🇺🇸 MONTANA STATE LAW – 2026 UPDATE

Montana Remote Work Laws 2026

⚠️Informational only — not legal or tax advice.

Last Updated: December 2025
Applicable Period: 2026 tax year and current employment regulations
Key Characteristic: Employers with remote workers physically located in Montana

Montana remote work laws and employment regulations guide

Table of Contents

Click any item below to jump to the relevant section

Overview

Montana’s employment law framework differs notably from other states, particularly in its approach to employment termination. According to available information, Montana is the only U.S. state that does not follow the “at-will” employment doctrine after an initial probationary period.

General Characteristics (As of 2025)

Minimum Wage:

  • 2025 Rate: $10.55/hour (effective January 1, 2025)
  • Adjustment Method: Reviewed annually by September 30, adjusted based on Consumer Price Index
  • Source: Montana Department of Labor & Industry

Employment Structure:

  • Unique termination protections under Wrongful Discharge from Employment Act (WDEA)
  • Probationary period typically 6-12 months
  • “Good cause” required for termination after probation

Tax Structure:

  • State income tax: Two-bracket system (4.7% and 5.9% for 2025)
  • Scheduled reductions: Top rate to 5.65% in 2026, 5.4% in 2027
  • No statewide sales tax

Break Requirements:

  • No state-mandated meal or rest breaks for adults
  • Federal rules may apply if breaks are voluntarily provided

Workers’ Compensation:

  • Generally required for employers with one or more employees
  • Coverage extends to remote workers performing work in Montana

Paid Leave:

  • No state-mandated paid sick leave
  • Federal FMLA may apply to eligible employers and employees

Source: Montana Department of Labor & Industry – https://dli.mt.gov/

These characteristics provide general context only. Specific applicability depends on employer size, industry, worker classification, and individual circumstances. For guidance on particular situations, consult Montana DLI or legal counsel.

Official State Agency

Montana Department of Labor & Industry (DLI)

Contact Information:

  • Website: https://dli.mt.gov/
  • Main Phone: (406) 444-2840
  • Address: P.O. Box 1728, Helena, MT 59624-1728

Key Divisions:

  • Employment Relations Division
  • Employment Standards Division
  • Workforce Services Division
  • Unemployment Insurance Division

The Montana DLI administers and enforces state employment laws. For official interpretations and determinations, contact the appropriate division. For legal advice on how laws apply to specific situations, consult a licensed Montana attorney.

Major Employment Statutes

The following statutes are commonly referenced in Montana employment matters. This is general information only and does not constitute legal interpretation.

Montana Minimum Wage Law

Statutory Citation: Montana Code Annotated (MCA) § 39-3-401 et seq.
Official Source: https://leg.mt.gov/bills/mca/title_0390/chapter_0030/part_0040/sections_index.html

General Provisions: According to the statute, Montana’s minimum wage is adjusted annually based on the Consumer Price Index. The law generally requires that Montana minimum wage exceed both the federal minimum wage and the previous year’s Montana rate.

Application to Remote Work:
Minimum wage typically applies based on where work is physically performed. Workers performing duties from Montana locations would generally be subject to Montana minimum wage requirements. Specific situations may require consultation with Montana DLI or legal counsel.

Montana Wrongful Discharge from Employment Act (WDEA)

Statutory Citation: MCA § 39-2-901 et seq.
Effective Date: 1987
Official Source: https://leg.mt.gov/bills/mca/title_0390/chapter_0020/part_0090/sections_index.html

General Framework:

Montana’s WDEA establishes termination standards that differ from the at-will employment doctrine used in most other states. According to the statute:

During Probationary Period:

  • Employment may be terminated by either party for any reason or no reason
  • Standard probationary period: 6 months from hire date if not otherwise specified
  • Employers may establish different probationary periods

After Probationary Period: The statute describes wrongful discharge as occurring when:

  • Termination was in retaliation for refusing to violate public policy or reporting violations
  • Discharge was not for “good cause” after completion of probationary period
  • Employer violated express provisions of its own written personnel policy

Definition of “Good Cause” (MCA § 39-2-903): According to the statute, “good cause” means “reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer’s operation, or other legitimate business reason.”

Application to Remote Workers: The WDEA generally applies to employment relationships in Montana regardless of work location. Remote workers employed by Montana companies or working from Montana may be subject to these protections. Specific applicability should be confirmed with legal counsel.

Source: Montana Department of Labor & Industry Employment Relations Division

Workers’ Compensation Act

Statutory Citation: MCA § 39-71-401 et seq.
Administering Agency: Employment Relations Division – Workers’ Compensation Regulation Section
Official Source: https://erd.dli.mt.gov/work-comp-regulations/

General Coverage Framework:

According to Montana statutes, workers’ compensation coverage is generally required for employers with one or more employees. The statute provides for limited exemptions, including certain household workers, casual employees, and specific other categories.

Remote Work Considerations:

Montana’s Remote Workforce Toolkit (published by DLI) states: “Workers’ Compensation is required for employees who work remotely. The Workers’ Compensation Act applies to all employers and to all employees with limited exceptions.”

For out-of-state employers with Montana-based remote employees, the toolkit indicates that Montana workers’ compensation coverage is required, with Montana specifically endorsed in the policy.

Source: https://wsd.dli.mt.gov/employers/remote-workforce-toolkit

Montana Human Rights Act

Statutory Citation: MCA § 49-2-101 et seq.
Administering Agency: Montana Human Rights Bureau
Contact: (406) 444-2884 or (800) 542-0807

Protected Characteristics:

According to the statute, discrimination is prohibited based on:

  • Race
  • Color
  • Religion
  • Creed
  • National origin
  • Age
  • Sex (including pregnancy)
  • Marital status
  • Physical or mental disability

Application: These protections generally apply to employers regardless of the number of employees, distinguishing Montana from many federal protections that have minimum employee thresholds.

Source: https://dli.mt.gov/human-rights

Employee Classification Standards

Classification determinations have significant legal and tax implications. This section provides general background information only. Employers should consult legal counsel and tax professionals before making classification decisions.

Montana’s Classification Framework

Montana uses elements of the ABC test for certain purposes, particularly related to workers’ compensation and unemployment insurance. However, the state’s approach differs from strict ABC test states.

Statutory Authority: MCA § 39-71-401 (Workers’ Compensation)
Official Guidance: Montana Independent Contractor Central Unit (ICCU)

Independent Contractor Requirements in Montana

According to Montana law, individuals seeking classification as independent contractors must meet specific requirements:

Workers’ Compensation Compliance:

Montana requires independent contractors to either:

  1. Obtain a self-elected workers’ compensation insurance policy, OR
  2. Obtain an Independent Contractor Exemption Certificate (ICEC) from Montana DLI

Source: https://erd.dli.mt.gov/work-comp-regulations/montana-contractor/independent-contractor

Penalties for Non-Compliance: According to official sources, independent contractors who work without proper documentation may face fines up to $1,000 per violation.

General Classification Factors

Montana generally evaluates worker status using Parts A and C of the ABC test, combined with other factors:

Factor A: Freedom from Direction and Control

General Principle: The worker must be free from the employer’s direction and control in performing the work, both under contract and in fact.

