New Bonding Requirements

heat-frost-insulators-allied-workers-logoBonding requirements for pension trusts changed January 1 for all WICA contractors. This change came about when one of the larger employers in the Western States Conference filed bankruptcy while still owing a substantial amount to the Western States Insulation and Allied Workers’ Pension Trust. Trustees decided that after many years of static bonding requirements, updating them would avoid needing the Trust to ‘make whole’ any potential future deficits again.

The Trust also decided to strengthen enforcement of the bonding requirements, making repercussions of non-compliance severe.

Bonding Amounts

The Trustees feel that a graduated scale, based on the number of employees, is the most appropriate approach.

New

  • Employers who work in multiple areas are allowed to obtain one (1) bond, covering the aggregate sum of all their employees throughout the Western State Conference.
  • A new tier was added for employers of less than three employees.
    • However, if those smaller employees opt out of carrying a bond, his/her employees are subject to immediate withdrawal from the Trust if the employer fails to make contributions.

Enforcement

A bond must still be provided within 30 days of notification, with a penalty of $100.

  • The Trust fund may not accept an employer’s contributions until the bond is in place and delivered to the Trust Fund Office.
  • Once the trust stops accepting contributions, the local union business manager is obligated to withdraw manpower.

Next Step

The local union managers from across the conference will meet in March 2017 to discuss a uniform procedure toward delinquent employers.

One example of a procedure comes from the Insulators and Asbestos Workers Local 16 in San Francisco, California:

  1. The Allied Workers’ Pension Trust notifies the local union business manager of a non-compliant contractor employer.
  2. The local business manager sends a letter the employer outlining the issue and requesting compliance within 10 days of the date of the letter. Union employees of that employer are also notified of the issue.
  3. If the employer fails to comply or take appropriate actions to come into compliance after 10 days:
    1. A letter is sent to all known customers of the employer, notifying them that manpower will be withdrawn 10 days from the date of the letter
    2. The letter also offers the customer a list of other signatory contractors that could replace the delinquent employer to avoid jobsite disruption
    3. Union employees are given the date when they are required to leave the jobsite.
  4. If the employer still fails to comply, or take appropriate actions to come into compliance:
    1. Manpower is withdrawn.
    2. The matter is turned over to Legal Council.

Changes go into effect today (January 1, 2017).

 

BONDING AMOUNTS

Number of Employees Bonding Dollar Amounts
0-2 Bonding not required*
3-10 $30,000
11-20 $60,000
21-50 $90,000
51+ $250,000
Out of Conference $250,000
Out of State/Out of Country $500,000

 

* Employees opt out of carrying a bond, his/her employees are subject to immediate withdrawal from the Trust if the employer fails to make contributions.

 

 

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