Pennsylvania Unemployment Compensation Bond

The Pennsylvania Unemployment Compensation Bond is required by the Pennsylvania Department of Labor & Industry. It is a type of surety bond that is required by employers who elect to pay their unemployment compensation contributions on a reimbursable basis. The bond ensures that the employer will pay their unemployment compensation contributions in a timely manner. The purpose of the bond is to protect the Pennsylvania Unemployment Compensation Fund from losses due to unpaid contributions. The fund is used to pay unemployment benefits to eligible workers who have lost their jobs through no fault of their own.

The bond amount is based on the employer’s wages paid during the four calendar quarters prior to the date of election of reimbursable status.

This bond does not protect the bondholder (principal). Instead it assures the state that the principal will faithfully comply with their obligations to the state. Payment on all monthly and quarterly bills must be made within 30 days. The Surety Company will be liable, up to the amount of the bond, for any unpaid bills. The bondholder will then be responsible for paying the surety back.

How to get a Pennsylvania Unemployment Compensation Bond

At Surety1.com we make it easy to obtain this surety bond. Our simple, three step process is:

1. Complete the easy to navigate and secure online application. ¹
2. Review the free, no obligation quote from one of Surety1’s professional surety bond agents, usually within one business day. ²
3. Sign some paperwork and pay the bond premium

Once these steps have been completed, the Pennsylvania Unemployment Compensation Bond will be shipped to the bond applicant. The cost of the bond is usually between 1% and 3% of the bond amount, subject to a minimum premium and fees of $150 to$250. Surety1 will shop its many markets to procure the right price at the right terms.
^{1 -The name of the applicant on the surety bond application must match exactly the full legal business name of applicant for the license.
2- Subject to underwriter approval, based on aggregate surety bond exposure, additional underwriting information may be required}

Surety1.com is a service of AssuredPartners one of the largest and fastest growing insurance agencies in the nation. Representing over a dozen surety bond companies, Surety1.com is the premier online provider of surety bonds nationwide since 2003.

What surety bond amount will I need?

The amount of the Pennsylvania Unemployment Compensation Bond (PA UC Bond) is calculated based on the employer’s total taxable wages paid to employees during the four calendar quarters prior to the date of election of reimbursable status.

Here’s the formula used to calculate the PA UC Bond amount:

Bond Amount = (Total Taxable Wages) x (Bond Percentage)

The Bond Percentage is a variable ranging from 1% to 5%, determined by the employer’s credit score and other financial factors. Factors that can influence the assignment of a specific bond percentage include:

• Payment history of the employer
• Length of time in business
• Industry of the employer
• Financial statements and overall financial health

Here’s an example of how the PA UC Bond amount is calculated:

Suppose an employer has total taxable wages of $1,000,000 during the four calendar quarters prior to the election of reimbursable status. If the employer is assigned a bond percentage of 3%, the bond amount would be calculated as follows:

Bond Amount = ($1,000,000) x (3%) = $30,000

In this case, the employer would need to purchase a PA UC Bond with a face value of $30,000 to comply with the requirement.

Here are the steps on how employers who elect to pay their unemployment compensation contributions on a reimbursable basis in Pennsylvania:

1. Submit a Form UC-1692, Election or Re-election of Reimbursement, to UCTS within 30 days of becoming subject to UC coverage, or by December 1 in subsequent years.
2. Provide a Pennsylvania Unemployment Compensation Bond.
3. Pay a nonrefundable solvency fee assessed by UCTS for the applicable calendar year. The solvency fee must be paid no later than thirty (30) days from the date on the solvency fee notice.
4. File all quarterly tax reports through the second quarter of the calendar year preceding the year of election.
5. Reimburse UCTS for the amount of benefits chargeable to their account on a dollar-for-dollar basis when a former employee files for benefits.

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