Considerations that may be relevant:

  • Who determines work methods and procedures
  • Who sets work schedules and hours
  • Whether worker can refuse assignments
  • Level of supervision or oversight
  • Who provides tools and equipment
  • Whether worker performs services for other clients

Factor C: Independent Trade or Business

General Principle: The worker must be engaged in an independently established trade, occupation, profession, or business.

Considerations that may be relevant:

  • Whether worker holds themselves out as a business
  • Whether worker has business license or registration
  • Whether worker advertises services publicly
  • Whether worker has multiple clients
  • Investment in business operations
  • Potential for profit or loss based on worker’s own decisions

Illustrative Scenarios

The following scenarios are for general educational purposes only. They do not constitute classification determinations or legal advice. Actual classification depends on all facts and circumstances and requires professional evaluation.

Scenario 1: Software Developer Working Remotely

Situation: A software developer works remotely from Montana for a California company. The developer:

  • Sets own work hours
  • Uses own equipment
  • Provides services to multiple clients
  • Invoices monthly
  • Has business license
  • Has ICEC from Montana DLI

General Observations: This scenario includes several factors that may be associated with independent contractor status, including autonomy over work methods, multiple clients, and proper Montana documentation. However, other factors would need examination, such as:

  • Degree of integration with company’s business
  • Nature of contractual relationship
  • Whether work is core to company’s business
  • Economic dependency on any single client

This is not a classification determination. Each situation requires comprehensive analysis by legal counsel familiar with Montana law and complete factual circumstances.

Scenario 2: Administrative Assistant Working from Home

Situation: An individual works remotely from home in Montana providing administrative support. The arrangement includes:

  • Set work hours (9 AM – 5 PM)
  • Company provides laptop and software
  • Works exclusively for one company
  • Receives detailed task assignments
  • No other clients
  • No business license or ICEC

General Observations: This scenario includes factors that are often associated with employee status, including exclusive relationship, company-provided equipment, set hours, and detailed direction. The absence of Montana-required independent contractor documentation (ICEC or self-elected policy) may be particularly relevant.

This is not a classification determination. Actual status depends on official agency analysis and legal review.

Remote Work Classification Considerations

For remote workers, classification analysis may involve additional factors:

  • Physical work location (employee’s home state vs. employer’s state)
  • Which state’s laws govern the relationship
  • Tax nexus and obligations in multiple states
  • Workers’ compensation coverage requirements
  • Unemployment insurance obligations

These multi-state considerations add complexity to classification decisions. Consultation with legal counsel and tax professionals familiar with both Montana law and other relevant jurisdictions is strongly recommended.

How to Seek Guidance

Classification questions should be addressed through:

Montana Department of Labor & Industry

Professional Consultation:

  • Employment attorney licensed in Montana
  • Tax professional (CPA or Enrolled Agent)
  • IRS (for federal tax classification)

Verification: Montana maintains a workers’ compensation coverage verification tool available to the public for confirming coverage status.

Minimum Wage Information

Minimum wage rates change periodically. Verify current rates with official sources before making decisions.

Current Minimum Wage Rates

According to the Montana Department of Labor & Industry:

Effective Dates & Rates (Montana Minimum Wage):

Effective Date Standard Rate Small Business Rate* Source
January 1, 2025 $10.55/hour $4.00/hour MT DLI
September 30, 2025 Review date for 2026 rate Review date MT DLI

*Small business rate applies only to businesses not covered by FLSA with gross annual sales under $110,000

Official Source: https://dli.mt.gov/
Statutory Authority: MCA § 39-3-409

Annual Adjustment Mechanism

Montana law requires annual review and adjustment of the minimum wage:

Review Deadline: September 30 of each year
Adjustment Basis: Consumer Price Index (CPI)
Requirements:

  • New rate must exceed previous Montana minimum wage
  • New rate must exceed federal minimum wage

For the most current rate information, verify with Montana Department of Labor & Industry before making payroll decisions.

Small Business Exception

Eligibility Criteria:

According to Montana law, businesses meeting ALL of the following criteria may pay a lower minimum wage of $4.00/hour:

  1. NOT covered by the federal Fair Labor Standards Act (FLSA)
  2. Gross annual sales under $110,000
  3. Employee is not producing or moving goods between states

Important: This exception is narrow and fact-specific. Businesses uncertain about eligibility should consult Montana DLI or legal counsel. Most businesses are covered by FLSA.

Application to Remote Workers

General Principle: Minimum wage typically applies based on where work is physically performed, not where the employer is located.

For Remote Workers in Montana:

  • Worker performing duties from Montana location generally subject to Montana minimum wage
  • Worker’s physical presence in Montana during work hours typically creates obligation
  • Out-of-state employers with Montana remote workers generally must comply with Montana rates

Multi-State Situations: Workers splitting time between Montana and other states may create complex compliance obligations. Consult legal counsel for multi-state remote work arrangements.

No Tip Credit in Montana

Montana does not permit a tip credit against minimum wage. According to Montana law, tipped employees must receive the full state minimum wage before tips.

What this means:

  • Employers cannot count tips toward minimum wage obligation
  • Tipped workers receive $10.55/hour (2025) plus tips
  • This differs from many states that allow reduced rates for tipped employees

Source: Montana Department of Labor & Industry

Subminimum Wage Restrictions

Montana generally does not allow subminimum wages for:

  • Youth workers (training wage not permitted)
  • Workers with disabilities (must receive standard minimum wage)

This differs from federal law and some state laws that permit lower rates for certain categories. Montana’s approach provides broader wage protections.

Comparison with Neighboring States

For reference only - each state's laws apply based on work location

State 2025 Rate Notes
Montana $10.55 Annually adjusted
Idaho $7.25 Federal minimum
Wyoming $7.25 Federal minimum
North Dakota $7.25 Federal minimum
South Dakota $11.50 Annually adjusted

Application: Workers are subject to minimum wage requirements of the state where work is performed, regardless of employer location.

Enforcement and Complaints

Montana Department of Labor & Industry – Employment Standards Division

Contact:

Complaint Process: Workers who believe they have not received proper minimum wage may file a wage claim with the Employment Standards Division. The division investigates complaints and may seek recovery of unpaid wages.

Statute of Limitations: Wage claims generally must be filed within specific timeframes. Consult Montana DLI or legal counsel regarding deadlines.

Overtime Regulations

Wage and hour compliance is complex and fact-specific. This section provides general background information only.

Overtime Standards in Montana

Montana generally follows the federal Fair Labor Standards Act (FLSA) for overtime requirements.

Statutory Authority: MCA § 39-3-405
Federal Authority: 29 U.S.C. § 207

General Overtime Threshold

Standard Requirement: According to Montana law and federal FLSA, non-exempt employees generally must receive overtime pay at 1.5 times their regular rate for:

  • Hours worked beyond 40 in a workweek

Montana does NOT require:

  • Daily overtime (no overtime for working more than 8 hours in a day)
  • Double-time rates
  • Overtime for weekend or holiday work (unless total weekly hours exceed 40)

This differs from states like California that mandate daily overtime thresholds.

