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Who Is Required To Purchase a Personnel Agency Bond In Michigan?
There are two types of personnel agencies in Michigan and each is required to be licensed.
This is essentially an employment agency bond, but Michigan calls this a personnel agency bond.
Type A agencies assists clients who want to find employment or make career decisions. Type A agencies will collect their fees directly from the client and put the client in touch with the employer.
Type B agencies assist clients to make better career decisions, similar to a career consultant. These agencies receive payment from the client for consulting services rendered.
Only Type A agencies must purchase a surety bond or provide a cash bond (i.e. cash savings bond) in the amount of $10,000.
Why is a Michigan Personnel Agent Bond Required?
Why is a Michigan Personnel Agency Bond Required?
LARA is responsible for issuing licenses to spur business growth in the state and community. At the same time they're responsible for protecting the public from agencies who might take advantage of their clients.
Examples of ways a personnel agent may take advantage of their clients are:
- Charging exorbitant fees
- Failing to provide promised services
- Charging employers fees or ongoing retainers
- Purposefully lying to keep a client from finding employment they're qualified for
- Giving poor advice to a client forcing them to remain a client for longer
To prevent this, LARA requires agencies to:
- Get licensed
- Purchase a surety bond
- Take the required examinations
The Michigan personnel surety bond requirement is your commitment, your guarantee, that you will follow the rules and give your clients the best service.
What is a Cash Bond?
A cash bond, or cash savings bond, is a special type of bank account you can provide instead of purchasing a surety bond.
However, this is often a prohibitive option as the savings bond must be fully funded with the $10,000 amount.
As you'll see, purchasing a surety bond only costs a small fraction of the $10,000 amount required.
How Much Does a Michigan Personnel Agency Bond Cost?
At a high level, a surety bond is priced similar to insurance you're used to purchasing. A surety, the insurance company underwriting the bond will take certain factors into consideration like:
- Credit history
- Business industry and experience
- The state of the industry in Michigan
From this information they will quote a rate that determines the price.
Surety Bonds Direct is a specialized surety agency and works with multiple A-rated sureties.
Because of this, we have secured a low fixed price of $100 for the bond.
| Bond Amount | Bond Term | Price | Click to Purchase |
|---|---|---|---|
| $10,000 | 1 Year | $100.00 | Click to Purchase |
| $10,000 | 2 Year | $175.00 | Click to Purchase |
| $10,000 | 3 Year | $250.00 | Click to Purchase |
And what's even more convenient is this bond is an instant issue. This means you can purchase it today and within one business day at the longest have your bond emailed to you.
How Long Does The Michigan Personnel Agency Bond Last?
The Michigan personnel agency bond has a one year bond term.
This means the bond is active for 12 months from its effective date. The effective date is typically set a day or two after you purchase your bond, usually the day you receive the bond and file it with LARA.
The anniversary of purchasing your bond is it's renewal period.
About 30 to 45 days in advance of your bond's expiration date, a Surety Bond Direct bond specialist will contact you to remind you of the renewal and assist in making any updates require for your bond.
Renewing the bond is as easy as purchasing it. Just pay the renewal premium and your bond will remain active.
You won't have to file the bond with LARA again.
Personnel Agent Bonds And Getting Your Michigan Business License/Registration
Need Help Getting Your Michigan Personnel Agency License?
LARA's website does a good job of making the licensing process easy to understand.
At a high level the steps for getting licensed as a Type A personnel agency are:
- Fill out the online application and must be completed online
- Pay the $600 license fee good for three years
- Each owner, officer, and partner must answer the Good Moral Character Question
- The owner or owners must provide their social security numbers
- If you qualify, you can apply for a fee waiver
- Purchase the surety bond
- Meet the on-premise requirements
- Designate the licensed agent for the agency
- A non-resident applicant must provide a certificate of authority
If you have any questions about the bonding requirement, you can call a bond specialist at 1-800-608-9950.
Remember, you can purchase your bond today and have it issued in under one business day.