Form El-4 - Memorandum Of Understanding Letter Of Credit
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1
2Vermont Department of Labor
Memorandum of Understanding
Letter of Credit
This is a Memorandum of Understanding between _______________________________________________
and the Commissioner of the Vermont Department of Labor.
WHEREAS, Employer has applied for a license to do business as an Employee Leasing Company in Vermont;
and
WHEREAS, the Commissioner has approved that application contingent upon the Employee Leasing
Company posting security in the amount of $100,000.00 or 5% of the previous years Vermont wages, benefits,
workers' compensation premiums or awards or unemployment compensation contributions, whichever is
greater; and
WHEREAS, Employer wishes to meet this security requirement by posting a Letter of Credit issued by the
(name of bank) which is a Vermont state chartered bank/a federally chartered bank (cross out as appropriate)
with its main office in ______________________________________ therefore;
The Commissioner and Employer agree as follows:
1. The Letter of Credit is being furnished for the Commissioner in lieu of a surety bond in order to meet the
condition established by statute for issuance of a license to do business as an employee leasing company.
2. Unless the Commissioner is notified otherwise by Registered Mail at least 90 days before any expiry date,
the Letter of Credit will be automatically extended without amendment for an additional one year period.
3. Employer may, at any time, substitute a surety bond in an amount equal to the Letter of Credit. The surety
bond furnished shall be subject to the prior approval of the Commissioner.
4. If the Commissioner is notified that the Letter of Credit will not be renewed and a new Letter of Credit
acceptable to the Commissioner is not filed, the Commissioner may, at his or her discretion and 30 or more
days after he or she received the notice, draw on the Letter of Credit.
5. The Commissioner may at his or her discretion, draw on the Letter of Credit at any time if needed to pay
unpaid Vermont wages, benefits, workers' compensation premiums or awards or unemployment
contributions which are the Employee Leasing Company's responsibility.
6. All proceeds resulting from the Commissioner drawing on the Letter of Credit shall be deposited with the
State Treasurer and shall only be used to pay unpaid Vermont wages, benefits, workers' compensation
premiums or awards or unemployment contributions which are the Employee Leasing Company's
responsibility.
7. The Letter of Credit and this Memorandum of Understanding shall be governed by and interpreted under
the laws of Vermont. Any action with respect to the Letter of Credit may be brought in a Vermont state court
and Employee Leasing Company shall consent to the court's personal jurisdiction over the employer in that
action.
8. This Memorandum of Understanding is effective on _________________________________ .
EMPLOYEE LEASING COMPANY:
VERMONT DEPARTMENT OF LABOR
Name: __________________________________
Name: ___________________________________
Title: ___________________________________
Title: ____________________________________
Date: ___________________________________
Date: ____________________________________
(SEAL)
(SEAL)
EL-4 (9/05)
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