Federal Bonding Program Overview
The Federal Bonding Program issues fidelity bonds, which are business insurance policies that protect employers in case of theft, forgery, larceny, or embezzlement of money or property by an employee who is covered by the bond. The bond coverage is usually $5,000 with no deductible amount of liability for the employer. Higher amounts of coverage, up to $25,000, may be allowed if justified. The bond does not cover liability due to poor workmanship, job injuries, or work accidents.
Bond packages are issued by the Department of Labor to a purchasing organization such as a job placement agency or employer. The purchasing organization can be public or private, nonprofit or for profit. The job placement organization or employer is then able to bond individuals who other bonding agencies usually will not, such as individuals with criminal records.
The bond is put into effect instantly on the first day of employment. The employer then makes the applicant a job offer and sets a date for the individual to start working. There are no forms or other papers for the employer to sign, and no processing to delay matters.
Federal Tax Exempt Program
- Two incentives for hiring targeted workers:
- May qualify for federal tax credits up to $9,000.00
- State tax refund up to $2,000.00 per employee
- Nine targeted groups — one of which is qualified ex-offenders, defined as an ex-felon who has been convicted of a felony under any federal or state law, and is hired not more than one year after the conviction or release from prison for that felony.
- Documentation needed-proof of felony conviction and/or felony release dates. These documents may be obtained from correctional institution records, court records, etc.
- To apply for WOTC, employers must complete:
IRS Form 8850 with original signatures from:
- Applicant/employee and
- ETA Form 9061 individual characteristics (icf).
- Documents attached to demonstrate eligibility, or
- ETA Form 9062 conditional certification from TWC or an authorized participating agency.
NOTE: The 8850 must be postmarked within 28 days of the applicant’s start date.
- To apply for state tax refund employers must complete:
- Form TWC 1098 original signatures required by employee, employer, or consultant.
- Power of Attorney. In cases where an employer uses a third-party consultant, a power of attorney must be on file with TWC.
NOTE: Filing dates are January 1-March 31 of the year after the wages were earned.
For additional information, call the WOTC Unit at 1-800-695-6879.