Surety Bond Encyclopedia

Wage and Fringe Benefit Bond - Chicago and Northeast Illinois District Council of Carpenters in Illinois

Brief Summary

Signing with the Chicago carpenters' council means the union and its funds want security before your carpenters go to work. This bond is that security. You pay a premium instead of posting cash, the bond is written in the exact name on your signed agreement, and it goes straight to the council office with no court or state filing involved.

The Wage and Fringe Benefit bond is posted by contractors signed to the collective bargaining agreement of the Chicago and Northeast Illinois District Council of Carpenters, the council now known as the Mid-America Carpenters Regional Council. It guarantees the union that the contractor will pay its carpenters' wages and its contributions to the carpenters' welfare, pension and apprentice funds. It is a union requirement, not a state license bond.

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How to Apply for a Wage and Fringe Benefit Bond:

Sign the carpenters' collective bargaining agreement with the council or confirm the agreement your company is bound by.
Get the required bond amount and any bond form from the council office.
Confirm whether the obligee should read Mid-America Carpenters Regional Council or a predecessor name.
Provide the legal company name exactly as it appears on the signed agreement.
Give the owner's name, home address and Social Security number for the credit review.
Pay the premium and deliver the executed original bond to the council.

Detailed Information About the Illinois Wage and Fringe Benefit Bond:

Who the obligee is today

The Chicago and Northeast Illinois District Council of Carpenters is the Chicago carpenters' council that also appears in federal labor filings as the Chicago Regional Council of Carpenters. In October 2021, after merging with the St. Louis-Kansas City Carpenters Regional Council, it became the Mid-America Carpenters Regional Council, with a jurisdiction covering Illinois, Missouri, Kansas and eastern Iowa. Contractors holding older agreements or older bond forms may still see the former name. Confirm with the council which name belongs on a new bond before it is issued.

What the bond guarantees

This is the council's wage and welfare bond. The Seventh Circuit described one of these bonds in Chicago District Council of Carpenters Health & Welfare Fund v. Alan Scott Company, 597 F.2d 1103 (1979): the surety was obligated to pay to the union any wages, welfare fund contributions, pension fund contributions or apprentice program contributions the contractor left unpaid. The court also held that the bond protects the union as obligee. It is not insurance for the contractor, and the contractor's other creditors cannot reach it.

Why it is required up front

ERISA, 29 U.S.C. 1145, requires every employer obligated to contribute to a multiemployer plan under a collectively bargained agreement to make those contributions on the agreement's terms. When a contractor falls behind, 29 U.S.C. 1132(g)(2) directs the court to award the unpaid contributions, interest, liquidated damages and attorney fees to the fund. The council has pursued contractors for unpaid fringe benefits, and a judgment is only as good as the contractor's ability to pay. The bond gives the carpenters and their funds a surety to collect from regardless.

Bond amount

This listing does not carry a single statewide figure because the amount is set by the council under its agreement with your company, not by statute. Ask the council for the required amount and its bond form, then bring both to the application.

How premium is set

The surety prices the bond on the owner's personal credit, the company's financial condition and its history of paying wages and fund contributions on time. A larger required amount or a record of late contributions can lead the surety to ask for financial statements.

Eligibility and Requirements for a Illinois Wage and Fringe Benefit Bond:

Bond amount set by the council under the collective bargaining agreement.
The carpenters' council named as obligee, in the exact wording the council gives you.
Coverage for unpaid wages and for welfare, pension and apprentice fund contributions.
Company name matching the signed agreement exactly.
Continuous coverage for as long as the company employs carpenters under the agreement.
Owner credit review, with financial statements if the surety asks for them.

Illinois Wage and Fringe Benefit Bond FAQs:

Is this a state of Illinois bond?

No. The obligee is the carpenters' council, not a state agency. The requirement comes from your collective bargaining agreement, and the bond is delivered to the council rather than filed with the state.

The council has a new name. Which name goes on the bond?

The Chicago and Northeast Illinois District Council of Carpenters, later known as the Chicago Regional Council of Carpenters, became the Mid-America Carpenters Regional Council in October 2021. Ask the council which obligee name it wants on a new bond so the bond matches its records.

What does the bond pay if we fall behind?

The surety pays the union valid claims for unpaid wages and unpaid welfare, pension and apprentice fund contributions, up to the bond amount. Your company then owes the surety every dollar it paid.

How much is the bond?

The council sets the amount under its agreement with your company. Get the figure from the council office before you apply so the bond is written for the right amount the first time.