What Constitutes “Hours Worked”

For overtime calculation purposes, “hours worked” generally includes:

  • Time actually performing work duties
  • Required meetings and training
  • Time waiting to perform work (in some circumstances)
  • Travel time (in certain situations)
  • On-call time (depending on restrictions)

Remote Work Considerations:

Determining compensable time for remote workers can be particularly complex:

  • After-hours email and message responses
  • Time spent in virtual meetings
  • Logging in outside regular hours
  • On-call availability from home

These determinations depend on specific facts including employer expectations, level of control, and degree of restriction on employee’s personal time. Employers should consult wage-hour counsel for guidance on tracking and compensating remote workers.

Overtime Exemptions

Montana recognizes exemptions from overtime requirements for certain categories of workers. Common exemptions include:

Executive, Administrative, and Professional (EAP) Exemptions

To potentially qualify for exemption, employees generally must satisfy three tests:

1. Salary Basis Test

  • Paid predetermined salary not subject to reduction based on work performed
  • Salary paid regardless of hours worked or quality of work

2. Salary Level Test

  • Must meet minimum salary threshold
  • Federal threshold (2025): Check current DOL guidance
  • Montana follows federal thresholds unless state law specifies otherwise

3. Duties Test

  • Must perform exempt-level duties as primary job function

Examples of Exempt Duties (from federal regulations):

  • Executive: Managing enterprise or department, directing work of two+ employees, authority over hiring/firing
  • Administrative: Office/non-manual work related to business operations, exercising discretion on significant matters
  • Professional: Work requiring advanced knowledge in field of science or learning, or creative/artistic endeavors

Critical: Job title alone does not determine exemption. All three tests must be met. An employee titled “manager” who doesn’t meet salary or duties tests is non-exempt and entitled to overtime.

Computer Professional Exemption

Salary Requirements (verify current rates):

  • May be paid salary or hourly
  • If hourly: Must meet minimum rate threshold
  • If salary: Must meet minimum salary threshold

Duties Requirements: Work must primarily involve:

  • Application of systems analysis techniques and procedures
  • Design, development, documentation, analysis, creation, testing, or modification of computer systems or programs
  • Design, documentation, testing, creation of computer programs related to machine operating systems

Other Common Exemptions

Montana law and federal FLSA recognize additional exemptions including:

  • Outside sales employees
  • Certain agricultural workers
  • Certain seasonal amusement/recreational establishment employees
  • Transportation workers (subject to Department of Transportation regulations)
  • Others specified in statute and regulation

Source: Montana Department of Labor & Industry – https://dli.mt.gov/
Federal Source: U.S. Department of Labor – https://www.dol.gov/agencies/whd

Remote Work and Exemption Status

Key Principle: Exemption status is based on job duties and compensation, not work location.

Considerations for Remote Workers:

  • Exemption tests apply equally to remote and on-site workers
  • Working from home does not automatically affect exempt status
  • However, changes in duties or supervision may affect exemption analysis
  • Employers should periodically review remote workers’ actual duties

Risk Area: Remote workers who are classified as exempt but are heavily supervised or perform routine tasks may not meet exemption requirements despite job titles.

Calculating Overtime for Remote Workers

Regular Rate Determination:

The “regular rate” for overtime calculation includes:

  • Hourly wages or salary
  • Non-discretionary bonuses
  • Shift differentials
  • Certain other compensation

Excludes:

  • Discretionary bonuses
  • Gifts
  • Certain benefit payments

For Remote Workers: Calculating regular rate may involve additional considerations if workers receive:

  • Technology stipends
  • Home office allowances
  • Other remote work payments

Consult wage-hour counsel to determine whether such payments must be included in regular rate.

Recordkeeping Requirements

Montana and Federal Requirements:

Employers must maintain accurate records of:

  • Hours worked each day
  • Total hours worked each week
  • Regular rate of pay
  • Overtime hours and overtime pay
  • Other wage and hour information

Remote Work Challenges:

Tracking remote workers’ hours presents unique challenges:

  • Self-reporting accuracy
  • Unrecorded overtime
  • “Off-the-clock” work
  • Technology for time tracking

Best Practices: Many employers implement:

  • Time tracking software
  • Clear policies on work hours
  • Pre-approval requirements for overtime
  • Regular review of actual hours worked

These are recommendations only, not legal requirements. Consult HR professionals and legal counsel for appropriate systems.

Resources and Contacts

Montana Department of Labor & Industry

  • Employment Standards Division: (406) 444-5600
  • Wage and Hour Information: https://dli.mt.gov/
  • Overtime Calculator: Available on DLI website

U.S. Department of Labor

For Legal Guidance:

  • Employment attorney licensed in Montana
  • Montana State Bar Association Referral: (406) 442-7660

Workers' Compensation

Legal Framework

Statutory Authority: Montana Code Annotated § 39-71-401 et seq.
Administering Agencies:

  • Employment Relations Division – Workers’ Compensation Regulation Section
  • Montana State Fund (state insurance option)

Contact Information:

General Coverage Requirements

According to Montana statutes, workers’ compensation coverage is generally required for:

Covered Employers:

  • Businesses with one or more employees (full-time or part-time)
  • Includes seasonal and temporary workers
  • Sole proprietors, partners, and LLC members are excluded by default but may elect coverage
  • Corporate officers are automatically excluded unless they receive pay or own less than 20%

Source: MCA § 39-71-401

Coverage Options in Montana

Montana employers can obtain workers’ compensation coverage through:

1. Montana State Fund

2. Private Insurance Companies

  • Licensed carriers authorized in Montana
  • Competitive market available

3. Self-Insurance

  • Must obtain approval from Montana DLI
  • Requires demonstration of financial capacity
  • Must submit audited financial statements and actuary reports

Remote Worker Coverage

Official Guidance from Montana DLI Remote Workforce Toolkit:

“Workers’ Compensation is required for employees who work remotely. The Workers’ Compensation Act applies to all employers and to all employees with limited exceptions.”

For Out-of-State Employers with Montana Remote Workers:

According to Montana’s Remote Workforce Toolkit:

  • Employers located outside Montana with employees working from Montana must have workers’ compensation coverage
  • Montana must be specifically endorsed in the policy (Section 3A of policy declaration page)
  • An “All States Policy” endorsement does NOT meet Montana’s requirement

Source: https://wsd.dli.mt.gov/employers/remote-workforce-toolkit

What Workers’ Compensation May Cover

According to Montana statutes, benefits may include:

Medical Benefits:

  • Reasonable medical treatment and services
  • Hospital care
  • Prescription medications
  • Physical therapy and rehabilitation
  • Medical equipment

Wage Replacement Benefits: Montana has four categories of disability benefits:

1. Temporary Total Disability (TTD)

  • For workers completely unable to work due to injury
  • Generally 66⅔% of gross wages at time of injury
  • Subject to state maximum rate
  • Not paid for first 32 hours (or 4 days) unless disability exceeds 21 days

2. Temporary Partial Disability (TPD)

  • For workers able to work with restrictions
  • Wage differential between pre-injury and current earnings

3. Permanent Partial Disability (PPD)

  • For permanent impairment that is not totally disabling
  • Based on impairment rating and wage loss

4. Permanent Total Disability (PTD)

  • For workers who cannot return to any gainful employment
  • Ongoing benefits for duration of disability

Additional Benefits May Include:

  • Vocational rehabilitation services
  • Survivor benefits (in case of work-related death)
  • Reasonable travel expenses for medical care

Source: Montana Code Annotated § 39-71-701 et seq.

