Nobody ever said running a business was easy. As an employer, you have many things to handle, and compliance is just one of them.
In addition to federal regulations, each state has its own share of employment-related laws that business owners need to be aware of. Here, we’re highlighting some of these key state-specific requirements, and offering guidance to help you keep up.
Bear in mind that this list is not comprehensive, and there may be local or industry-specific employment requirements that your business needs to comply with. It’s best to consult with counsel to ensure compliance with all applicable laws, as Justworks does not provide legal advice.
Payroll Tax Accounts
Because Justworks reports state unemployment taxes on behalf of customers who utilize Justworks’ PEO services, employers will need to close their Montana unemployment and withholding accounts prior to joining the Justworks platform. Linked here are the steps you’ll need to take: Montana - State Unemployment Insurance
Recruiting & Hiring Practices
Posting Requirements
Montana employers are required to post notices to all employees informing them of their rights and responsibilities under state and local laws.
Justworks PEO customers who opt into the compliance poster service offered via Justworks will be provided with most required posters for their office location(s) and remote employee(s). You can read our Help Center article on compliance posters for more information.
Montana Department of Labor and Industry (DLI): Labor Law Posters
Mineral*: Montana Posting Requirements
Wage Notice Requirements
Employers must provide employees with a notice of their pay rate upon hire and upon written demand. The notice must outline the employee’s wages by the hour, day, week, month, or year and it must outline the employee’s pay dates.
Mineral*: Montana Wage Payment
Drug Testing Restrictions
Montana only allows applicant drug and alcohol testing for safety-sensitive positions. Employers may not discriminate or retaliate against employees or candidates that use legal products during off duty time.
Mineral*: Drugs, Alcohol, and Smoking
Independent Contractors
When deciding whether to classify workers as employees or independent contractors, there are a few things your business should consider, including the different tests that apply under different federal and state employment laws, and the potential penalties and other liabilities for misclassifying employees as independent contractors.
You can read our general Help Center article on contractors, and view information on how to determine if someone is a contractor or employee in Montana] in the relevant section at the link below.
Mineral*: Montana Independent Contractors
Pay Requirements
Minimum Wage & Overtime
Montana’s minimum wage requirement is higher than the federal minimum wage. Overtime requirements are generally in line with federal overtime requirements.
Mineral*: Montana Minimum Wage and Overtime
Montana DLI: Wage and Hour FAQs
Leave
Montana does not require employers to provide employees with paid time off, vacation benefits, or sick leave. However, if you choose to provide these benefits, you must comply with the terms of your established policies.
Harassment & Discrimination
In addition to protections under Federal law, Montana law prohibits employment discrimination based on membership in any protected class by employers covered under Montana’s anti-discrimination laws.
Montana DLI: Employment Discrimination
Mineral*: Montana Employment Discrimination and Accommodations
Separation
If you'd like to know how to separate an employee in Justworks, please visit our Help Center resource on Terminating Employees.
At-Will Employment
Montana is not considered an employment at-will state due to probationary period provisions outlined in the state’s Wrongful Discharge from Employment Act (WDEA). The WDEA allows employers to separate with employees at any time, for any legal reason during their designated probationary period. Employers may establish a probationary period for their organization as long as it’s clearly communicated upon hire and probationary periods cannot exceed 18 months.
Separation following the employee’s designated probationary period must be for “good cause,” which might include misconduct, policy violations, economic necessity (layoffs), or poor performance. Employers are encouraged to document any issues leading up to the separation, such as performance reviews or disciplinary actions, to support their case if the separation reason is challenged.
Mineral*: Montana Separation
Montana DLI: Wage and Hour FAQs
Separation Pay & Document Requirements
Employers must provide employees with a letter of discharge upon demand by the employee and the letter must include a written reason for the discharge. The letter should not include details that may negatively impact the employee’s ability to obtain work for another employer.
Montana employers should create a policy that outlines final pay expectations for separating employees. Montana employers may have a policy that extends final payment to the next regular payday following the termination, or within 15 days of the employee’s last day (whichever is sooner). Without a policy, employers must provide final pay to involuntarily separating employees immediately.
Resigning employees may be paid within 15 days of their last workday, or by the next regular payday, whichever is sooner.
Accrued and unused vacation time must be paid out to Montana employees upon termination. Paid Time Off (PTO) policies are not subject to the same regulations as vacation pay and accrued and unused PTO can be forfeited.
Mineral*: Montana Separation
Montana DLI: Wage and Hour FAQs
Business Closings and Layoffs
The Federal Worker Adjustment and Retraining Notification (WARN) Act imposes certain notice requirements and other obligations on covered businesses before conducting large-scale business closures, layoffs, or relocations. For more information, visit the link below.
US Department of Labor (DOL): Worker Adjustment and Retraining Notification (WARN) Act Advisor
US DOL: Plant Closings and Layoffs (WARN)
Montana DLI: Warn Notice Page
Mineral*: Montana Layoffs
Notes
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Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.