Hiring New Employees in Montana: Legal Guidelines for Employers
Montana employers must navigate specific state employment laws when hiring new staff, including unique "wrongful discharge" protections and restrictions on certain pre-employment inquiries. Montana is also an "employment-at-will" state with exceptions that provide workers stronger protections than many other states.
Montana has distinctive employment laws that differ significantly from other states, particularly regarding probationary periods and termination rights. Failure to comply with Montana's specific hiring requirements can expose employers to legal liability and potential wrongful discharge claims.
Key Considerations
Scenarios
Decisions
Scenarios
Decisions
Scenarios
Decisions
Relevant Documents
Employee Handbook
A comprehensive document outlining company policies, procedures, work rules, benefits, and expectations. Provides important information to new employees and serves as a reference for all staff.
Employment Application Form
A standardized form for collecting information from job applicants including work history, education, skills, and references. This helps employers make informed hiring decisions and serves as documentation of the hiring process.
Employment Contract
A comprehensive legal agreement between employer and employee detailing all terms and conditions of employment including duties, compensation, benefits, termination procedures, and confidentiality requirements.
Employment Offer Letter
A formal document outlining the terms of employment including position, salary, benefits, start date, and other conditions. This establishes clear expectations and serves as evidence of the employment agreement.
Non-Compete Agreement
A contract that restricts an employee from working for competitors or starting a competing business for a specified period after employment ends. Enforceability varies significantly by state.
Non-Disclosure Agreement
Protects your confidential information, trade secrets, and intellectual property that you may need to share with the manufacturer during the course of your relationship. This should be signed before detailed discussions begin.
Relevant Laws
Montana Wrongful Discharge from Employment Act
Montana is the only state that does not follow the at-will employment doctrine. This law provides that after a probationary period (typically 6 months unless otherwise specified), employees can only be terminated for good cause. Employers must establish clear policies and follow them when terminating employees.
Montana Human Rights Act
Prohibits discrimination in employment based on race, creed, religion, color, national origin, age, physical or mental disability, marital status, sex, or pregnancy. Employers must ensure their hiring practices do not discriminate against protected classes.
Montana Minimum Wage Law
Establishes minimum wage requirements for Montana employers. As of 2023, Montana's minimum wage is $9.95 per hour, which is higher than the federal minimum wage. Employers must comply with this state-specific wage requirement.
Montana Workers' Compensation Act
Requires most employers to carry workers' compensation insurance to cover employees who are injured on the job. Employers must obtain coverage before hiring employees or face significant penalties.
New Hire Reporting Requirements
Montana employers must report all newly hired or rehired employees to the Montana Department of Labor and Industry within 20 days of hire. This information is used for child support enforcement and to prevent unemployment insurance fraud.
Montana Unemployment Insurance Law
Employers must register with the Montana Department of Labor and Industry's Unemployment Insurance Division and pay unemployment insurance taxes on employee wages. This provides temporary financial assistance to workers who lose their jobs through no fault of their own.
E-Verify in Montana
While Montana does not mandate E-Verify use for private employers, all employers must complete federal I-9 forms to verify employment eligibility. State agencies and state contractors are required to use E-Verify under Executive Order 2018-04.
Regional Variances
Major Cities in Montana
As Montana's largest city, Billings may have additional local business licensing requirements beyond state regulations. Employers should check with the Billings City Clerk's office for any city-specific employment ordinances or business permits needed when hiring new employees.
Missoula has enacted certain progressive employment ordinances that may exceed state requirements. For example, Missoula has specific regulations regarding background checks and may have additional requirements for certain industries. Employers should consult the Missoula Municipal Code when establishing hiring practices.
Bozeman's rapid growth has led to a competitive hiring market with unique challenges. While it follows state employment laws, the high cost of living may impact wage considerations. Additionally, Bozeman has specific zoning requirements that may affect home-based businesses or certain commercial operations when hiring employees.
Tribal Jurisdictions
Employers operating within the Blackfeet Reservation may be subject to both Montana state law and Blackfeet Tribal Employment Rights Ordinances (TERO). These may include Indian preference in hiring requirements and special permitting for non-tribal businesses operating on reservation land.
The Crow Tribe maintains its own employment regulations through its TERO office. Businesses operating on the Crow Reservation may need to register with tribal authorities and may be subject to tribal employment taxes and hiring preferences for tribal members.
