Federal Bonding Program – Free Fidelity Bonds for Hard-to-Place Job Seekers
Free fidelity bonds (insurance policies) that protect employers against employee theft, fraud, or dishonesty for hard-to-place job seekers including people with criminal records, individuals in recovery from substance abuse, welfare recipients, and others who face barriers to employment. Bonds eliminate a major hiring barrier by removing employer risk at no cost to the job seeker or employer.
A Second Chance at Employment: The Federal Bonding Program
Getting a job after prison is one of the hardest challenges in America. Over 70 million Americans—nearly one in three adults—have some form of criminal record, and for many of them, that record is an insurmountable barrier to employment. Employers are reluctant to hire people with criminal histories, citing concerns about theft, liability, and the inability to obtain commercial fidelity bonds (insurance policies that protect against employee dishonesty). This reluctance creates a cruel cycle: without employment, formerly incarcerated individuals cannot support themselves or their families, cannot pay restitution, and are far more likely to reoffend—with recidivism rates exceeding 75% within five years for those who cannot find stable work.
The Federal Bonding Program breaks this cycle by providing free fidelity bonds to employers who hire hard-to-place job seekers. These bonds—issued at no cost to either the employer or the job seeker—cover the first six months of employment and protect the employer against employee dishonesty including theft, forgery, larceny, and embezzlement. By removing the financial risk associated with hiring someone with a troubled background, the program eliminates one of the most significant practical barriers to employment for millions of Americans.
Created in 1966 by the U.S. Department of Labor, the Federal Bonding Program has helped hundreds of thousands of individuals secure employment. The program boasts a remarkable track record: less than 1% of bonded employees have had a claim filed against their bond—meaning that 99% of these “risky” hires turned out to be trustworthy, reliable employees. This statistic demolishes the stereotype that people with criminal records are bad employment risks and demonstrates that with opportunity, most people succeed.
Opportunity Snapshot
| Detail | Information |
|---|---|
| Program Type | Free employer fidelity bonds for hard-to-place job seekers |
| Who It Serves | People with criminal records, substance abuse history, poor credit, and other employment barriers |
| Cost | Completely free (to both job seeker and employer) |
| Bond Coverage | $5,000 to $25,000 |
| Duration | First 6 months of employment |
| Coverage Type | Employee dishonesty (theft, forgery, larceny, embezzlement) |
| Claim Rate | Less than 1% |
| Access Points | American Job Centers in all 50 states and DC |
| Federal Authority | Workforce Innovation and Opportunity Act (WIOA) |
| Administered By | U.S. Department of Labor, Employment and Training Administration |
How the Federal Bonding Program Works
What Is a Fidelity Bond?
A fidelity bond is an insurance policy that reimburses an employer for losses caused by dishonest acts of an employee—specifically theft, forgery, larceny, and embezzlement. Many employers require fidelity bond coverage as a condition of employment, particularly for positions that involve handling money, merchandise, valuable property, or sensitive information. Positions in retail, banking, warehousing, healthcare, food service, construction, and many other industries routinely require bondability.
For most employees, obtaining a fidelity bond is seamless—the employer purchases a blanket bond that covers all employees. But individuals with criminal records, substance abuse histories, or poor credit are typically excluded from these blanket bonds by commercial insurance companies, which consider them “unbondable” risks. This exclusion effectively bars millions of Americans from jobs they are otherwise qualified to perform.
The Federal Bonding Program steps in by providing individual fidelity bonds for these “unbondable” individuals—at no cost to anyone. The bond is issued to the employer, covers the individual employee for the first six months of work, and is backed by the full faith and credit of the U.S. Department of Labor.
Getting a Bond
The process for obtaining a Federal Bond is straightforward:
Step 1: The job seeker identifies a job opportunity. The bond can be requested at any point during the hiring process—from the application stage through the first day of work.
Step 2: The job seeker (or their employment counselor, parole officer, case manager, or attorney) contacts their state’s Federal Bonding Coordinator, typically located within the state workforce agency, or visits an American Job Center (formerly known as One-Stop Career Centers).
Step 3: The bonding coordinator verifies the job seeker’s eligibility and issues the bond. The process can often be completed within 24 to 48 hours—fast enough to prevent a job offer from expiring.
Step 4: The bond is delivered to the employer, who is now protected against employee dishonesty for the first six months at no cost.
Step 5: After six months of successful employment, the employer can purchase a continuation bond through a commercial insurer—often at standard rates, since the employee has now demonstrated six months of reliable performance.
Bond Coverage Details
Federal Bonds provide coverage ranging from $5,000 to $25,000, depending on the position and the employer’s needs. The standard bond amount is $5,000, which is adequate for most entry-level positions. Higher amounts are available for positions involving greater financial responsibility. The bond covers acts of employee dishonesty including theft of money or property, forgery, larceny, and embezzlement. The bond does not cover job performance issues, work quality, attendance, or non-dishonesty-related misconduct.
