Neutral Bonding Requirements:
Bonding the neutral wire to ground is required on some construction sites. Industrial Generators provide neutral bonding. This is NOT required on portable generators used at your home.
Neutral and ground conductors must be bonded together in one location only. This is done at the main electrical service panel, where both lines connect to a common ground rod or plate.
If you bond the Neutral on your generator to ground unless it was designed to do this you risk causing serious damage to its electrical system. If there is a ground fault in your home the power that normally returns to your generator will be live on the ground and most people not grounding the generator this creates a circuit between you contacting the generator and completing a path to ground causing electrical shock.
If you are hooking up your generator to a transfer switch our your home, all 4 wires must be used. If you fail to hook up the Neutral it will result in dangerously high voltages in your home. I mention this because some have used 3 wire extension cords using the two hot wires and one ground leaving neutral un connected.
The neutral conductor carries an equal and opposite current to what flows through the live line. The ground conductor is a safety line only. Under normal use it carries no current and ensures the chassis of equipment (or generator) remains at ground potential and safe to touch