Employers on the Flathead Reservation should be aware of the Confederated Salish and Kootenai Tribes' employment regulations, which may include tribal member hiring preferences and specific business licensing requirements that differ from state regulations.
Rural Counties
While following state employment laws, Gallatin County's proximity to Yellowstone National Park creates seasonal employment patterns that may affect hiring practices and compliance with seasonal worker regulations. The county may have specific requirements for tourism-related businesses.
As home to Billings and Montana's economic hub, Yellowstone County has more developed employment resources but may also have stricter enforcement of employment regulations. The county may have additional requirements for certain industries like healthcare, energy, or agriculture.
This rural county in western Montana may have fewer local employment regulations, but employers should be aware of potential challenges related to worker housing and transportation in this less densely populated area. Agricultural employers in particular should ensure compliance with both state and federal agricultural worker protections.
Suggested Compliance Checklist
Create a compliant job posting
1 days after startingCreate a job posting that complies with Montana employment laws. Avoid discriminatory language based on protected characteristics including race, color, religion, national origin, sex, age, disability, marital status, or political beliefs. Montana law prohibits employers from requesting salary history information from applicants.
Prepare Employment Application Form
1 days after startingCreate an employment application form that collects necessary information while complying with Montana laws. Do not include questions about age, race, religion, national origin, disability, marital status, or other protected characteristics. Montana prohibits employers from asking about criminal history on initial job applications (ban-the-box law).
Conduct interviews and select candidate
14 days after startingWhen interviewing candidates, ensure questions are job-related and non-discriminatory. Document the selection process and reasons for hiring decisions to protect against potential discrimination claims.
Prepare Employment Offer Letter
15 days after startingDraft an offer letter that includes position title, start date, compensation, benefits, employment classification (exempt/non-exempt), at-will employment statement (Montana has unique wrongful discharge laws), and any contingencies such as background checks or drug testing.
Prepare Employment Contract (if applicable)
15 days after startingIf using a formal employment contract rather than at-will employment, draft a contract that clearly outlines terms of employment, duties, compensation, benefits, term of employment, and termination conditions. Note that Montana's Wrongful Discharge from Employment Act provides more protections to employees than most states after a probationary period.
Prepare Non-Disclosure Agreement
15 days after startingDraft a non-disclosure agreement to protect confidential business information. Ensure it is reasonable in scope and duration to be enforceable under Montana law.
Prepare Non-Compete Agreement (if applicable)
15 days after startingIf using a non-compete agreement, ensure it is narrowly tailored in terms of geographic scope, duration, and prohibited activities. Montana courts generally disfavor non-compete agreements and will only enforce them if they are reasonable and necessary to protect legitimate business interests.
Prepare Background Check Authorization Form
15 days after startingCreate a form that complies with the Fair Credit Reporting Act (FCRA) and Montana law. The form must be clear, conspicuous, and standalone (not part of the employment application). Obtain written consent before conducting background checks.
Verify employment eligibility (Form I-9)
18 days after startingFederal law requires completion of Form I-9 to verify identity and employment authorization. The employee must complete Section 1 by their first day of work. Employers must complete Section 2 within 3 business days of the employee's first day. Retain I-9 forms for the later of 3 years after hire date or 1 year after termination.
Collect tax withholding information (Form W-4)
18 days after startingHave the employee complete a federal W-4 form to determine federal income tax withholding. Keep this form in the employee's personnel file.
Collect Montana state tax withholding information
18 days after startingHave the employee complete Montana Form MW-4 for state income tax withholding purposes.
Set up Direct Deposit (if offered)
18 days after startingIf offering direct deposit, have the employee complete a direct deposit authorization form. Montana law allows employers to require direct deposit as a condition of employment.
Collect Emergency Contact Information
18 days after startingHave the employee provide emergency contact information to be used in case of workplace emergencies or accidents.
Enroll employee in benefits programs
18 days after startingIf offering benefits such as health insurance, retirement plans, or paid time off, provide the necessary enrollment forms and information. Explain waiting periods and eligibility requirements.
Report new hire to Montana Department of Labor and Industry
20 days after startingMontana law requires employers to report all newly hired or rehired employees to the Montana Department of Labor and Industry within 20 days of hire. This can be done online through the Montana New Hire Reporting Center or by submitting a New Hire Reporting Form.
