Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all your West Virginia wage bond needs.
What Are They?
West Virginia requires wage bonds to ensure the payment of wages and benefits to employees working in West Virginia for companies engaged in certain industries. These include construction, mining, and transportation of minerals other than by rail or water. The bond serves as a guarantee that the employer will pay wages and benefits due to its West Virginia workers. It also provides funds that the West Virginia Division of Labor will use for that purpose if an employer fails to live up to that obligation.
Who Needs Them?
There are several exceptions, but in general, a construction, mining, or mineral transportation company will need to purchase a West Virginia wage bond if:
- It has had employees physically working in West Virginia for less than one year and has not been doing business in another state for at least five years.
- It is not a subsidiary of a company that has been in operation for five years or more.
- Its only business does not involve building single-family residential or family farming structures
- It has less than $100,000 in available assets.
The required bond amount, the bond’s “penal sum,” is determined by the Division of Labor based on four weeks of its gross West Virginia payroll at maximum capacity (with certain exemptions), plus an additional 15% of that amount.
After one year with no claims against it, a West Virginia wage bond is no longer required.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
The contractual basis for a West Virginia wage bond is a surety bond agreement that brings together these three parties:
- The obligee requiring the bond—the West Virginia Division of Labor.
- The principal purchasing the bond—the owner of the construction, mining, or mineral transportation company.
- The surety—the bonding company underwriting and approving the West Virginia wage bond.
If the principal fails to pay wages and benefits to its employees working in West Virginia, the obligee will make a claim against the bond and use it to make those payments. The surety bond form submitted to the Division of Labor authorizes the Division, as the bond’s obligee, to use the bond to pay wages and benefits if necessary.
Typically, the surety will pay the Division directly and then collect reimbursement from the principal. It’s the principal’s legal obligation, not the surety’s, to pay all valid claims against a West Virginia wage bond.
What Do They Cost?
West Virginia wage bonds are subject to underwriting. The surety will assign a premium rate based on such factors as the principal’s creditworthiness, financial strength, and industry experience. A well-qualified principal will pay a premium rate in the range of 1-3% of the bond’s penal sum.
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Our surety bond professionals will get you the West Virginia wage bond you need at a competitive rate.