Montana Wage Law Explained
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The Montana Labor Laws, contained in the Montana Wage Payment Act, addresses many issues relating to the relationship between employer and employee, including the rules for the payment of wages, overtime pay, final wages, the rules for authorized and unauthorized payroll deductions, and recordkeeping requirements.
Our overtime rights lawyers represent Montana employees who have been subjected to workplace wage and hour violations and take cases on a contingent fee basis – no fee if no recovery of backpay. If you believe you’ve been deprived of the compensation to which you’re legally entitled, please contact the Lore Law Firm.
Montana Wage and Overtime Laws
While Montana does have certain state labor laws that differ from the federal Fair Labor Standards Act (FLSA), the state law applies only in instances where it provides greater rights or protections than federal law. Whichever law (state or federal) is more favorable to the worker will apply.
Minimum Wage
The Montana minimum wage as of 1/1/23 is $9.95 and the federal minimum wage is $7.25 per hour. The Montana minimum wage is subject to a cost-of-living adjustment based on the Consumer Price Index no later than September 30th of each year.
Prior minimum wage rates were:
- 2023: $9.95
- 2022: $9.20
- 2021: $8.75
- 2020: $8.65
- 2019: $8.50
No tip credit, training wage or meal credit is allowed under Montana wage law.
Overtime Pay
Montana state labor laws regarding the payment of overtime are largely consistent with the federal overtime laws. As most employers are covered by the FLSA, generally the FLSA will apply and requires employers to pay time and a-half for all hours worked over 40 per workweek, unless an employee is properly classified as exempt. The Montana Department of Labor & Industry provides listings of the exemptions from both the minimum wage and overtime provisions of the law.
For minimum wage workers in Montana, the overtime pay rate amounts to $12.98 per hour (1.5 x $8.65).
Which Employees Are Entitled to Overtime Pay
Most workers in Montana are entitled to overtime pay when they work more than 40 hours per week. In certain circumstances, however, there are exemptions.
Employees engaged in executive, administrative, or professional capacities (and paid at least $455 per week on a salary basis) are exempt from the overtime requirement. Note that new minimum salary requirements for these overtime exemptions take effect in January 2020 and increase the minimum salary threshold to $684 per week (or $35,568 annually). This change in federal law will also apply to most workers in Montana when making the determination of whether they are classified as exempt or non-exempt from the overtime pay laws.
Find Out Your Overtime Exemption Status
Misclassification of Independent Contractors
Misclassification occurs when a business treats its workers as independent contractors (or subcontractors) rather than employees to avoid legal obligations such as social security taxes, worker’s compensation, unemployment insurance and overtime pay.
While there are situations in which workers are legitimately running their own business and properly treated as independent contractors who are not entitled to receive overtime, employers are not allowed to mischaracterize employee roles to avoid paying overtime compensation.
Merely labeling a worker as an independent contractor, or even entering into a written agreement, is not enough to avoid the labor laws on overtime pay.
There are several factors to be considered in determining if a worker in Montana is an employee or independent contractor (a/k/a 1099 employee)
If properly classified as an independent contractor under Montana law, workers are typically eligible for only the specific compensation bargained for in a contract.
Mandatory Overtime
An employer doesn’t violate overtime laws by requiring employees to work overtime, (ie “mandatory overtime”), as long as they are properly compensated at the premium rate required by law.
Payroll Deductions
Employers are only allowed to deduct certain items from an employee’s wages, such as room, board and other incidentals furnished by the employer as part of the employment agreement.
Wages cannot be withheld for shortages, damages or mistakes.
Wage Payments
Most Montana employees must be paid wages within 10 business days after the end of the pay period.
When an employee quits, wages are due on the next scheduled pay day for the period in which the employee was separated, or 15 calendar days, whichever occurs first.
When an employee is laid off or discharged, all wages are due immediately (within four hours or end of the business day, whichever occurs first), unless the employer has a preexisting, written policy that extends the time for payment. The wages cannot be delayed beyond the next pay day for the period in which the separation occurred, or 15 calendar days, whichever occurs first.
Pay Stubs / Pay Statements
Montana labor laws require an employer provide pay stubs to employees at the time of payment of wages showing all deductions for the pay period, even if the employee has no deductions for such pay period.
Meal and Rest Breaks
The Montana Wage and Hour Laws do not require that employers provide rest periods, coffee breaks, or meal periods to adult employees. This is a benefit that the employer may choose to provide. However, if a break is offered, the break time is considered as paid time. In the case of meal periods, they are not considered paid time if the meal period is half an hour or longer and the employee is completely relieved from duty.
The federal Fair Labor Standards Act does not require that an employer give employees any mandatory rest breaks or meal breaks.
Vacation or Holiday Leave
Montana doesn’t require employers to provide workers with paid or unpaid vacation leave. If an employer does provide vacation pay benefits, once vacation time has been earned in accordance with the terms of its policy, it must be treated as wages and may not be forfeited. This means that “use it or lose it” vacation pay policies are not permitted in Montana. However, employers are able to implement caps, or maximum accumulation amounts which effectively prevent additional vacation to accrue until existing time is utilized.
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Statute of Limitations
Montana’s deadline for filing an overtime claim adheres to the FLSA, which requires those seeking to recover unpaid back overtime wages file a lawsuit within two years from the date of the employer’s wage violation. So, a lawsuit filed today would be able to seek recovery of back overtime for only the prior 2 (sometimes 3) years.
As an example, suppose you believe that your employer has failed to pay you proper overtime wages since January 1, 2016. Waiting until June 1, 2019, to file your lawsuit means you are only allowed to seek unpaid wages from June 1, 2017, to June 1, 2019.
The statute of limitations may be extended to three years if an employer’s violation of the FLSA was willful. An FLSA violation is deemed willful if the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard.
Penalties for Violations
Under federal law, employers who fail to pay proper overtime wages may be liable for up to double the amount of unpaid back wages plus costs and attorney’s fees incurred by employees. These cases can be brought by overtime pay lawyers on a class or collective basis on behalf of all workers who were subjected to the same illegal pay practices.
Montana wage payment law provides a penalty for failure to pay wages when due and payable in an amount up to 110 percent.
Layoffs, Plant Closings and WARN Notices
The Worker Adjustment and Retraining Notification Act (WARN) offers protection to Montana workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. This notice must be provided to either affected workers or their representatives (e.g., a labor union).
An employer who violates the WARN Act by failing to provide appropriate notice is liable to each employee for an amount up to 60 days back pay and benefits for the period of violation.
Lore Law Firm is On Your Side
At the Lore Law Firm, we represent salaried, hourly, and day-rate workers in an array of employment litigation matters, including unpaid overtime compensation claims in Montana. Our attorneys, and the Montana overtime law attorneys we associate with, are passionate about protecting the rights of workers and have helped recover millions of dollars in unpaid overtime wages for our clients.
Contact us for a free and confidential review of your situation
