North Carolina Private Personnel Service Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a North Carolina Private Personnel Service bond
At a Glance:
- Lowest Cost: $100 per year or $10 per month, based on the applicant’s credit history
- Bond Amount: $10,000
- Who Needs it: All private personnel service businesses operating in North Carolina
- Purpose: To ensure the public will receive compensation for any damages if the business violates licensing law
- Who Regulates Private Personnel Service Businesses in North Carolina: The North Carolina Department of Labor
Background
North Carolina statute 95-47.2 requires all private personnel service businesses operating in the state to obtain a license with the Department of Labor. The North Carolina legislature enacted the licensing requirement to ensure that these businesses act ethically. To provide financial security for the enforcement of the licensing law, private personnel services businesses must purchase and maintain a $10,000 surety bond to be eligible for licensure.
What is the Purpose of the North Carolina Private Personnel Service Bond?
North Carolina requires private personnel service businesses to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the business fails to comply with the regulations set forth in North Carolina Statute 95-47.2. Specifically, the bond protects the public in the event the business fails to pay all refunds owed to applicants. In short, the bond is a type of insurance that protects the public if the private personnel service business breaks licensing laws.
How Can an Insurance Agent Obtain a North Carolina Private Personnel Service Surety Bond?
BondExchange makes obtaining a North Carolina Private Personnel Service bond easy. Simply login to your account and use our keyword search to find the “private” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the North Carolina Private Personnel Service Bond?
Surety companies will run a credit check on the owners of the business to determine eligibility and pricing for the North Carolina Private Personnel Service bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the North Carolina Private Personnel Service Bond Cost?
The North Carolina Private Personnel Service bond can cost anywhere between $100 to $700 per year or $10 to $70 per month. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on the $10,000 bond requirement.
$10,000 Private Personnel Service Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 625+ | $100 | $10 |
| 624 – 600 | $250 | $25 |
| 575 – 599 | $300 | $30 |
| 550 – 574 | $500 | $50 |
| 500 – 549 | $700 | $70 |
Who is Required to Purchase the Bond?
North Carolina requires all private personnel service businesses to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase North Carolina statute 95-47.1, a private personnel service is a business entity that helps paying applicants find jobs. Exemptions to this definition include:
- All educational, religious, charitable, fraternal, or benevolent organizations that do not charge a fee for helping individuals secure employment
- Government operated employment services
- Temporary help services
- Newspaper and other similar media outlets
- Employment offices that do not charge fees
- Employer fee paid personnel consulting services
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do North Carolina Private Personnel Services Businesses Apply for a License?
Private personnel services businesses in North Carolina must navigate several steps to secure a license. Below are the general guidelines, but applicants should refer to the application checklist for details on the process.
License Period – All North Carolina Private Personnel Service Business Licenses are valid for one year from the date of issuance and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Private personnel services businesses must purchase and maintain a $10,000 surety bond
Step 2 – Obtain Approval for the Company’s Name
Private personnel service businesses must have their company’s name approved by the Wage and Hour Bureau, who can be reached at (800) 625-2267
Step 3 – Complete the Application
All North Carolina Private Personnel Service Business License applications should be mailed to the following address:
Wage & Hour Bureau
1101 Mail Service Center
Raleigh, NC 27699-1101
Private personnel service businesses must complete the application in its entirety, and submit the following items:
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- Copy of the applicant’s fee schedule and refund policy
- Company formation documents
- Emplyoment history for five years preceding the application date
- Authorization for the appropriate officer to sign documents on behalf of the company
- Copies of draft contracts and forms used with applicants
Applicants must pay a $500 processing fee when submitting their application.
How do North Carolina Private Personnel Services Businesses Renew Their Licenses?
Private personnel services businesses should mail their completed renewal applications to the following address:
Wage & Hour Bureau
1101 Mail Service Center
Raleigh, NC 27699-1101
All North Carolina Private Personnel Service Business Licenses are valid for one year from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for Private Personnel Service Businesses in North Carolina?
North Carolina does not require private personnel service businesses to purchase any form of liability insurance as a prerequisite to obtaining a business license. Private personnel services businesses must purchase and maintain a $10,000 surety bond.
How Do North Carolina Private Personnel Service Businesses File Their Bonds?
Private personnel service businesses should mail their completed bond forms, including the power of attorney, to the following address:
Wage & Hour Bureau
1101 Mail Service Center
Raleigh, NC 27699-1101
The surety bond requires signatures from both the surety company that issues the bond and from a representative of the business. The surety company should include the following information on the bond form:
- Legal name and address of the entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond goes into effect
What Can North Carolina Private Personnel Service Businesses do to Avoid Claims Against Their Bonds?
To avoid claims against their bonds, private personnel services businesses in North Carolina must ensure that they refund all applicants for services that have been paid for but not received.
What Other Insurance Products Can Agents Offer Private Personnel Service Businesses in North Carolina?
North Carolina does not require private personnel service businesses to purchase liability insurance as a prerequisite to obtaining a business license. However most reputable businesses will purchase this insurance anyway. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for North Carolina Private Personnel Service Business Customers?
North Carolina unfortunately does not provide a public database of active private personnel service businesses in the state. Wes suggest contacting the Department of Labor directly to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.