Federal bonding letter

The use of bonding insurance by employers has become more common with the level of crime and ex-offenders rising. Bonding insurance for the ex-offender can be a problem as two issues arise:

  • The employer is unwilling to hire you because of your criminal history
  • The insurance companies are unwilling to insure against you because of your criminal history

In 1966, the U.S. Department of Labor created the Federal Bonding Program as an incentive for employers to hire ex-offenders and guaranty the job honesty of at-risk job applicants. The use of bonding insurance is free for employers who apply. There is also a state employment bonding insurance for the ex-offender.

Fidelity Bonding

The use of bonding insurance covers a range of issues but has some limitations. These conditions are listed as follows:

  • Insurance to protect employer against employee dishonesty
  • Covers any type of stealing: theft, forgery, larceny, and embezzlement
  • In effect, a guarantee of worker job honesty
  • An incentive to the employer to hire an at-risk job applicant
  • A unique tool for marketing applicants to employers
  • DOES NOT cover 'liability' due to poor workmanship, job injuries, work accidents, etc.
  • Is NOT a bail bond or court bond needed in adjudication
  • Is NOT a bond needed for self-employment (contract bond, license bond or performance bond)


Bonding insurance for the ex-offender can also be used as bonding insurance for other at-risk persons as well. In most cases, the groups overlap in their eligibility.

  • Ex-offenders or anyone with a record of arrest, conviction or a police record.
  • Recovering substance abusers. People rehabilitated for alcohol or drug abuse.
  • People with poor credit record or have declared bankruptcy.
  • Individuals dishonorably discharged from military service.
  • People lacking a work history who are from families with low income.


There are restrictions when using bonding insurance. Here are the most common:

  • The worker must meet the state's legal working age. There are no age limits.
  • Workers must be paid with federal taxes deducted from their pay. Self-employed individuals cannot be covered.
  • The bond is issued to cover workers who obtain permanent jobs providing at least 30 hours per week. Exceptions can be made to accommodate the employer's needs.

The Process

The process for bonding insurance with the ex-offender is simple and requires only three steps to be utilized.

  • A job offer is made.
  • The employer sends a letter to the Department of Labor Bonding Coordinator that confirms the offer of employment, job title, work location and start date (See PDF sample letter below).
  • The bond is issued and is effective on the employee's first day of work.

Having bonding insurance for the ex-offender is most often the one confirmation for an employer that you will not become a liability for their other insurance and greatly aids, along with the Work Opportunity Tax Credit in your gaining employability.