Home Office Injury Scenarios

Coverage of injuries occurring in home offices is highly fact-specific. The following scenarios are for general educational purposes only and do not constitute coverage determinations.

Legal Standard: “Arising Out of and In the Course of Employment”

Montana workers’ compensation generally covers injuries that:

  1. Arise out of employment (work-related cause)
  2. Occur in the course of employment (during work time/place)

Illustrative Scenario 1: Work Equipment Injury

Situation: Employee is working from designated home office during normal work hours. Employee trips over computer cables while retrieving work documents from printer and suffers injury.

Factors That May Be Relevant:

  • Activity was work-related (retrieving work documents)
  • Occurred during work hours
  • Occurred in designated work area
  • Hazard related to work equipment

Factors That May Also Be Considered:

  • Whether employer knew of and authorized home office setup
  • Whether home office was designated workspace
  • Whether employer had any control over workspace setup
  • Other specific circumstances

This is not a coverage determination. Actual determinations are made by workers’ compensation insurers and, if disputed, by Montana’s Workers’ Compensation Court based on complete factual analysis.

Illustrative Scenario 2: Repetitive Stress Injury

Situation: Employee develops carpal tunnel syndrome after months of computer work from home office.

Factors That May Be Relevant:

  • Medical documentation of work-relatedness
  • Duration and nature of work activities
  • Ergonomic setup of workspace
  • Whether work duties primarily caused condition

Potential Challenges:

  • Establishing causation in home environment
  • Documenting work activities vs. personal activities
  • Medical evidence of work-relatedness

This is not a coverage determination. Repetitive stress claims require thorough medical and factual analysis.

Illustrative Scenario 3: Personal Activity During Work Hours

Situation: Employee leaves home office during work day to prepare lunch in kitchen, slips on wet floor, and is injured.

Factors That May Be Relevant:

  • Whether activity was personal comfort vs. work duty
  • Whether employee was on break or “on the clock”
  • Montana law regarding personal comfort doctrine
  • Specific circumstances of injury

General Observation: Personal comfort activities unrelated to work duties may be less likely to be considered work-related, but specific facts and Montana case law would apply.

This is not a coverage determination.

Exemptions from Coverage

Montana law provides exemptions from workers’ compensation requirements for:

Common Exemptions:

  • Household or domestic workers
  • Casual employees (irregular, occasional work)
  • Real estate, securities, and insurance salespeople paid solely by commission
  • Certain family members of business owners
  • Workers employed by enrolled tribal members on reservation only
  • Independent contractors with proper ICEC or self-elected coverage

Source: MCA § 39-71-401

Reporting Requirements

For Employees: According to Montana law:

  • Must notify employer of injury within 30 days of occurrence
  • Should seek medical treatment promptly
  • May choose initial treating physician

For Employers:

  • Must file First Report of Injury (FROI) within 6 business days of notification
  • Must report to insurance carrier
  • Must post notice of workers’ compensation coverage in workplace

Penalties for Late Reporting: Deadlines are strictly enforced. Late reporting may affect claim processing and potential benefits.

Best Practices for Remote Work

The following are general recommendations, not legal requirements. Consult safety professionals and legal counsel.

For Employers:

  • Consider providing ergonomic guidance for home offices
  • Consider developing home office safety policies
  • Consider injury reporting procedures specific to remote workers
  • Consider safety training for remote work
  • Document remote work arrangements and locations
  • Maintain clear policies on work hours and job duties

For Employees:

  • Report injuries promptly within 30-day deadline
  • Document work area setup
  • Follow employer safety guidelines
  • Maintain clear boundaries for work hours
  • Keep records of work-related activities

Verification of Coverage

Montana provides a free online verification tool for checking workers’ compensation coverage:

Coverage Verification:

  • Available on Montana DLI website
  • Search by business name or FEIN
  • Shows whether business has current coverage
  • Does not show coverage details or policy limits

This tool allows workers and contracting parties to verify coverage status.

Penalties for Non-Compliance

According to Montana law, employers who fail to maintain required workers’ compensation coverage may face:

  • Fines of $200 OR twice the amount of premium that should have been paid for past three years, whichever is greater
  • Stop-work orders for construction projects
  • Personal liability for injuries
  • Other penalties as provided by statute

Source: Montana Department of Labor & Industry

Tax Information

State Income Tax Structure

Montana imposes state income tax on individuals and businesses. For 2025-2027, Montana is implementing a schedule of rate reductions.

Statutory Authority: Montana Code Annotated Title 15, Chapter 30
Administering Agency: Montana Department of Revenue

Contact:

Individual Income Tax Rates

2025 Tax Year (filed in 2026):

Montana uses a two-bracket system:

State Tax Brackets:

Filing Status Income Bracket Tax Rate
Single $0 - $21,100 4.7%
Single Over $21,100 5.9%
Married Filing Jointly $0 - $42,200 4.7%
Married Filing Jointly Over $42,200 5.9%

Future Reductions:

  • 2026: Top rate reduces to 5.65%
  • 2027: Top rate reduces to 5.4%

Source: Montana House Bill 337 (2025), Montana Department of Revenue

Remote Work Tax Considerations

General Principle: State income tax typically depends on:

  1. Where the taxpayer resides
  2. Where income is earned (sourced)

For Remote Workers:

Montana Residents Working Remotely for Out-of-State Employers:

  • Generally must pay Montana income tax on all income
  • May also owe tax to other states where work is performed
  • May claim credit for taxes paid to other states
  • Should file Montana resident return

Non-Residents Working Remotely from Montana:

  • May owe Montana income tax on income earned while physically present in Montana
  • Filing requirements depend on amount of Montana-source income
  • Should consult tax professional for multi-state situations

Part-Year Residents:

  • Tax obligations depend on residency period and income sources
  • Must file Montana part-year resident return
  • Income apportioned based on residency status

Source: Montana Department of Revenue
Federal Resource: IRS Publication 505 (Tax Withholding and Estimated Tax)

Employer Withholding Obligations

Montana Withholding Requirements:

Employers must withhold Montana income tax from employees’ wages when:

  • Employee is Montana resident, OR
  • Employee performs work in Montana

Form MW-4: Montana uses Form MW-4 for withholding elections. The form was updated in 2025 to eliminate allowances in favor of filing status-based calculation.

Withholding Rates: Based on employee’s MW-4 and Montana tax tables

Remote Work Complexity: Employers with remote workers in multiple states may have withholding obligations in each state where work is performed. This creates compliance challenges for payroll processing.

Source: Montana Department of Revenue – https://revenue.mt.gov/businesses/withholding-tax

Unemployment Insurance Tax

For Employers:

Montana requires employers to pay unemployment insurance (UI) tax.

