What is the California LLC Employee/Worker Bond?
The State of California LLC Employee/Worker Bond (also called an LLC Wage Bond, CSLB LLC Bond, and an Employee Wage Bond) is a surety bond required by the California Contractors State License Board (CSLB) for all California licensed contractors with a business entity registered as a Limited Liability Company (LLC).
Like most bonds, the LLC Employee Wage Bond is a contract between the following three parties:
- The principal: the party required to get the bond (in this case, the LLC).
- The obligee: the entity that requires the bond (the CA CSLB).
- The surety company that issues and backs the bond.
The bond essentially ensures that the employees of the LLC are protected from financial losses resulting from the non-payment of their wages, interest on wages, and fringe benefits. For instance, if the LLC fails to pay their employee owed wages, that employee can file a claim against the bond (making them the claimant). If the surety finds the claim valid and the LLC fails to remediate the situation, the surety will compensate the claimant up to the bond amount.
This is where surety bonding differs from typical insurance. The principal (aka the LLC) is financially responsible for reimbursing the surety company for all valid claims they pay out, plus any additional fees and expenses incurred by the surety.
Who has to get this bond?
As stated in the California Business and Professions Code, Section 7071.6.5, the LLC Employee Worker Bond is a requirement for all contractors operating as Limited Liability Companies in the state of California. The intent is to protect employees from any damages resulting from an LLC failing to pay their wages, interest on salary, fringe benefits, or any other benefits they may be entitled to.
The LLC Wage Bond does not replace the CA Contractor License Bond, which is also required in the State of California. The LLC Employee Wage Bond and the contractor license bond also differ from the Bond of Qualifying Individual (BQI), which you can learn more about here.
How much does an LLC Employee Wage Bond cost?
The California CSLB LLC Bond requires a bond amount of $100,000. Of course, this is not how much your bond will cost.
What you end up paying for your bond will vary based on your credit. Fortunately, your credit will be checked using a soft inquiry, which will not harm your score. Applicants with excellent credit may see quotes start as low as 1% of the bond amount. However, if you have nonstandard credit, we encourage you to apply for your bond anyways. Applying for a quote is free, and at EZ Surety Bonds, we work with multiple surety markets to find you the best quote available.
The obligee for the California LLC Employee/Worker Bond is the Contractors State License Board (CSLB), whose contact information is listed below:
Contractors State License Board
9821 Business Park Dr.
Sacramento, CA 95827
Contractors State License Board
P.O. Box 26000
Sacramento, CA 95826
Phone: (800) 321-CSLB (2752)
Phone (outside California): (916) 255-3900
How to get your California LLC Employee/Worker Bond
We know surety bonding can be frustrating. Our goal at EZ Surety Bonds is to help make that process a little easier. Simply fill out our short online application, and someone will contact you within 24 hours regarding your quote.
We’ll help you along every step of the way! For more questions, you can reach our surety experts at firstname.lastname@example.org or by calling 1-866-546-4605.
Frequently asked questions
To become a licensed contractor in California, you must complete the following:
• Identify on your license class
• Designate a Qualifying Individual
• Submit your contractor license application with all necessary documents
• Obtain any required surety bonds:
◦ Contractor License Bond
◦ LLC Employee/Worker Bond, if applicable
◦ Bond of Qualifying Individual, if applicable
• Meet the minimum insurance requirements (workers’ compensation and LLC liability)
• Additional application requirements which, as of 2022, include a $450 nonrefundable application fee
For more information regarding the contractor license application process, check out our detailed guide on How to get a California Contractor License.
The California LLC Employee/Worker Bond has a required bond amount of $100,000. The bond requires a credit check, and applicants with excellent credit may see quotes for this bond starting as low as 1% of the bond amount. Even if you have nonstandard credit, at EZ Surety Bonds, we work with a variety of markets to find the best quotes available. The application is free and only takes a few minutes. Apply for your bond anyway, and one of our surety experts will contact you within 24 hours regarding your quote.
Once you purchase your CA LLC Bond, we will mail the original bond to you. Some obligees require the original bond document signed and shipped to their address, while others will accept an electronic copy. As of 2022, the California CSLB requires you to submit your bond to the CSLB’s Headquarters Office within 90 days of the bond’s effective date. However, every obligee has different filing requirements, so we recommend double (and triple) checking your obligee’s bond filing requirements before doing anything with your bond.