California LLC Employee Worker Bond

The California LLC employee/worker bond is a surety bond that is required by the California Contractor State Licensing Board (CSLB) for all licensed contractors that are registered as LLCs. Starting in 2026, all California contractors are required to have an LLC bond in place, in addition to their pre-existing contractor license bond. The bond is designed to protect employees from LLC employers who do not pay their wages, workers' compensation benefits, or other benefits that are owed to their employees on time. This bond is required for all LLC contractors in California that have employees, and it must be renewed annually.

The purpose of the California LLC employee/worker bond is to provide a safety net for employees who may not receive payment for work rendered or may have their other benefits withheld. The bond ensures that there is a financial guarantee that employees will be paid the wages they are owed. The bond also guarantees that any claims against the employer for unpaid wages or other benefits will be paid, up to the bond's limit.

Sample Payment and Performance Bond Form
CA LLC Bond Form
CA LLC Employee Worker Bond

Required By: California Contractor State Licensing Board (CSLB)

Bond Amount: $100,000

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How much does a CA LLC employee worker bond cost?

The pricing for a surety bond depends on the bond amount, the maximum payout the surety company can provide, and the premium, a percentage rate calculated by surety underwriters. Multiplying the bond amount and the premium together gives the price of the bond for an LLC employer or any other bond seeker.

The California LLC worker bond amount is for $100,000, which is in addition to the $25,000 contractor licensing bond.

LLC employee/worker Bonds cost between $1,500 and $10,000 depending on the personal credit, license history, license classification, personal financial reports, and business financial reports of either the LLC members or the LLC itself.  

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How to obtain a LLC workers bond in California

1. Determine the amount of the bond

The California Contractors State License Board (CSLB) requires that construction LLC companies have a contractor’s bond in place to obtain and maintain a valid license. Determining the bond amount for the LLC employee/worker bond in California is easy—all contractor’s LLC bond amounts are set at $100,000.

2. Find a reputable surety bonding company

The next crucial step is for the construction LLC company to find a reputable surety bonding broker, who will then issue them a bond through one of their partnered surety companies. It is advisable to research the various bonding companies in California and compare their quotes on the rates offered and the quality of their services. SuretyNow is a surety broker that offers price matching guarantees, quick response times, and is licensed and experienced in the state of California in issuing bonds in the contractor industry.

3. Fill out the bond application

Once a reliable bonding company has been identified, the construction LLC company will need to fill out a bond application form. The form usually requires basic information like the company’s name, address, and contact details, as well as details of the requested bond amount. Your social security number is required and the credit score is the most important factor in determining your price.

4. Provide the necessary documents (Optional)

Besides filling out the bond application form, the construction LLC company may also be required to provide additional documents to the bonding company. These documents may include a copy of the company’s business license, as well as documentation proving that all state and federal taxes are paid up to date.

5. Wait for bond approval

After all required documents and information have been submitted, the bonding company will evaluate the application. The construction LLC company should be prepared to wait some time for bond approval. The surety will have to underwrite the application and review the bondseeker’s creditworthiness before approving the bond. One important thing to note is that the surety will have to perform a credit check according to California law; however, this credit check will be a “soft hit,” meaning it will not affect the contractor’s credit. Once approved, the bonding company will send the bond to the construction LLC company.

6. Pay the bond premium

Now, the construction LLC company must pay the bond premium. The premium is typically a percentage of the bond amount requested, and it varies depending on the bonding company used; we’ve outlined the typical premium rates for the California LLC bond above. Once the premium has been paid, the bonding company will issue a bond certificate to the construction LLC company.

7. File the bond certificate with the California Contractors State License Board

The final step is for the construction LLC company to file the bond certificate with the California Contractors State License Board. This action ensures that the construction LLC company adheres to the CSLB licensing requirements and maintains in good standing.

Benefits to acquiring an LLC workers bond

Benefits for the employer

Not only is securing worker bonds a legal requirement for LLCs in California, but it can also affect the company's insurance premiums. Insurance providers typically view bonded employees as a lower risk, which can result in reduced insurance costs. Additionally, LLCs should ensure that their worker bonds are obtained from reputable surety companies and that they are properly maintained to avoid any lapses in coverage.

Benefits for the employee

The California Employees Worker Bond provides several benefits to employees. Firstly, it ensures that employees receive the wages and benefits they are owed. If an employer fails to pay their employees, the bond can be used to make up for these unpaid wages. Secondly, the bond provides a legal remedy for employees who have not received the benefits they are entitled to. The bond can be used to cover any legal expenses incurred in pursuing a claim against the employer.

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