Provide Employee Handbook
18 days after startingProvide the employee with an employee handbook that outlines company policies, procedures, and expectations. Include information on Montana-specific laws such as meal breaks (Montana has no specific requirements but follows federal guidelines), paid sick leave (not mandated in Montana), and the Wrongful Discharge from Employment Act. Have the employee sign an acknowledgment of receipt.
Display required workplace posters
18 days after startingMontana employers must display certain posters in the workplace, including federal posters (FLSA, FMLA, OSHA, etc.) and Montana-specific posters such as the Montana Human Rights Bureau poster, Workers' Compensation poster, and Unemployment Insurance poster. These can be obtained from the Montana Department of Labor and Industry.
Obtain workers' compensation insurance
18 days after startingMontana law requires employers to carry workers' compensation insurance. Register with the Montana State Fund or obtain coverage through a private insurer approved to write workers' compensation in Montana.
Register for unemployment insurance
18 days after startingRegister with the Montana Department of Labor and Industry's Unemployment Insurance Division if not already registered. Employers must pay unemployment insurance taxes on employee wages.
Conduct new employee orientation
18 days after startingProvide orientation for the new employee covering company policies, safety procedures, job responsibilities, and workplace expectations. Document the orientation process.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Create a compliant job posting | Create a job posting that complies with Montana employment laws. Avoid discriminatory language based on protected characteristics including race, color, religion, national origin, sex, age, disability, marital status, or political beliefs. Montana law prohibits employers from requesting salary history information from applicants. | - | 1 |
| Prepare Employment Application Form | Create an employment application form that collects necessary information while complying with Montana laws. Do not include questions about age, race, religion, national origin, disability, marital status, or other protected characteristics. Montana prohibits employers from asking about criminal history on initial job applications (ban-the-box law). | Employment Application Form | 1 |
| Conduct interviews and select candidate | When interviewing candidates, ensure questions are job-related and non-discriminatory. Document the selection process and reasons for hiring decisions to protect against potential discrimination claims. | - | 14 |
| Prepare Employment Offer Letter | Draft an offer letter that includes position title, start date, compensation, benefits, employment classification (exempt/non-exempt), at-will employment statement (Montana has unique wrongful discharge laws), and any contingencies such as background checks or drug testing. | Employment Offer Letter | 15 |
| Prepare Employment Contract (if applicable) | If using a formal employment contract rather than at-will employment, draft a contract that clearly outlines terms of employment, duties, compensation, benefits, term of employment, and termination conditions. Note that Montana's Wrongful Discharge from Employment Act provides more protections to employees than most states after a probationary period. | Employment Contract | 15 |
| Prepare Non-Disclosure Agreement | Draft a non-disclosure agreement to protect confidential business information. Ensure it is reasonable in scope and duration to be enforceable under Montana law. | Non-Disclosure Agreement | 15 |
| Prepare Non-Compete Agreement (if applicable) | If using a non-compete agreement, ensure it is narrowly tailored in terms of geographic scope, duration, and prohibited activities. Montana courts generally disfavor non-compete agreements and will only enforce them if they are reasonable and necessary to protect legitimate business interests. | Non-Compete Agreement | 15 |
| Prepare Background Check Authorization Form | Create a form that complies with the Fair Credit Reporting Act (FCRA) and Montana law. The form must be clear, conspicuous, and standalone (not part of the employment application). Obtain written consent before conducting background checks. | Background Check Authorization Form | 15 |
| Verify employment eligibility (Form I-9) | Federal law requires completion of Form I-9 to verify identity and employment authorization. The employee must complete Section 1 by their first day of work. Employers must complete Section 2 within 3 business days of the employee's first day. Retain I-9 forms for the later of 3 years after hire date or 1 year after termination. | Form I-9 Employment Eligibility Verification | 18 |
| Collect tax withholding information (Form W-4) | Have the employee complete a federal W-4 form to determine federal income tax withholding. Keep this form in the employee's personnel file. | Form W-4 Employee's Withholding Certificate | 18 |
| Collect Montana state tax withholding information | Have the employee complete Montana Form MW-4 for state income tax withholding purposes. | State Tax Withholding Form | 18 |
| Set up Direct Deposit (if offered) | If offering direct deposit, have the employee complete a direct deposit authorization form. Montana law allows employers to require direct deposit as a condition of employment. | Direct Deposit Authorization Form | 18 |
