The state of Kentucky requires employers in the construction and mining industries, including the transportation of minerals, to obtain a Kentucky Labor Cabinet Wage and Welfare Bond. This requirement is restricted to employers with less than five years of continuous operations within the state.
This Kentucky Construction Performance Bond is a type of surety bond, which is a contract between three parties: the principal (contractor), the obligee (KY Labor Cabinet), and the surety company. This Wage and Welfare Bond is required to guarantee that the contractor will fulfill their responsibilities, including the payment of employee wages, overtime, vested vacation and sick pay, and all other payments provided for under Kentucky Wage and Hour Laws.
When an injured party files a claim against the bond, the surety company will investigate the validity of the claim and, if it is valid, will compensate the affected party up to the bond amount. For example, a claim could be made if the principal fails to perform according to the terms of the agreement, declares bankruptcy, or commits an offense, such as not paying a subcontractor
In contrast to an insurance policy, a surety bond requires the principal to reimburse the surety company in the event of a paid-out claim, plus any additional fees or expenses incurred by the surety during the investigation into the claim.
Employers involved in construction work, mining, severance, preparation, or transportation of minerals in Kentucky who have been operating for less than five consecutive years are required to obtain a Kentucky Labor Cabinet Wage and Welfare Bond.
This Wage and Welfare Bond protects workers from non-payment of wages due to negligence or fraud on behalf of the employer. Kentucky law specifies that any employee whose wages are secured by a bond may obtain payment of their wages, liquidated damages, and attorney's fees in accordance with the bond.
The Kentucky Labor Cabinet Wage and Welfare Bond amount must be equal to the employer's gross payroll operating at full capacity for a period of four weeks. Work that is subject to Prevailing Wage regulations would have those rates applied.
How much your bond cost will depend on the calculated bond amount and a required soft credit check. Contractors with excellent credit may have a premium rate as low as 1-3% of the bond amount. The credit check required to quote your bond will not harm your credit score.
For applicants with nonstandard credit, at EZ Surety Bonds we work with a variety of sureties to find you with the best quotes available.
The Kentucky Labor Cabinet is the obligee (the entity that requires you to have the bond) for the Kentucky Labor Cabinet Wage and Welfare Bond. The following is their contact information:
Commonwealth of Kentucky Labor Cabinet
Division of Wages and Hours
500 Mero Street
3rd Floor
Frankfort, KY 40601
Phone: (502) 564-3534
With EZ Surety Bonds, you can get your KY Wage and Welfare Bond quickly and easily by completing our short online application. One of our friendly surety experts will contact you within 24 hours regarding your free quote.
Our surety experts are always happy to assist. If you have any questions, please contact bonds@southcoastsurety.com or call 1-800-361-1720
A Wage and Welfare Bond is a surety bond that guarantees employers will pay wages and provide benefits promised to employees under the Kentucky Wage and Hour Laws (KRS Chapter 337).
In contrast, a contractor license bond is another type of surety bond that certain types of contractors must obtain to guarantee they are following ethical business practices and laws set by the local or state government. These bonds are often required to qualify for licenses or permits from governing authorities.
If you are a licensed contractor who has not operated continuously in Kentucky for more than five years, you will need to obtain a Wage and Welfare Bond through the Kentucky Labor Cabinet.
The Kentucky Labor Cabinet Wage and Welfare Bond amount will vary based on the employer's gross payroll operating at full capacity for a period of four weeks, and rates that fall under Prevailing Wage regulations.
After calculating your bond amount, you can apply for your bond. Applicants with optimal credit may receive quotes as low as 1-3% of the bond amount. The soft credit check required to quote your bond will not harm your credit score.
We work with a variety of surety markets to offer competitive quotes. Because we use a soft credit check, we encourage you to apply for your bond even if you have nonstandard credit. Simply apply on our website today and one of our surety experts will contact you regarding your free quote within 24 hours.
Upon purchasing the surety bond, the original document will be mailed to you. The obligee may require you to file the original bond in some cases, while an electronic copy may be accepted in others. Every obligee has its own requirements; ensure you file your bond according to your obligee’s standards.
You’ll know if you need a surety bond because some entity will have required you to obtain one. They must also inform you of which specific bond type you’ll need. There are thousands of bonds across the country, all of which vary by state and industry.
Visit EZSuretyBonds.com to browse hundreds of bonds by state, type, or industry.
