Bonds & Surety› Commercial Bonds› H-2A Labor Contractor Bond
H-2A Labor Contractor Bond
Who Needs It, How the Amount Is Set, and What It Pays
Bonds & Surety› Commercial Bonds› H-2A Labor Contractor Bond
Quick answer: If you are an H-2A labor contractor (H-2ALC), you must file a surety bond with every H-2A application for temporary labor certification. The bond is filed on Form ETA-9142A, Appendix B, it is payable to the Wage and Hour Division of the Department of Labor, and it guarantees the wages and benefits owed to your workers. The amount starts at a base of $5,000 to $75,000 depending on crew size, then the Department of Labor adjusts it for current farm wage rates.
An H-2A labor contractor is an employer that brings in H-2A workers and supplies them to work for someone else, instead of only on its own operation. That includes farm labor contractors who furnish crews to growers, nurseries and packers.
It also includes most custom combine crews. The Department of Labor's guidance says an employer that uses H-2A workers on an itinerary to provide custom combine services to fixed-site farmers is, by definition, an H-2A labor contractor. If you run a harvest crew on the circuit with H-2A workers, plan on this bond. See our page on custom harvest insurance.
The bond amount starts with a base set by the number of H-2A workers on the certification. The Department of Labor then adjusts it by the average Adverse Effect Wage Rate (AEWR): base times average AEWR, divided by $9.25.
| H-2A workers on the certification | Base amount |
|---|---|
| Fewer than 25 | $5,000 |
| 25 to 49 | $10,000 |
| 50 to 74 | $20,000 |
| 75 to 99 | $50,000 |
| 100 to 149 | $75,000 |
| 150 or more | $75,000, plus more for each added 50 workers |
For 150 or more workers, the amount goes up for each added group of 50 workers by two weeks of wages for 50 workers (80 hours x 50 workers x the average AEWR).
The base amounts and the formula are set in the regulation, 20 CFR 655.132. The Department of Labor publishes the current average AEWR used for this bond on its H-2A wage rate page. See also the DOL fact sheet on H-2A labor contractor bonds.
Because the wage rate changes, the bond amount changes too. Grit Insurance Group checks the current figure before every filing.
The bond is payable to the Administrator of the Wage and Hour Division. If the Department of Labor makes a final decision that you violated H-2A rules, the surety pays, up to the face amount of the bond, for:
A surety bond is not insurance for you. If the surety pays a claim, you owe the surety back.
The bond must stay in force for every liability incurred during the certification period, including any extension. It cannot be cancelled unless the Wage and Hour Administrator finds the labor certification has been revoked. You need a new bond with each H-2A application.
You pay a premium that is a percentage of the bond amount. The rate depends mostly on the owners' personal credit, the company's financial strength and your H-2A track record. A larger crew means a larger bond and a larger premium. Grit Insurance Group quotes each bond on your actual file.
Some sureties ask for collateral on larger bonds or for contractors new to H-2A.
Some states require their own farm labor contractor license and bond, on top of the federal H-2ALC bond. California and Oregon are two examples. Check your state's rules, or ask us.
Yes. The original bond is filed with each application for temporary labor certification.
In most cases, yes. A crew using H-2A workers on an itinerary to provide custom combine services to fixed-site farmers is an H-2A labor contractor by definition.
No. It stays in force for the full certification period, including extensions, and can only be cancelled if the certification is revoked.
Your workers. It guarantees wages and benefits owed under the H-2A rules. It does not protect your business.
It is tied to the average Adverse Effect Wage Rate, which the Department of Labor updates. When the wage rate goes up, the bond amount goes up.
Grit Insurance Group writes H-2A labor contractor bonds and the insurance program that goes with them: workers comp, commercial auto, equipment and liability. One team, one relationship. Call the Grit bond team at (801) 505-5500 or start a bond quote below.
Bond amounts and requirements are set by the Department of Labor and can change. This page is general information, not legal advice. A licensed member of our team confirms the exact amount and terms before any bond is filed.