The bond takes effect on the employee’s first day of work (or the day the bond is issued, if later) and remains in force for six months. There is no deductible—the employer receives full reimbursement up to the bond amount for any covered loss.
Who Qualifies
The Federal Bonding Program serves a broad range of individuals who face barriers to employment due to their backgrounds:
People with criminal records: This is the largest group served by the program. Anyone with an arrest record, conviction, or incarceration history who is having difficulty obtaining employment due to their criminal background is eligible. This includes people who are currently on probation or parole, people who have completed their sentences, and people whose charges were dismissed or who were acquitted but whose arrest record still creates employment barriers.
Individuals in substance abuse recovery: People who are recovering from drug addiction or alcohol dependency and who face employment barriers as a result are eligible. This includes people in medication-assisted treatment (MAT), people who have completed residential or outpatient treatment, and people in long-term recovery.
Welfare recipients: People who are receiving or transitioning from public assistance programs (TANF, SNAP, etc.) and who are entering or re-entering the workforce are eligible for federal bonds.
People with poor credit history: Individuals who cannot obtain commercial fidelity bonds due to poor credit scores, bankruptcy, or financial history are eligible.
People lacking work history: Economically disadvantaged youth and adults who have never held a job and whose lack of work history makes employers reluctant to hire them.
Dishonorably discharged veterans: Military members who received dishonorable discharges and face employment barriers as a result.
Any “at-risk” job applicant: Broadly, any individual whose personal background leads an employer to question their suitability for a bond—and whose job offer depends on obtaining bond coverage—may qualify.
The Impact of Employment Barriers
Understanding the Federal Bonding Program requires understanding the devastating impact of employment barriers on individuals and communities.
For people with criminal records, the statistics are grim. Over 600,000 people are released from federal and state prisons each year—and millions more cycle through local jails. Research consistently shows that stable employment is the single most important factor in preventing recidivism: formerly incarcerated individuals who obtain steady employment within the first year of release are significantly less likely to reoffend. Yet criminal background checks—now conducted by over 90% of employers—screen out millions of qualified applicants.
The economic costs of excluding people with criminal records from the workforce are enormous. The Brennan Center for Justice estimates that the annual cost of excluding people with criminal records from the labor force exceeds $87 billion in lost GDP. This doesn’t account for the additional costs of incarceration, public assistance, homelessness, and healthcare that result when people cannot support themselves through legitimate work.
The Federal Bonding Program addresses a specific, practical piece of this puzzle—the bonding requirement that many employers use as a gatekeeping mechanism. By removing this barrier, the program opens doors that would otherwise remain closed.
Success Stories and Program Outcomes
The Federal Bonding Program’s track record speaks for itself. The program reports that less than 1% of bonded individuals have had a claim filed against their bond. This means that 99% of the people deemed “too risky” for commercial bonding proved to be honest, reliable employees. In fact, research suggests that formerly incarcerated individuals who obtain employment through programs like Federal Bonding are often among the most motivated and loyal employees, precisely because they know how precious the opportunity is.
Bonded individuals have gone on to successful careers in industries including healthcare, financial services, technology, transportation, manufacturing, retail, hospitality, and many others. Some have started their own businesses. Some have become managers and executives. The bond provided the bridge—the first six months of verified reliability that proved to employers and the commercial bonding market that these individuals deserved a chance.
Frequently Asked Questions
Does the employer know the person has a criminal record? The Federal Bond does not specify the reason for the bond. An employer who requests a bond simply receives confirmation that the employee is bonded. However, in practice, the need for a federal bond often arises because the employer has already conducted a background check and knows about the applicant’s history.
Can the bond be used for self-employment? No. The Federal Bonding Program provides employer fidelity bonds. Self-employed individuals would need to explore other bonding options.
What happens after the 6-month bond expires? After six months of claim-free employment, the individual can typically obtain a commercial fidelity bond at standard rates. The six months of bonded employment provides a track record that commercial insurers can underwrite.
Can a person be bonded more than once? Yes. If a bonded individual changes jobs, a new bond can be issued for the new position. There is no limit on the number of times a person can be bonded.
Is there a waiting period after release from prison? No. Individuals can be bonded as soon as they have a job offer, even if they were released from prison the same day.
Does the bond cover all types of jobs? The bond covers most job types, though there may be limitations for certain positions. Contact your state’s Federal Bonding Coordinator for specifics.
Can the employer request a bond? Yes. Either the job seeker or the employer can initiate the bonding request, though the bond is issued for the benefit of the employer.
How to Get Started
- Visit bonds4jobs.com for program information and state coordinator contacts
- Contact your American Job Center (find one at careeronestop.org)
- Ask your parole/probation officer about the Federal Bonding Program
- Contact your state workforce agency and ask for the Federal Bonding Coordinator
- Ask your reentry services provider or case manager about bonding
- Call 1-877-US2-JOBS (1-877-872-5627) for workforce services referrals
Everyone deserves a chance to earn an honest living. The Federal Bonding Program ensures that a past mistake doesn’t become a permanent barrier to employment. If you’re ready to work, this program is ready to help you prove it.