or drug abuse? Poor credit record or declared bankruptcy? Dishonorably discharged from the military? Persons lacking a work history? Economically disadvantaged youth, including participants of any summer youth program operated by State and/or local government agencies? Q. CAN AN ACTIVE COMPANY EMPLOYEE QUALIFY FOR THIS PROGRAM??A. The main purpose of the FBP is to help secure employment for applicants who are having a difficult time obtaining employment due to their questionable backgrounds.? However, a bond can be issued to cover an incumbent worker who is not bondable under the employer’s insurance and needs the program’s bonding in order to secure a transfer or promotion to a new job requiring bonding or to prevent being laid off or terminated. Q. WHAT IS THE DIFFERENCE BETWEEN COMMERCIAL FIDELITY BONDS AND THIS PROGRAM?? A. Fidelity Bonds employers purchase commercially do not cover anyone who has a poor credit history or has already committed “a fraudulent or dishonest act.”? Ex-offenders and other job applicants with questionable backgrounds are designated by the insurance industry as being not bondable because they are too risky to insure for job honesty.? Only the FBP will issue bonds to employers to cover anyone who is usually not bondable.? As a result, bonding is eliminated as a barrier to employment and the program serves as a unique job placement tool.? Q. WHAT SHOULD I DO IF A COMPANY TELLS ME I’M “NOT BONDABLE”?? A. Assure the prospective employer that DLI will issue a $5,000 Fidelity Bond to his company in your name for the first six (6) months of your employment effective on the day you start work. The main reason that the FBP exists is to encourage employers to hire “at risk” applicants by offering them a bonding program.? Q. HOW LONG DOES THE PROGRAM’S FIDELITY BOND COVERAGE EXIST??? A. The key purpose of the program’s bond is to help an “at-risk” applicant obtain a job.? The bond insurance is issued free-of-charge to the employer for a period of six (6) months.? This should give the new employee a sufficient amount of time to demonstrate job honesty and instill employer confidence for continued employment. If the employer decides to purchase an additional six-month bond, the employer may do so at the same rate it costs DLI ($98.00 for each $5,000 unit of bond coverage). Q. IS THIS PROGRAM AVAILABLE FOR PART-TIME OR TEMPORARY JOBS??? A. Yes.? Part-time employment and individuals hired by “temp agencies” for long-term assignments six months or more in duration or for temporary-to-permanent positions can be bonded.? Q. ARE WELFARE CLIENTS ELIGIBLE FOR THIS PROGRAM??? A. Most welfare recipients will be eligible due to the fact that they have a poor credit history or have declared bankruptcy.? Also, some of these individuals will be eligible due to being ex-offenders or recovering substance abusers or lacking a work history.? Q. WHEN SHOULD A FIDELITY BOND BE REQUESTED??? A. Either the employer or the new employee must call the State Federal Bonding Coordinator when the new employee reports for the first day of work. Q. WHERE CAN EMPLOYERS OBTAIN FEDERAL BONDING INFORMATION?? A. Employers can either contact the local PA CareerLink? or the DLI State Federal Bonding Coordinator in Harrisburg to receive FBP information. Job applicants are encouraged to discuss the benefits of the program during employment interviews.? Q. CAN THE BOND BE ISSUED AT ANY TIME??? A. No.? Fidelity Bonds will only be issued on the first day of employment. The FPB insures a specific employer and employee for a six-month period.? The job start date will always be the effective date of the bond insurance which will terminate six months later.??? Q. WHAT AMOUNT OF BOND INSURANCE COVERAGE CAN BE ISSUED?? A. Bond coverage is available in units of $5,000.? The maximum six-month coverage is $25,000 (5 units).? The bond has no deductible amount of liability for the employer.? In order to obtain a bond greater than $5,000, verbal justification must be provided to and approved by the Pennsylvania State Federal Bonding Coordinator.?? Q. HOW MUCH PAPERWORK IS REQUIRED TO ISSUE A BOND??A. None.? On the first day the new employee reports to start work, the bond can be issued instantly.?A fifteen (15) minute phone call to the State Federal Bonding Coordinator is all that is required. The employer or new employee will not have to fill out forms or maintain special records since the bond is self-terminating.? The certified bond is mailed directly to the employer within fifteen (15) day by The McLaughlin Company in Washington, DC an agent for the Travelers Casualty and Surety Company.? Q. WHO IS THE PA STATE FEDERAL BONDING COORDINATOR??? Roger MattsonPennsylvania Department of Labor and IndustryBureau of Workforce Development 651 Boas Street 12th FloorHarrisburg, PA 17121-0750Phone: (717) 787-6915Fax: (717) 787-5785Email: HYPERLINK "mailto:romattson@state.pa.us" romattson@state.pa.us dli.state.pa.us Q. WHAT POSITIVE COMMENTS HAVE BEEN MADE REGARDING THE FBP??? The FBP is considered to have a 99% success rate since historical data reveals only 1% of bondable job placements take actions that prove to be dishonest.? A research study published by a university in Texas surveyed employer attitudes toward hiring ex-offenders.? Only 12% said they were willing to hire these applicants, however, 51% said they would hire ex-offenders if they were bonded.? New York State found that having a job helps prevent a parolee from returning to prison, considering 89% of persons who violate parole are unemployed at the time.? Texas found that “Project Re-Integration of Offenders” bonding and other services for releases from its state prisons saved the State $10 million annually, and made tax-payers out of tax-users.? A study of the U.S. Department of Justice found that released felony offenders with histories of alcohol and drug offenses were able to secure steady employment by offering employers bonding as a job-hire incentive.? The Pittsburgh City Paper brought attention to the fact that “a criminal past may prevent the transition from welfare to work” and called for expanded use of the FBP to deal with this job placement problem. ................
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