Montana
Workers' Comp Exemption

Montana begins at the first covered employee, so an owner's status cannot be used as a head-count exemption

Montana's workers' compensation framework requires an employer with any employee in service to be bound by Plan 1, 2, or 3 unless the particular employment falls within a statutory exemption. The Department's Insurance Compliance unit likewise tells employers that they must provide workers' compensation under the Act.

An owner exclusion therefore answers who is personally inside the policy; it does not authorize the business to leave ordinary employees uninsured. An owner-only operation and an owner-plus-one-employee operation can have very different obligations.

At the first hire, confirm the Montana policy before the employee starts work. Then handle any owner or officer exclusion as a separate payroll/policy question.

An ICEC proves qualifying independent-contractor status; it is not a blanket certificate that exempts a company and its crew

Montana DLI requires a person seeking the independent-contractor safe harbor to be free from the hiring agent's control and engaged in an independently established business. The worker must carry self-elected workers' compensation or obtain an Independent Contractor Exemption Certificate.

The current ICEC application costs $125, is nonrefundable, and is valid for two years. It asks for business documentation and warns that an employee cannot be converted into an independent contractor merely to avoid workers' compensation.

The current DLI application asks for documentation totaling 15 points for each occupation listed and includes the signed waiver of Workers' Compensation Act benefits. The form says notarization is not required on its February 7, 2026 revision. Match the documentation to each occupation and use the agency's current application rather than assuming an older notarization checklist is still current.

If the certificate holder hires employees, those employees still need a workers' compensation policy. The ICEC belongs to the individual's independent-contractor relationship; it does not immunize a growing business from employer coverage.

Sole proprietors, partners, member-managed LLC owners, and manager-managed LLC managers do not all use the same Montana route

DLI's independent-contractor materials identify sole proprietors, working partners, and working members of member-managed LLCs as owner categories that may use the ICEC framework when they perform qualifying independent work for a hiring agent.

A manager of a manager-managed LLC is different. Section 39-71-401 contains a separate officer/manager exemption structure, and current DLI construction materials specifically call out manager-managed LLCs because construction work can remove the ordinary manager exemption and push an uncovered working manager toward the ICEC/coverage route.

Before filing anything, identify whether the LLC is member-managed or manager-managed and whether the owner is actually working at a Montana jobsite. Those two facts can control which lane applies.

Montana's current corporate-officer ownership threshold is 10%, not the older 20% figure found in stale summaries

Current DLI construction-registration guidance says a corporate officer working in Montana is treated as an employee unless the officer qualifies for an exemption, including an ownership route of 10% or more of the corporation's shares. The same material recognizes an aggregation route involving related corporate officers.

The Act also contains other officer/manager paths tied to no ordinary worker duties/no pay or specified household work. A 10% ownership figure is therefore only one route in the statute, not a universal rule that every 10% owner is exempt.

Use current organizational records and current DLI materials. Montana changed the ownership threshold from 20% to 10% in 2023, so older broker charts and archived guidance can now be wrong even when the rest of the explanation looks plausible.

Construction adds registration and jobsite rules that make owner paperwork visible to general contractors

The current Construction Contractor Registration application says construction businesses with employees, as well as manager-managed LLCs and corporations in the covered registration categories, must complete contractor registration. Businesses working in Montana with employees must provide proof of a valid Montana workers' compensation policy.

The same application tells sole proprietors, partners, members of member-managed LLCs, and managers of manager-managed LLCs working on a jobsite that if they are not personally covered, they must have or apply for an active ICEC. That is a much more concrete construction workflow than simply saying 'owners are exempt.'

Jobsite proof should match the owner’s actual Montana status

A contractor should keep three records aligned: the company policy for employees, the construction registration, and the specific ICEC or owner/officer basis for each working principal.

ICEC misuse carries a per-violation penalty, so classification should be rechecked when control or staffing changes

The current ICEC application warns of civil penalties up to $5,000 per violation for performing independent-contractor work without the required ICEC or coverage, using a suspended/revoked certificate, transferring a certificate, or misrepresenting independent status. DLI also warns hiring agents about creating an employee relationship through control.

A valid certificate is not a permanent answer if the facts change. Hiring employees, moving from a fixed business location onto controlled jobsites, changing the LLC management structure, or working under a hiring agent's detailed direction can alter the classification analysis.

Before each two-year ICEC renewal—and sooner after a major operational change—verify the current occupation listed on the certificate, business evidence, jobsite role, and workers' compensation policy status.

What failing to insure actually costs in Montana

Montana's penalty is built around the premium the employer dodged, with a firm floor, plus a separate flat fine for simply missing the 30-day compliance window after being told to get covered.

An uninsured employer faces a penalty of twice the premium owed, with a $200 minimum, and can also face fines up to $1,000 plus $100 for every day out of compliance. A separate $200 penalty applies if the employer doesn't obtain coverage within 30 days of being notified it's required.

If a worker is hurt while the employer is uninsured, the employer is liable for 100% of the medical and wage-loss benefits and must reimburse the Uninsured Employers' Fund for anything it paid on the claim — on top of a $50 late fee for any missed reimbursement or penalty payment.

• Base penalty: 2× the unpaid premium, $200 minimum; separately, up to $1,000 plus $100/day out of compliance
• Missed 30-day compliance window after notice: additional $200 penalty
• Injury while uninsured: 100% liability for benefits, plus full reimbursement to the Uninsured Employers' Fund