2025 UI Tax Rates:

  • Range: 0.00% to 6.12%
  • Wage Base: $45,100 per employee (2025)
  • New Employer Rates: 1.3% to 2.0% (varies by industry)

Remote Work Considerations:

According to Montana’s Remote Workforce Toolkit:

  • Out-of-state employers with remote employees performing work in Montana must register and pay Montana UI tax
  • “If work is being ‘performed’ in Montana the employer needs to register and pay UI for the employee(s)”

Registration: Employers can register online at: https://uieservices.mt.gov/

Source: Montana Department of Labor & Industry – Unemployment Insurance Division

Business Income Tax

Corporate Income Tax:

  • Single rate: 6.75%
  • Applies to C-corporations doing business in Montana

Pass-Through Entities:

  • Income “passes through” to owners
  • Owners pay individual income tax on their share

Remote Business Considerations: Businesses with remote operations in Montana may create tax nexus, triggering Montana tax obligations. Consult tax professionals for nexus analysis.

No Sales Tax

Montana does not impose a statewide sales tax. This simplifies compliance for many businesses.

Local Resort Taxes: Some resort communities (populations under 5,500) may impose local resort taxes. These are limited and apply to specific tourist-oriented businesses.

Property Tax

Montana property taxes are administered at the local level. Rates vary by county and municipality.

For Remote Workers: Individuals working from home generally do not face different property tax treatment based on home office use. Property taxes are based on property value, not use.

For Businesses: Business property may be subject to different property tax treatment. Consult local tax assessors for business property tax questions.

Tax Resources

Montana Department of Revenue:

Professional Assistance: For tax advice specific to your situation:

  • Licensed CPA
  • IRS Enrolled Agent
  • Tax attorney
  • Montana Society of CPAs Referral

Federal Tax Information:

  • IRS: 1-800-829-1040
  • IRS.gov

Leave Entitlements

State-Mandated Leave Overview

Montana does not require most employers to provide paid leave for sick time, vacation, or personal time. However, specific leave protections exist for certain purposes.

No Paid Sick Leave Requirement

Montana has not enacted a state-wide paid sick leave mandate.

What This Means:

  • Employers are not required by Montana law to provide paid sick leave
  • Employers may choose to offer paid sick leave voluntarily
  • If employers provide paid sick leave, they should follow their stated policies
  • Federal laws may provide unpaid leave protections (see below)

Federal Family and Medical Leave Act (FMLA)

Coverage: FMLA may apply to employers with 50 or more employees within 75-mile radius.

Eligible Employees: Workers who have:

  • Worked for employer for 12 months
  • Worked at least 1,250 hours in preceding 12 months
  • Work at location with 50+ employees within 75 miles

Leave Entitlements: Up to 12 weeks unpaid leave for:

  • Birth and care of newborn
  • Adoption or foster care placement
  • Serious health condition of employee
  • Care for family member with serious health condition
  • Qualifying military family exigencies

Remote Worker Application: FMLA applies to eligible employees regardless of work location. Remote workers who meet eligibility criteria are covered.

Source: U.S. Department of Labor – https://www.dol.gov/agencies/whd/fmla

Montana Maternity Leave Act (MMLA)

Statutory Authority: MCA § 49-2-310 and 311

Coverage: Employers with any number of employees

Eligibility: Female employees who have worked for same employer for at least one year

Leave Provided: Up to 6 weeks unpaid maternity leave for:

  • Pregnancy
  • Childbirth
  • Related medical conditions

Job Protection: Employers must allow employee to return to same or similar position

Relationship to FMLA: MMLA may provide leave to employees not covered by FMLA due to employer size or employee’s work history

Source: Montana Human Rights Bureau

Military Leave

Montana Military Service Employment Rights Act (MMSERA)

Coverage: Public employers (state, county, municipal)

Eligibility: Public employees employed for six consecutive months

Leave Provided: Up to 120 hours paid military leave per year for service in:

  • Montana National Guard
  • National Guard of another state
  • Reserve corps
  • U.S. military

Source: MCA § 10-1-1005

Federal USERRA: Federal Uniformed Services Employment and Reemployment Rights Act provides broader protections for all employers and employees for military service.

Crime Victim Leave

Montana law requires employers to provide reasonable time off for employees who are:

  • Victims of crime
  • Family members of crime victims

Purpose: To attend court proceedings related to the crime

Source: MCA § 39-2-903(4)

Jury Duty

Montana law prohibits employers from:

  • Requiring or requesting employees to use vacation or sick leave for jury duty
  • Threatening or coercing employees regarding jury service

Employers are not required to pay employees during jury service, but may not penalize employees for serving.

Source: MCA § 3-15-301

Voting Leave

Montana does not have a specific statute requiring time off for voting. However, employers should consider providing reasonable accommodation for employees to vote.

Bereavement Leave

Montana law does not require employers to provide bereavement leave. Employers may offer such leave voluntarily as part of benefits package.

Public Health Emergencies

During public health emergencies, additional leave protections or requirements may be implemented. Check Montana Department of Labor & Industry for current information.

Anti-Discrimination Protections

Montana Human Rights Act (MHRA)

Statutory Authority: MCA § 49-2-101 et seq.
Administering Agency: Montana Human Rights Bureau

Contact:

Protected Characteristics

Montana law prohibits employment discrimination based on:

  • Race
  • Color
  • Religion
  • Creed
  • National Origin
  • Age (18 and older)
  • Sex (including pregnancy, childbirth, and related medical conditions)
  • Marital Status (unique to Montana – broader than federal law)
  • Physical or Mental Disability

Broader Than Federal Law: Montana’s inclusion of marital status and its application to all employers (regardless of size) provides broader protections than federal discrimination laws.

Covered Employers

Critical Distinction: Montana Human Rights Act applies to ALL employers, regardless of number of employees. This differs from federal laws that often require minimum employee counts.

Prohibited Actions

The MHRA prohibits:

In Hiring:

  • Refusing to hire based on protected characteristics
  • Discriminatory job advertisements
  • Biased selection processes

In Employment:

  • Unequal compensation or benefits
  • Discriminatory discipline or termination
  • Harassment based on protected characteristics
  • Retaliation for opposing discrimination or participating in investigations

In Promotion and Advancement:

  • Discriminatory promotion decisions
  • Unequal training opportunities
  • Biased performance evaluations

Harassment as Discrimination

Harassment based on protected characteristics is considered unlawful discrimination when:

  • It creates a hostile work environment
  • It is severe or pervasive
  • It unreasonably interferes with work performance

Application to Remote Work: Harassment prohibitions apply equally to remote work environments, including:

  • Virtual meeting conduct
  • Electronic communications
  • Online collaboration platforms

Pregnancy Discrimination

Montana law specifically addresses pregnancy discrimination:

Protections Include:

  • Cannot refuse to hire due to pregnancy
  • Cannot terminate due to pregnancy
  • Must treat pregnancy-related conditions as other temporary disabilities
  • See Montana Maternity Leave Act (above) for leave protections

Disability Discrimination and Accommodation

Montana Human Rights Act Requirements:

Employers must provide reasonable accommodation for known physical or mental disabilities unless accommodation would impose undue hardship.

Remote Work as Accommodation: In some cases, remote work may be considered as a reasonable accommodation for employees with disabilities. Employers should engage in interactive process to determine appropriate accommodations.

Source: Montana Human Rights Bureau guidance

Age Discrimination

Montana law prohibits age discrimination against individuals 18 and older.

