Federal Bonding Program

Wanting to hire an applicant but not sure if you should put them in a position of trust due to a criminal background check?  (For example, a theft conviction would normally bar employment where an employee would handle cash.) There is an option with the no cost Federal Bonding Program.  A bond is provided for 6 months at no cost.  After that period there is an option to purchase a bond from Travelers Insurance. The paperwork is minimal and bonds can be put in place for up to $25,000.

Information below provided by Oregon Employment Department

The Oregon Employment Department is again participating in the Federal Bonding Program. Employers receive $5,000 fidelity bonds free of charge as an incentive to hire hard-to-place job applicants. This program, sponsored by the U.S. Department of Labor, has a 99 percent success rate nationwide, as only one percent of over 40,000 workers receiving bonds proved to be dishonest.

What is Federal Bonding?

  • A job placement tool
  • Fidelity insurance through the McLaughlin Company, an agent for Travelers Insurance Company
  • Protects employers against employee theft
  • $5,000 coverage for a 6-month period (no deductible)

Types of Workers Covered:

  • At risk job applicants denied (or potentially denied) commercial bonding due to:
  • Arrest, conviction or imprisonment
  • Alcohol or drug abuse
  • Poor credit history
  • No employment history
  • Dishonorable discharge from the military
  • Any other reason that makes the job seeker “Not Bondable”

Based on the information received, the Oregon Bonding Coordinator will decide on whether a job seeker is “Not Bondable.” The hiring company is not required to first attempt to bond the job seeker through their normal commercial bonding process.

The Bond

  • Free of charge to job seeker and employer
  • Covers theft, forgery, larceny, or embezzlement
  • Does not cover poor workmanship, injuries or accidents

Requirements for Coverage

  • Firm job offer with start date (job offer can be contingent on receiving bond)
  • Full-time or part-time job
  • Job must have an employer-employee relationship with federal taxes automatically deducted
  • Not self-employment or an independent contractor

Application Process

  • The bonds will be processed by Oregon’s Federal Bonding Coordinator, an employee of the Oregon Employment Department
  • Bonds can be requested by the job seeker, employer or a third party, e.g., job coach
  • Once the job seeker receives a firm job offer, contact the Bonding Coordinator
  • The Bonding Coordinator will ask for some basic information about the job seeker, employer and job
  • If requirements are met, the Bonding Coordinator will complete the Fidelity Bond Certification Form and mail it to the McLaughlin Company
  • The Bonding Coordinator will also send a confirmation letter to employer
  • The bond is effective the day the job seeker starts work (The start date is entered on both the certification form and the employer confirmation letter)
  • The McLaughlin Company will mail the actual Bond Certificate to the employer within 15 working days
  • Neither the employer nor job seeker need to fill out any paperwork
  • If the employee completes the initial six months of free bonding without issue, the employer may purchase a bond for the employee at the regular commercial rate.




Doug Barrett (Oregon’s Federal Bonding Coordinator)

Oregon Employment Department

875 Union St NE

Salem, OR 97311

503 947-1680

503 947-1668 Fax


More information is available at the Federal Bonding web site.