| Collect Emergency Contact Information | Have the employee provide emergency contact information to be used in case of workplace emergencies or accidents. | Emergency Contact Information Form | 18 |
| Enroll employee in benefits programs | If offering benefits such as health insurance, retirement plans, or paid time off, provide the necessary enrollment forms and information. Explain waiting periods and eligibility requirements. | Benefits Enrollment Forms | 18 |
| Report new hire to Montana Department of Labor and Industry | Montana law requires employers to report all newly hired or rehired employees to the Montana Department of Labor and Industry within 20 days of hire. This can be done online through the Montana New Hire Reporting Center or by submitting a New Hire Reporting Form. | New Hire Reporting Form | 20 |
| Provide Employee Handbook | Provide the employee with an employee handbook that outlines company policies, procedures, and expectations. Include information on Montana-specific laws such as meal breaks (Montana has no specific requirements but follows federal guidelines), paid sick leave (not mandated in Montana), and the Wrongful Discharge from Employment Act. Have the employee sign an acknowledgment of receipt. | Employee Handbook | 18 |
| Display required workplace posters | Montana employers must display certain posters in the workplace, including federal posters (FLSA, FMLA, OSHA, etc.) and Montana-specific posters such as the Montana Human Rights Bureau poster, Workers' Compensation poster, and Unemployment Insurance poster. These can be obtained from the Montana Department of Labor and Industry. | - | 18 |
| Obtain workers' compensation insurance | Montana law requires employers to carry workers' compensation insurance. Register with the Montana State Fund or obtain coverage through a private insurer approved to write workers' compensation in Montana. | - | 18 |
| Register for unemployment insurance | Register with the Montana Department of Labor and Industry's Unemployment Insurance Division if not already registered. Employers must pay unemployment insurance taxes on employee wages. | - | 18 |
| Conduct new employee orientation | Provide orientation for the new employee covering company policies, safety procedures, job responsibilities, and workplace expectations. Document the orientation process. | - | 18 |
Frequently Asked Questions
As of 2023, Montana's minimum wage is $9.95 per hour. This rate is adjusted annually for inflation. Employers must pay this rate to all employees, with limited exceptions such as certain agricultural workers, casual babysitters, and some student learners.
Montana does not require written employment contracts for most positions. However, having a written agreement is recommended as it clarifies expectations and can help avoid disputes. Montana is unique as the only state with a Wrongful Discharge from Employment Act, which provides protections to employees even without written contracts.
When hiring in Montana, you must complete federal I-9 (employment eligibility verification), W-4 (tax withholding), and Montana-specific forms including MW-4 (state tax withholding) and UI-1 (unemployment insurance registration). New hires must also be reported to the Montana Department of Labor and Industry within 20 days.
Montana is the only state that is not fully at-will. After a probationary period (typically 6 months unless otherwise specified), employers can only terminate employees for 'good cause' under the Montana Wrongful Discharge from Employment Act. During the probationary period, employment is at-will.
Montana follows federal overtime laws, requiring payment of 1.5 times the regular rate for hours worked beyond 40 in a workweek. Some employees are exempt from overtime requirements, including certain executive, administrative, and professional employees who meet specific salary and duty requirements.
Montana does not have specific laws requiring employers to provide meal or rest breaks to adult employees. However, if breaks are provided, breaks of less than 30 minutes must be paid. Federal laws may apply to nursing mothers, who must be provided reasonable break time to express breast milk.
As a Montana employer, you're responsible for unemployment insurance tax (state), workers' compensation insurance, federal unemployment tax (FUTA), Social Security and Medicare taxes (FICA), and income tax withholding (federal and state). You must register with the Montana Department of Revenue and Department of Labor and Industry.
Yes, Montana requires most employers to carry workers' compensation insurance, with few exceptions. This insurance can be obtained through private insurers, Montana State Fund, or self-insurance (if qualified). Failing to carry required workers' compensation insurance can result in significant penalties.
Montana employers must comply with both federal anti-discrimination laws and the Montana Human Rights Act. These prohibit discrimination based on race, color, national origin, religion, sex (including pregnancy, sexual orientation, and gender identity), disability, age, marital status, and political beliefs. The Montana law applies to employers with one or more employees.
Yes, Montana allows pre-employment drug testing, but with specific requirements. Employers must have a written policy, use reliable testing methods, maintain confidentiality, and follow specific procedures for positive results. Random drug testing of current employees is more restricted and generally requires a legitimate business reason.