Surety Bond Encyclopedia

Wage Welfare Bond - IBEW Local No. 520 in Texas

Brief Summary

This bond backs the wages and benefit contributions a contractor owes its electricians under an IBEW Local 520 agreement. You pay a premium, a surety stands behind the obligation, and your working capital stays on your Central Texas jobs.

The IBEW Local No. 520 Wage Welfare bond guarantees that a contractor working under a Local 520 agreement pays its electricians' wages and the welfare and other fringe contributions the agreement calls for. The obligee is the union side of that agreement, not a Texas state agency, so the amount and bond form come from Local 520 and its benefit fund office. Local 520 covers Austin and a large part of Central Texas.

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How to Apply for a Wage Welfare Bond:

Get the required bond amount and obligee wording from IBEW Local 520 or its benefit fund office.
Ask whether the local or the funds supply their own bond form, and request a copy.
Have the legal business name exactly as it appears on the signed agreement or letter of assent.
Complete the bond application with owner details for the credit review.
Pay the premium and receive the executed bond.
Deliver the original bond to the party Local 520 designates and keep a copy with the signed agreement.

Detailed Information About the Texas Wage Welfare Bond:

This is a union bond, not a Texas license bond

Contractors often go looking for this requirement at TDLR or another state office. This one comes from the collective bargaining agreement a contractor signs with IBEW Local 520 in Austin, and the bond protects the union and the trustees of the benefit funds that agreement feeds. Because of that, the figure to use is the one Local 520 or its fund office gives you, not a number from a state statute.

Where Local 520 work happens

Local 520's published jurisdiction covers Travis, Bastrop, Hays, Blanco, Burnet, Williamson, Lee, Llano, San Saba, Burleson, Caldwell, Fayette, Runnels, Coleman, Brown, Tom Green, Concho, McCulloch, Menard, Mason and Kimble counties, plus parts of Coryell, Bell, Lampasas and Milam counties. A shop based in Dallas or San Antonio that picks up a job in Round Rock or San Marcos is working inside that territory.

What the bond guarantees

If the contractor stops paying wages or misses benefit contributions owed under the agreement, the union or the fund trustees can claim against the bond up to its face amount. The surety then looks to the contractor to repay it.

Why the contribution side matters

Federal law makes the benefit contributions a separate legal duty. Under 29 U.S.C. 1145, every employer obligated to contribute to a multiemployer plan under a collectively bargained agreement must pay on the plan's terms. When the trustees sue to collect, 29 U.S.C. 1132(g)(2) says the court shall award the unpaid contributions, interest, the greater of a second round of interest or liquidated damages under the plan (capped at 20 percent unless federal or state law allows more), and reasonable attorney's fees and costs. The bond covers its face amount. The contractor owes the rest.

Before the bond is written

Ask Local 520 or its fund office for the current required amount, the exact obligee wording, and whether they use their own bond form. Have that in hand before the bond is issued so it is accepted the first time.

Eligibility and Requirements for a Texas Wage Welfare Bond:

Obligee named as Local 520 or the benefit fund trustees, exactly as the local specifies.
Bond amount set by the local or its funds, not by a Texas statute.
Coverage for both wages and fringe benefit contributions owed under the Local 520 agreement.
Principal name on the bond matching the signatory contractor.
Owner indemnity to the surety for any claim it pays.

Texas Wage Welfare Bond FAQs:

Which state agency do I file this bond with?

None. This bond runs to the union side of your IBEW Local 520 agreement. Local 520 or its fund office tells you the amount, the obligee wording and where the original goes.

My shop is outside Austin. Does Local 520 territory still apply to me?

It depends on where the job is. Local 520's jurisdiction map lists Travis, Williamson, Hays, Bastrop and many other Central Texas counties, plus parts of Coryell, Bell, Lampasas and Milam. Work inside those lines falls in Local 520 territory.

Does the bond limit cap what I would owe if contributions go unpaid?

No. The bond limit caps what the surety pays. Under 29 U.S.C. 1132(g)(2), a court awarding unpaid contributions to a plan also awards interest, liquidated damages or extra interest, and the plan's attorney's fees and costs. The contractor is responsible for all of it and must repay the surety for anything paid under the bond.

How is the premium set?

The surety looks at the bond amount, the owners' personal credit, and the company's financial strength and history of paying its obligations. You get a quote once the application is in.

Can I have the bond issued before I talk to the local?

It is better not to. Confirm the current amount, the obligee name and any required form with Local 520 or its fund office first, so the bond you buy is the one they accept.