South Carolina Employment Agency Bond: A Comprehensive Guide

August 26, 2022

South Carolina Employment Agency Bond

This guide provides information for insurance agents to help their customers obtain a South Carolina Employment Agency bond.

At a Glance:

  • Average Cost: $100 per year
  • Bond Amount: $3,000
  • Who Needs it: All employment agencies operating in South Carolina
  • Purpose: To ensure the public will receive compensation for financial harm if the agency engages in any acts of fraud or misrepresentation
  • Who Regulates Employment Agencies in South Carolina: The South Carolina Secretary of State

Background

South Carolina Statute 41-25-30 requires all employment agencies, also known as private personnel placement services, operating in the state to obtain a license from the Secretary of State. The South Carolina legislature enacted the licensing requirement to ensure that employment agencies engage in ethical business practices. To provide financial security for the enforcement of the licensing law, employment agencies must purchase and maintain a $3,000 surety bond to be eligible for licensure.

What is the Purpose of the South Carolina Employment Agency Bond?

South Carolina requires employment agencies 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 agency fails to abide by the regulations outlined in South Carolina Statute 41-25-30. Specifically, the bond protects the public if the agency engages in any acts of fraud or misrepresentation. In short, the bond is a type of insurance that protects the public if the agency violates the terms of its license.

South Carolina Employment Agency Bond Form

South Carolina Employment Agency Bond Form

How Can an Insurance Agent Obtain a South Carolina Employment Agency Surety Bond?

BondExchange makes obtaining a South Carolina Employment Agency bond easy. Simply login to your account and use our keyword search to find the “Employment Agency” bond in our database. Don’t have a login? Enroll 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.

Not an agent? Then let us pair you with one!

BX Agent Finder Link

Click the above image to find a BX Agent near you

Is a Credit Check Required for the South Carolina Employment Agency Bond?

No, a credit check is not required for the South Carolina Employment Agency bond. Because the bond is considered relatively low risk, the same low rate is offered to all employment agencies operating in South Carolina regardless of their credit history.

How Much Does the South Carolina Employment Agency Bond Cost?

The South Carolina Employment Agency bond costs just $100 per year.

Who is Required to Purchase the Bond?

South Carolina requires employment agencies to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase South Carolina Statute 41-25-20, an employment agency is a business that attempts to pair applicants with suitable employers.

How do Employment Agencies Apply for a License in South Carolina?

Employment agencies in South Carolina must navigate several steps to obtain a license. Below are the general guidelines, but employment agencies should refer to the Secretary of State’s licensing page for details on the process.

License Period – All South Carolina Employment Agency Licenses expire on December 31 of every other year and must be renewed before the expiration date

Step 1 – Notify the Public

Employment agencies must file an advertisement in the newspaper with the largest circulation in the county their business is located in notifying the public that they have applied for licensure. The advertisement must contain the following language:

“Please take note that [business name] has applied to the Secretary of State’s Office for a license to operate a Private Personnel Placement Service in the name of [trade name or DBA] at [physical location of business]. The agency will be operated by [director of agency].”

Step 2 – Purchase a Surety Bond

Employment agencies must purchase and maintain a $3,000 surety bond or file another form of security in the amount of $25,000.

Step 3 – Complete the Application

All South Carolina Employment Agency License applications should be mailed to the following address:

South Carolina Secretary of State
Employment Agencies
1205 Pendleton St., Ste. 525
Columbia, SC 29201

Employment agencies must complete the application in its entirety, and submit the following items:

    • $200 application fee
    • $100 licensing fee
    • Surety bond or another form of security
    • Certification by a licensed attorney verifying that all relevant legal requirements have been met

How do South Carolina Employment Agencies Renew Their Licenses?

Employment agencies should mail their completed renewal applications, including a $100 licensing fee, to the following address:

South Carolina Secretary of State
Employment Agencies
1205 Pendleton St., Ste. 525
Columbia, SC 29201

All South Carolina Employment Agency Licenses expire on December 31 of every other year and must be renewed before the expiration date.

What are the Insurance Requirements for Employment Agencies in South Carolina?

South Carolina does not require employment agencies to purchase any form of liability insurance as a prerequisite to obtaining a business license. Employment agencies must purchase and maintain a $3,000 surety bond or file another form of security in the amount of $25,000.

How do South Carolina Employment Agencies File Their Bonds?

Employment agencies should submit their completed bond forms, including the power of attorney, to the following address:

South Carolina Secretary of State
Employment Agencies
1205 Pendleton St., Ste. 525
Columbia, SC 29201

The surety bond requires signatures, including witness signatures, from both the surety company that issues the bond and from a representative of the agency. 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 and address
  • Date of the bond is signed

What Can South Carolina Employment Agencies do to Avoid Claims Made Against Their Bonds?

To avoid claims against their bonds, employment agencies in South Carolina must follow all license regulations in the state, including some of the most important issues below that tend to cause claims:

  • Do not engage in any acts of fraud or misrepresentation
  • Do not breach any contracts made with applicants or employers

What Other Insurance Products Can Agents Offer Employment Agencies in South Carolina?

Most reputable employment agencies will purchase liability insurance. 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 South Carolina Employment Agency Customers?

South Carolina provides a public database where agents can access information on every business in the state. However, agents must know the name of the business they want to search for beforehand. To obtain a list of all active employment agencies, we suggest contacting the Secretary of State. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-08-26T09:19:32-04:00