Broader Than Federal: Federal Age Discrimination in Employment Act (ADEA) only protects workers 40 and older. Montana provides broader protection.

Marital Status Discrimination

Unique Montana Protection:

Montana is one of few states explicitly prohibiting employment discrimination based on marital status.

What This Means:

  • Cannot make hiring decisions based on whether applicant is married
  • Cannot treat married and unmarried employees differently
  • Cannot discriminate based on spouse’s characteristics or employment

Filing Discrimination Complaints

Montana Human Rights Bureau:

Process:

  1. File charge with Montana Human Rights Bureau
  2. Bureau investigates
  3. Mediation may be offered
  4. If discrimination found, remedies may be sought

Deadlines:

  • Generally must file within 180 days of discriminatory act
  • Some exceptions may apply

Contact:

  • Phone: (406) 444-2884 or (800) 542-0807
  • Online: Complaint forms available on Montana Human Rights Bureau website

Relationship to Federal EEOC: Charges filed with Montana Human Rights Bureau are automatically dual-filed with federal EEOC. Individuals need not file separately with both agencies.

Federal Anti-Discrimination Laws

In addition to Montana law, federal laws may apply:

Title VII (Civil Rights Act of 1964):

  • Prohibits discrimination based on race, color, religion, sex, national origin
  • Applies to employers with 15+ employees
  • Enforced by EEOC

Americans with Disabilities Act (ADA):

  • Prohibits disability discrimination
  • Requires reasonable accommodation
  • Applies to employers with 15+ employees

Age Discrimination in Employment Act (ADEA):

  • Prohibits age discrimination (40+)
  • Applies to employers with 20+ employees

Equal Pay Act:

  • Requires equal pay for equal work regardless of sex
  • Applies to all employers covered by FLSA

Pregnancy Discrimination Act:

  • Prohibits pregnancy discrimination
  • Part of Title VII

Source: U.S. Equal Employment Opportunity Commission – https://www.eeoc.gov/

Workplace Safety

Montana Safety Culture Act (MSCA)

Montana requires employers to maintain safe working environments.

Key Requirements:

Safety Training Program: All employers must develop comprehensive safety training for employees

Safety Committee: Employers with more than 5 employees must establish a safety committee

Application to Remote Workers: Safety obligations extend to remote workers, though implementation differs from traditional workplace settings.

Federal OSHA

Montana operates under federal OSHA (Occupational Safety and Health Administration) jurisdiction rather than a state OSHA plan.

Contact:

  • OSHA Billings Area Office: (406) 247-7494
  • OSHA National: 1-800-321-OSHA (6742)
  • Website: https://www.osha.gov/

Remote Work Safety: While OSHA’s jurisdiction over home offices is limited, employers should consider:

  • Ergonomic guidance
  • Safe work practices
  • Electrical safety
  • Other relevant safety matters

Montana Clean Indoor Air Act

Statutory Authority: MCA Title 50, Chapter 40

Key Provision: Prohibits smoking in enclosed public places, including most workplaces

Application: Generally applies to traditional workplaces. Home offices are considered private residences.

Workplace Injury Reporting

Beyond workers’ compensation reporting:

  • Employers must report serious injuries to OSHA
  • Fatalities must be reported within 8 hours
  • In-patient hospitalizations within 24 hours

These requirements apply to work-related injuries regardless of where work is performed.

Remote Work-Specific Considerations

Montana’s Remote Work Initiative

Montana has recognized remote work as a workforce development strategy. The Montana Department of Labor & Industry partnered with Montana State University Extension to launch the Remote Work Certificate Program.

Program Features:

  • Training for remote employment skills
  • Freelance work preparation
  • E-commerce fundamentals
  • Professional remote network connections
  • Cost: $199 (financial assistance available)

Information: Contact local Montana Job Service office or visit MSU Extension website

Source: Montana DLI Remote Workforce Toolkit

Legal Employment and Government Accountability Law (LEGAL Act)

Effective Date: July 1, 2025
Statutory Authority: House Bill 226

Key Provision: Requires employers to verify lawful employment status of all workers before hiring through E-Verify or acceptable I-9 documentation.

Enforcement:

  • Montana DLI authorized to conduct employer audits
  • Both random selection and complaint-based investigations
  • Applies to all workers, including remote employees

Employer Obligations:

  • Verify employment authorization for all new hires
  • Maintain I-9 documentation
  • Comply with federal I-9 requirements

Contact for Questions:

Source: Montana Department of Labor & Industry announcement (July 2025)

Multi-State Remote Work Challenges

Remote work across state lines creates unique compliance challenges:

Tax Nexus

Question: Does having remote employees in Montana create tax nexus for out-of-state employers?

General Answer: Potentially yes. Physical presence of employees may create:

  • Income tax nexus
  • Unemployment insurance obligations
  • Workers’ compensation requirements
  • Wage and hour jurisdiction

Consult tax professionals for nexus analysis.

Which State’s Laws Apply?

General Principle:

  • Workers’ compensation: Where work is performed
  • Minimum wage: Where work is performed
  • Overtime: Where work is performed
  • Income tax withholding: Where work is performed (and possibly employee’s residence state)
  • Unemployment insurance: Generally where services are localized or base of operations

Complexity: Multi-state situations often require legal analysis. Do not assume employer’s state laws apply to remote workers in other states.

Written Remote Work Agreements

While not legally required, written agreements can clarify:

Suggested Elements:

  • Work location and any location restrictions
  • Work hours and availability expectations
  • Equipment provided and responsibilities
  • Expense reimbursement policies
  • Data security and confidentiality
  • Tax withholding arrangements
  • Which state’s laws govern employment relationship

These are general recommendations. Consult employment counsel for appropriate agreement provisions.

Technology and Equipment

Legal Considerations:

Montana Wage and Hour Law: Employers must reimburse employees for necessary business expenses if failure to reimburse would reduce employee’s pay below minimum wage.

Remote Work Application: If employees must provide their own internet, equipment, or other resources, employers should evaluate whether reimbursement is required.

Federal FLSA: Similar principles apply. Unreimbursed expenses cannot reduce employee’s pay below minimum wage.

Best Practices: Many employers provide:

  • Company laptops/equipment
  • Internet stipend
  • Phone allowance
  • Home office setup allowance

Consult legal and HR professionals for appropriate policies.

Data Security and Privacy

Employer Considerations:

Remote workers accessing company data from home create security risks. While Montana has limited state-specific data security employment laws, employers should consider:

  • VPN requirements
  • Encryption standards
  • Acceptable use policies
  • Data breach reporting protocols
  • BYOD (Bring Your Own Device) policies

Federal Laws: Depending on industry, federal data security laws may apply (HIPAA, GLBA, etc.)

Ergonomics and Home Office Safety

No Specific Montana Requirements:

Montana does not have specific ergonomic requirements for home offices. However:

Workers’ Compensation Considerations:

  • Repetitive stress injuries may be compensable if work-related
  • Employers may wish to provide ergonomic guidance to reduce injury risk

OSHA: Federal OSHA has limited jurisdiction over home offices but has stated employers are responsible for hazards under their control.

Recommendations: Many employers provide:

  • Ergonomic assessments
  • Proper equipment (chairs, desks, monitors)
  • Training on proper setup
  • Guidelines for safe home office practices

Record Retention Requirements

Montana law and federal law require employers to maintain various employment records.

