Surety Bond Encyclopedia

Wage & Fringe Benefits ($55,000) Bond - Local 20 Sheet Metal Workers International Association in Indiana

Brief Summary

If you are signing with SMART Local 20, the $55,000 wage and fringe benefit bond is usually the last item before your crews can be dispatched. You pay a yearly premium instead of tying up $55,000 in cash with the union, and the bond is written in the exact name on your signed agreement so the Local 20 office can accept it without a second round of paperwork.

The Local 20 Wage & Fringe Benefits bond is a $55,000 surety bond posted by sheet metal contractors that employ members of SMART Local 20, formerly the Sheet Metal Workers International Association Local 20, anywhere in its Indiana territory. It guarantees that the contractor will pay the wages owed to its Local 20 workers and the contributions owed to the Local 20 benefit funds under the collective bargaining agreement.

We can help with all Indiana bonds!

How to Apply for a Wage & Fringe Benefits ($55,000) Bond:

Sign the SMART Local 20 collective bargaining agreement or confirm the agreement your company is bound by.
Confirm with the Local 20 office that $55,000 is the amount it requires of your company and ask for its bond form, if it uses one.
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 receive the executed $55,000 bond.
Deliver the original bond to the Local 20 office in Indianapolis and keep a copy with your payroll and fund remittance records.

Detailed Information About the Indiana Wage & Fringe Benefits ($55,000) Bond:

Who posts this bond

SMART Local 20 represents sheet metal workers across Indiana from its main office at 2828 East 45th Street in Indianapolis, with service areas in Evansville, Fort Wayne, Gary, Indianapolis, Lafayette, South Bend and Terre Haute. A contractor that signs the Local 20 collective bargaining agreement takes on two money obligations every pay period. It owes wages to the workers, and it owes hourly contributions to the benefit funds, including the Sheet Metal Workers Local No. 20 Welfare and Benefit Fund. This bond backs both obligations up to $55,000.

The bond follows the contractor, not the job. It stays in force for as long as the contractor employs Local 20 members, whether the work is in Gary or Evansville, public or private.

Why the funds ask for security

Federal law already requires the payments. 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 on the agreement's terms. When a contractor falls behind, the trustees can sue, and 29 U.S.C. 1132(g)(2) directs the court to award the unpaid contributions, interest, liquidated damages and attorney fees. The trustees of the Local No. 20 Welfare and Benefit Fund have done exactly that in federal court in Indianapolis.

A lawsuit is slow and a judgment is only worth what the contractor can pay. The bond gives the workers and the funds a solvent surety to collect from if a contractor closes its doors or stops remitting. That is why it is posted up front, before members go to work.

This is not a payment bond

A public works payment bond protects everyone who supplies labor and material on one project and is filed with the public owner. This bond protects Local 20 members and their funds on all of your work under the agreement. Having one does not satisfy the other.

How premium is set

The surety prices this bond on the owner's personal credit, the company's financial condition and its record of paying wages and fund contributions on time. A contractor with a history of delinquent contributions will pay more or may be asked for financial statements. Because the surety is guaranteeing payroll money, confirm the current bond form and where to deliver it with the Local 20 office before the bond is issued.

Eligibility and Requirements for a Indiana Wage & Fringe Benefits ($55,000) Bond:

Bond amount of $55,000.
SMART Local 20 and its benefit funds named as obligee, in the wording the union specifies.
Company name on the bond matching the signed collective bargaining agreement exactly.
Coverage for both wages owed to members and contributions owed to the Local 20 benefit funds.
Continuous coverage for as long as the company employs Local 20 members.
Owner credit review, with financial statements if the surety asks for them.

Indiana Wage & Fringe Benefits ($55,000) Bond FAQs:

What does the bond actually pay for?

If your company fails to pay wages to its Local 20 workers or fails to remit the hourly contributions owed to the Local 20 benefit funds, the union or the fund trustees can make a claim against the bond. The surety pays valid claims up to $55,000 and then collects that amount back from your company.

I already have a payment bond on my public job. Does that cover this?

No. A payment bond covers one project and is filed with the public owner. The Local 20 bond covers your obligations to members and their funds on every job under the agreement, public or private.

What happens if we fall behind on fund contributions?

ERISA requires the contributions to be paid on the agreement's terms. If the trustees sue to collect, 29 U.S.C. 1132(g)(2) directs the court to award the unpaid amount plus interest, liquidated damages and attorney fees. A bond claim is paid by the surety, but your company still owes the surety every dollar it pays.

Does the bond cover work in every Local 20 area?

The bond runs to your agreement with Local 20, not to a single city. Local 20 covers Indiana through its Evansville, Fort Wayne, Gary, Indianapolis, Lafayette, South Bend and Terre Haute areas. Confirm the exact obligee wording with the Local 20 office before the bond is issued.