Illinois Union Wage and Welfare Bond

An Illinois union wage and welfare bond, also known as a fringe benefit bond, ensures employers make timely payments to union trust funds for wages and benefits under a collective bargaining agreement (CBA). These bonds protect health, pension, and welfare funds if contributions are missed. Costs typically range from 1–5% of the bond amount, depending on credit and financials. Employers can secure a bond—even with challenged credit—through a straightforward application and renewal process.

An Illinois union wage and welfare bond guarantees that employers pay required wages and fringe benefits to union workers. Often called a fringe benefit bond, it ensures contributions to health, welfare, and pension funds are made on time.

The obligee—usually the union trust fund—requires this bond as part of compliance with the CBA. If an employer fails to contribute, the bond compensates the fund for missed payments, helping protect employees’ earned benefits. This safeguard is crucial in industries where unions rely on steady contributions to maintain healthcare and pension programs.

The cost of this bond is typically 1–5% of the total bond amount. The exact price depends on factors like credit history, financial stability, and the required bond schedule based on headcount or contributions.

For example:

• A $25,000 bond could cost as little as $250 annually (1% premium).
• The same bond might cost $1,250 annually at a higher 5% premium.

Employers can review general cost details at surety bond cost. Flexible underwriting ensures pricing is transparent and competitive.

The process of getting bonded is straightforward:

1. Apply online by submitting basic company information and bond requirements.
2. Underwriting review evaluates financials, credit, and indemnity.
3. Receive approval and pricing based on risk profile.
4. Issue bond and file it with the appropriate union trust or fund office.

Most applicants can secure approval within a few business days. For reference, many unions provide official forms—such as the Chicago Laborers’ Benefit Funds Bond form—to complete after approval.

Yes. Even with challenged credit, employers can obtain a union wage and welfare bond. While standard underwriting considers financial history, Lance Surety offers flexible options to make a surety bond accessible.

Applicants may face higher premiums, but transparency ensures no hidden fees. Strong business financials, collateral, or co-signers may help secure better terms. This flexibility allows companies with less-than-perfect credit to stay compliant with union agreements and avoid costly delays.

What type of bond is a wage and welfare bond?

It is a License and Permit bond that guarantees payment of fringe benefits (health, welfare, pension) owed under a union CBA. It is not insurance, but rather a financial guarantee to protect union trust funds. 

What happens if contributions/wages are missed?

If an employer misses required contributions, the union trust fund may file a claim against the bond. Once validated, the surety pays the claim, and the employer must reimburse the surety for the payout. This ensures workers’ benefits remain funded even in cases of delinquency.. 

Who requires this bond?

Union trust funds typically require these bonds as part of CBAs. Examples include: - [IBEW Local 134 / EIT, Plumbers Local 130 UA, Iron Workers Local 498 . These funds rely on bonds to ensure steady contributions for member benefits.

How long does a Union Wage & Welfare Bond last?

Most bonds are issued for one year and require renewal to maintain compliance. Employers are typically notified by the union or surety prior to expiration. Continuous coverage ensures no lapse in benefits protection for employees..

Chicago Laborers’ Benefit Funds. (n.d.). Surety bond form.
https://www.chicagolaborersfunds.com/public/files/surety%20bond.pdf 

IBEW Local 134 / EIT. (n.d.). Employer downloads.
https://fundoffice.org/employer_downloads.html 

Iron Workers Local 498. (2023). Collective bargaining agreement 2023–2026.
https://www.iwlocal498.org/wp-content/uploads/2024/10/IW-498-CBA-2023-2026-1.pd 

Lance Surety Bonds. (n.d.). Getting bonded.
https://www.lancesuretybonds.com/surety-bond-quote 

Lance Surety Bonds. (n.d.). Illinois wage and welfare bond.
https://www.lancesuretybonds.com/bonds-by-state/illinois/wage-and-welfare-bond 

Lance Surety Bonds. (n.d.). Surety bond cost.
https://www.lancesuretybonds.com/learn/surety-bond-cost 

Lance Surety Bonds. (n.d.). What is a surety bond.
https://www.lancesuretybonds.com/learn/what-is-a-surety-bond 

Plumbers Local 130 UA. (n.d.). Bond forms. 
https://plumberslu130ua.com/bond-forms.aspx