Wage and Hour Records

Federal FLSA Requirements: Maintain for at least 3 years:

  • Employee’s full name and Social Security number
  • Address, including zip code
  • Birth date (if younger than 19)
  • Sex and occupation
  • Time and day of week when employee’s workweek begins
  • Hours worked each day and total hours worked each workweek
  • Basis on which employee’s wages are paid
  • Regular hourly pay rate
  • Total daily or weekly straight-time earnings
  • Total overtime earnings for the workweek
  • All additions to or deductions from wages
  • Total wages paid each pay period
  • Date of payment and the pay period covered

Source: U.S. Department of Labor

Tax Records

Montana Withholding:

  • Employee’s W-4/MW-4 forms
  • Withholding calculations
  • Payment records

Retention: Generally 4 years after tax due date

Unemployment Insurance:

  • Wage records
  • UI tax payments
  • Separation documentation

Retention: Generally 4 years

Workers’ Compensation Records

Montana Requirements:

  • Injury reports
  • First Report of Injury (FROI) filings
  • Medical documentation
  • Return-to-work documentation

Retention: Check with Montana DLI for specific requirements; generally several years

I-9 Forms (Employment Eligibility Verification)

Federal Requirement:

  • Complete I-9 for all employees
  • Retain for 3 years after hire OR 1 year after separation, whichever is later
  • Keep separate from other personnel files

Remote Work Consideration: I-9 forms require physical examination of documents. For remote workers, employers may:

  • Have employee appear in person before hire
  • Use authorized representative to verify documents
  • Follow alternative procedures permitted during emergencies

Source: U.S. Citizenship and Immigration Services

Personnel Files

Best Practice: Maintain comprehensive personnel files including:

  • Employment application
  • Job description
  • Performance evaluations
  • Disciplinary documentation
  • Training records
  • Promotion and transfer records
  • Separation documentation

Retention: Many employers retain for 7+ years after separation

Remote Work-Specific Records

For remote workers, consider maintaining:

  • Remote work agreement
  • Home office setup documentation
  • Technology equipment inventory
  • Expense reimbursement records
  • Time tracking records
  • Communications regarding work hours and assignments

New Hire Reporting

Montana New Hire Reporting Requirements

Requirement: Employers must report new hires and rehires to Montana Department of Public Health and Human Services

Deadline: Within 20 days of hire date

Information Required:

  • Employee’s name, address, and Social Security number
  • Employer’s name, address, and Federal Employer Identification Number (FEIN)
  • Employee’s date of hire

Reporting Methods:

  • Online: Most common method
  • Mail or fax

Website: https://newhire-reporting.com/mt-newhire/default.aspx

Purpose: Assists in child support enforcement and unemployment insurance administration

Penalties: Failure to report may result in civil penalties

Remote Workers: Report all new hires, including remote workers, if employment relationship is with Montana entity or if work is performed in Montana.

Source: Montana Department of Public Health and Human Services

Child Labor Standards

Montana has specific protections for minor workers. While most remote work involves adult workers, these standards apply if minors are employed.

Montana Child Labor Standards Act

Administering Agency: Montana Department of Labor & Industry – Employment Standards Division

Work Hour Restrictions

Minors Aged 14-15:

School Days:

  • Maximum 3 hours per day
  • Maximum 18 hours per week

Non-School Days:

  • Maximum 8 hours per day
  • Maximum 40 hours per week when school not in session

Time Restrictions:

  • Cannot work before 7:00 AM
  • Cannot work after 7:00 PM (9:00 PM June 1 through Labor Day)

School-Approved Programs: May work up to 23 hours per week in school-approved work experience programs

Minors Aged 16-17:

Montana does not have specific work hour restrictions for 16-17 year olds, though federal standards may apply.

Prohibited Occupations

All Minors Under 18 Cannot Work In:

  • Mining operations
  • Logging operations
  • Manufacturing and processing occupations involving certain hazards
  • Other occupations deemed hazardous by state or federal law

Additional Restrictions for Under 16:

  • Cannot operate power-driven equipment (with limited exceptions)
  • Cannot work in numerous hazardous occupations

Source: Montana Department of Labor & Industry

Work Permits

Montana does not require work permits for minors, but employers must maintain proof of age for workers under 18.

Wage Payment and Final Pay

Regular Wage Payment

Montana Requirement: Employers must pay employees at least twice per month (semi-monthly)

Payment Methods:

  • Check
  • Direct deposit (with employee consent)
  • Payroll card (with employee consent and access to full amount)

Source: MCA § 39-3-204

Final Paycheck Requirements

Montana has specific requirements for timing of final wages:

Discharged Employees: Must be paid immediately (same day) or within 24 hours if business office is not open

Employees Who Quit: Must be paid by next regular payday OR within 15 days, whichever occurs first

What Must Be Included:

  • All earned wages
  • Accrued vacation (if employer policy requires payment)
  • Other earned compensation

Deductions: May deduct:

  • Legally required deductions (taxes, garnishments)
  • Deductions authorized in writing by employee
  • Cannot deduct for cash shortages, damaged equipment, etc. without specific written authorization

Remote Workers: Final pay requirements apply equally. Employers should have systems for prompt payment to remote workers upon separation.

Penalties: Failure to pay final wages timely may result in waiting time penalties and legal action.

Source: MCA § 39-3-205

Wage Claims

Process: Employees who believe they have not been paid properly may file wage claim with:

Montana Department of Labor & Industry – Employment Standards Division

Investigation: Employment Standards Division investigates complaints and may seek recovery of unpaid wages

Statute of Limitations: Generally must file within specific timeframes; consult Montana DLI

Resources

Montana State Resources

Montana Department of Labor & Industry

  • Main Line: (406) 444-2840
  • Website: https://dli.mt.gov/
  • Address: P.O. Box 1728, Helena, MT 59624-1728

Specific Divisions:

Employment Standards Division

  • Wage and Hour Questions: (406) 444-5600
  • Workers’ Compensation Regulations: (406) 444-6543
  • Independent Contractor Issues: (406) 444-6543

Unemployment Insurance Division

Montana Human Rights Bureau

Montana Department of Revenue

Montana State Fund (Workers’ Compensation)

Federal Resources

U.S. Department of Labor

Equal Employment Opportunity Commission (EEOC)

Occupational Safety and Health Administration (OSHA)

Internal Revenue Service (IRS)

Social Security Administration

Professional Associations

Montana State Bar Association

Montana Society of CPAs

Society for Human Resource Management (SHRM) – Montana

Legal Assistance for Workers

Montana Legal Services Association

Montana Law Help

Additional Online Resources

Montana Code Annotated

Montana Legislature

Montana Remote Workforce Toolkit

Frequently Asked Questions

General Questions

Q: Does Montana require employers to provide health insurance?

A: No. Montana does not have a state mandate requiring employers to provide health insurance. However, the federal Affordable Care Act (ACA) requires applicable large employers (50+ full-time equivalent employees) to offer coverage or potentially face penalties. Consult healthcare compliance specialists for ACA obligations.

Q: Can employers in Montana require employees to sign non-compete agreements?

