Surety Bond Encyclopedia

Wage Welfare Bond - Architectural Iron Workers Union Local No. 63 in Illinois

Brief Summary

A contractor signing with Architectural Iron Workers Local 63 can be asked to guarantee its wage and fringe benefit payments before the first ironworker is dispatched. This bond does that. You pay a premium instead of posting a cash deposit with the union or its funds, and the bond runs to Local 63 and its benefit trusts for as long as you stay signatory.

The Wage Welfare bond is posted by an employer signatory to an Architectural Iron Workers Union Local No. 63 collective bargaining agreement in Illinois. It guarantees the employer pays the wages and the contributions it owes to the Local 63 benefit funds, including the Welfare Fund Trust of Architectural Ironworkers Local No. 63. The union and its funds set the required amount under the agreement.

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How to Apply for a Wage Welfare Bond:

Get the required bond amount and bond form from the Local 63 fund office.
Have the legal company name exactly as it appears on the signed Local 63 agreement.
Owner names, home addresses and Social Security numbers for the credit review.
Complete the bond application and review the quoted premium.
Pay the premium and sign the indemnity agreement.
Deliver the executed bond to Local 63 or its fund office as directed.

Detailed Information About the Illinois Wage Welfare Bond:

The bond protects the funds, not just the paycheck

Most contractors think of this as a wage bond. The larger exposure is usually the fringe benefit side. Every hour worked under a Local 63 agreement carries contributions to the union's benefit trusts, and the Welfare Fund Trust of Architectural Ironworkers Local No. 63 in Oak Brook, Illinois is one of them. The bond stands behind both the wages owed to the ironworkers and the contributions owed to those funds.

Why the funds can collect more than the missed contribution

Federal law makes the contribution duty enforceable. Under ERISA, 29 U.S.C. 1145, every employer obligated to contribute to a multiemployer plan under a collectively bargained agreement must make those contributions in accordance with the plan and the agreement. When a fund sues and wins, 29 U.S.C. 1132(g)(2) requires the court to award the unpaid contributions, interest, the greater of a second interest award or the plan's liquidated damages, reasonable attorney's fees and costs, and other relief the court finds appropriate. A claim on this bond can therefore reach well past the dollar amount of a single missed remittance, up to the bond's full amount.

Who posts it

The principal is the employer signed to the Local 63 agreement. Architectural Iron Workers, Local 63 is also listed as a signatory union to the City of Chicago Multi Project Labor Agreement. The bond is issued to Architectural Iron Workers Union Local No. 63 and its affiliated benefit funds as obligee.

How the amount is set

The union and its funds set the bond amount under the collective bargaining agreement and the trust documents. Confirm the required amount, the current bond form and the filing address with the Local 63 fund office before the bond is issued.

How premium is set

The surety prices the bond on the required amount, the contractor's financial statements and credit, the owners' personal credit, time as a signatory employer and any history of late or audited contributions. An indemnity agreement from the company and its owners is standard.

Eligibility and Requirements for a Illinois Wage Welfare Bond:

Architectural Iron Workers Union Local No. 63 and its benefit funds named as obligee.
Bond amount set by the union and funds under the collective bargaining agreement.
Principal name matching the signatory employer on the Local 63 agreement.
Company financial statements and owner credit for underwriting.
Bond kept in force while the employer remains signatory.

Illinois Wage Welfare Bond FAQs:

Who is the obligee on this bond?

Architectural Iron Workers Union Local No. 63 and its affiliated benefit funds, which include the Welfare Fund Trust of Architectural Ironworkers Local No. 63.

How much bond do I need?

The union and its funds set the amount under the collective bargaining agreement. Get the figure from the Local 63 fund office before you apply so the bond is issued at the right amount the first time.

What can the funds recover if contributions are late?

Under 29 U.S.C. 1132(g)(2), a fund that wins a delinquency suit is awarded the unpaid contributions, interest, the greater of additional interest or the plan's liquidated damages, and reasonable attorney's fees and costs. The bond can be called for those amounts up to its limit.

Does this bond replace workers' compensation or a performance bond?

No. It guarantees wages and benefit fund contributions owed under the Local 63 agreement. Project performance and payment bonds, and workers' compensation coverage, are separate.