A: Montana law generally disfavors non-compete agreements. MCA § 28-2-703 states that contracts restraining a person from engaging in a lawful profession, trade, or business are void, with limited exceptions. Non-compete agreements are generally only enforceable in Montana in connection with the sale of a business or dissolution of partnership, or for protection of trade secrets. Consult legal counsel before implementing non-compete provisions.

Q: Are background checks allowed in Montana?

A: Yes, but employers must comply with federal Fair Credit Reporting Act (FCRA) if using third-party screening services. This includes:

  • Getting written consent from applicant
  • Providing pre-adverse action notice if decision based on report
  • Providing copy of report and summary of rights
  • Certain criminal history restrictions may apply depending on nature of conviction and job

Consult legal counsel for compliant background check procedures.

Remote Work Specific Questions

Q: If my Montana-based company hires a remote worker in another state, which state’s employment laws apply?

A: This depends on multiple factors including:

  • Where work is performed
  • Nature of employment relationship
  • Specific law in question (wage and hour, workers’ comp, tax, etc.)

Generally:

  • Minimum wage and overtime: State where work is performed
  • Workers’ compensation: State where work is performed
  • Income tax: Both employee’s state and possibly work state
  • Unemployment insurance: Generally where services are localized

Multi-state employment requires legal analysis. Consult employment counsel.

Q: Do Montana’s overtime laws apply to remote workers in Montana who work for out-of-state employers?

A: Generally yes. Workers performing work from Montana locations are typically subject to Montana wage and hour laws, including overtime requirements. Out-of-state employers with Montana remote workers should consult legal counsel regarding Montana wage and hour compliance.

Q: Can I classify my remote workers as independent contractors to avoid employment law obligations?

A: Classification depends on the actual relationship and work arrangement, not employer preference. Misclassification can result in:

  • Back payment of wages and overtime
  • Tax penalties and back taxes
  • Workers’ compensation penalties
  • Unemployment insurance assessments
  • Legal liability

Montana requires independent contractors to have either ICEC or self-elected workers’ compensation coverage. Do not classify workers as independent contractors without thorough legal analysis and proper Montana documentation.

Q: Do I need Montana workers’ compensation coverage for remote workers who live in Montana but work for my out-of-state company?

A: According to Montana’s Remote Workforce Toolkit, yes. If employees are performing work from Montana, Montana workers’ compensation coverage is required. Montana must be specifically endorsed in the policy. Consult workers’ compensation specialists and legal counsel.

Wage and Hour Questions

Q: Do I have to pay overtime to salaried employees?

A: It depends. “Salaried” refers to payment method, not overtime exemption status. To be exempt from overtime, employees must meet three tests:

  1. Salary basis (paid predetermined salary)
  2. Salary level (meet minimum threshold)
  3. Duties (perform exempt-level duties)

Simply paying salary does not create exemption. Many salaried employees are entitled to overtime. Consult wage and hour counsel for classification review.

Q: Can I require remote workers to be available outside normal business hours without paying them?

A: This is complex and depends on the degree of restriction. If workers must:

  • Respond immediately to calls/emails
  • Cannot leave home
  • Cannot engage in personal activities

They may be entitled to compensation for on-call time. The more restrictive the requirements, the more likely compensation is required. Consult wage and hour counsel for on-call policies.

Q: Do I have to reimburse remote workers for internet and phone expenses?

A: Montana law requires reimbursement of necessary business expenses if failure to reimburse would reduce worker’s pay below minimum wage. For most remote workers, some reimbursement may be necessary. Many employers provide stipends or allowances. Consult legal counsel for compliant reimbursement policies.

Tax Questions

Q: If I live in Montana but work remotely for a company in another state, do I owe Montana income tax?

A: Generally yes. Montana residents typically must pay Montana income tax on all income, regardless of where employer is located. You may also owe tax to the state where work is performed or where employer is located. You can generally claim credit for taxes paid to other states. Consult tax professional for multi-state tax situations.

Q: As an out-of-state employer, do I have to withhold Montana taxes for my Montana remote worker?

A: Generally yes. Employers typically must withhold state income tax for the state where work is performed. If employee is working from Montana, you likely must:

  • Register with Montana Department of Revenue
  • Withhold Montana income tax
  • File Montana withholding returns

Consult tax professional for multi-state withholding obligations.

Termination Questions

Q: Can I fire an employee for any reason in Montana?

A: It depends on how long they’ve worked for you. Montana’s Wrongful Discharge from Employment Act provides:

During probationary period (typically 6-12 months): Employment is at-will and can be terminated for any legal reason

After probationary period: Termination requires “good cause” – legitimate, job-related reasons such as:

  • Poor performance
  • Misconduct
  • Business necessity

Montana is unique in this protection. Consult employment counsel before terminating non-probationary employees.

Q: What is “good cause” for termination under Montana law?

A: According to Montana law, “good cause” means “reasonable job-related grounds for dismissal based on a failure to satisfactorily perform job duties, disruption of the employer’s operation, or other legitimate business reason.”

Examples may include:

  • Documented poor performance
  • Violation of company policies
  • Misconduct
  • Business closure or reduction in force

“Good cause” is fact-specific and may be subject to legal dispute. Document performance issues and consult legal counsel before termination decisions.

Workers’ Compensation Questions

Q: If a remote worker is injured at home while working, is it covered by workers’ compensation?

A: It depends on the specific facts. Workers’ compensation generally covers injuries “arising out of and in the course of employment.” For home office injuries, relevant factors may include:

  • Was employee engaged in work activity?
  • Did injury occur during work hours?
  • Did injury occur in designated work area?
  • Was activity for employer’s benefit?

Each case is unique and requires factual analysis by workers’ compensation insurer and potentially Montana’s Workers’ Compensation Court. Report injuries promptly and consult workers’ compensation specialists.

Q: Do I need to provide safety training for remote workers?

A: While there are no specific Montana requirements for remote worker safety training, employers should consider:

  • Ergonomic guidance
  • Safe practices for home offices
  • Electrical safety
  • Workers’ compensation implications

Providing safety guidance may reduce injury risk and demonstrate good faith efforts.

Leave and Benefits Questions

Q: Do I have to provide paid sick leave in Montana?

A: No. Montana does not have a state-wide paid sick leave mandate. Employers may choose to provide paid sick leave voluntarily. If provided, employers should follow their stated policies consistently.

Q: Am I required to provide maternity leave?

A: Under the Montana Maternity Leave Act, female employees who have worked for the same employer for at least one year are entitled to up to 6 weeks of unpaid maternity leave. Employers must allow employee to return to same or similar position.

Federal FMLA may also apply if:

  • Employer has 50+ employees within 75 miles
  • Employee has worked 1,250 hours in past 12 months
  • Employee has worked for employer for 12 months

Consult employment counsel for leave obligations.

Information in this guide was compiled in December 2025 and may not reflect subsequent changes.

Always verify current law before making decisions.

Others

Wyoming
Idaho
North Dakota
South Dakota
Colorado

Legal Disclaimer: This guide provides general background information only and does not constitute legal, tax, or professional advice. Employment laws are complex and subject to interpretation. Consult licensed legal counsel and official state agencies for guidance specific to your situation.