What to know about workers' compensation in Montana

Workers’ compensation, which can provide cash and medical care to employees injured on the job, and benefits to survivors in cases of a work-related death, began with a federal program in 1908. It gave benefits to civilian workers whose jobs were hazardous and became the first kind of social insurance established across the United States.

By 1916, the rest of the federal workforce was covered. States meanwhile were enacting their workers’ compensation laws. All but six states and the District of Columbia had them by 1921.

Today, programs exist in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

The details of each program vary by state. Four states—Ohio, North Dakota, Washington and Wyoming—require insurance be obtained through a state-administered fund rather than through a private insurer. Another option is to self-insure for approved businesses. Most states require some businesses to provide coverage and can levy substantial fines for failing to comply. South Dakota and Texas leave the choice to businesses, although Texas makes an exception for construction companies with a government contract.

Simply Business reviewed rules, statistics, and other information about workers’ compensation insurance—including the comprehensive breakdown by the National Federation of Independent Business—to offer a breakdown of what workers’ comp requirements in each state. Rules are subject to updates periodically, so it’s important to stay up-to-date based on your trade and location.

Workers' Compensation in Montana

Not only must all employers have workers’ compensation insurance for all employees, but in the construction industry, that includes nonresidents of the state while they are working in Montana.

However there are a number of exceptions. They include licensed barbers; some cosmetologists; those who sell insurance, real estate, and securities, if they are paid by commission; newspaper carriers; freelance workers; servants; casual employees; and petroleum land professionals. Sole proprietors can opt out. Montana sets fines at $200, or twice the premium on the past three-year payroll while the employee was uninsured, whichever is greater. It offers a state-administered fund.

Workers’ Compensation Benefits, Costs, and Coverage, an October 2021 report from the National Academy of Social Insurance, found that total benefits paid to employees rose by 0.4% nationwide from 2015 to 2019. Cash benefits rose by 2%, but medical benefits fell by 1.1%. Standardized benefits fell— cash by 14% and medical benefits by 16.7%—over the same period.

Keep reading to see what workers' compensation looks like for other states in your area.

Workers' Compensation in Idaho

Coverage is required for employers with one or more employees, whether full-time, part-time, occasional, or seasonal. Some exemptions: sole proprietors and certain relatives living in the employer's household, agricultural pilots, real estate salespeople who get paid solely on commission, domestic workers, and casual employees whose work is unrelated to the employer’s business. Fines for failing to acquire coverage can be $2 a day for each employee or $25 a day, whichever is higher. If a worker is injured, the employer may be liable for the medical costs and wages lost, plus a 10% penalty and attorneys fees, if applicable. Idaho offers a state-administered fund.

Workers' Compensation in North Dakota

North Dakota requires workers’ compensation insurance of all employers, but it does have certain exemptions. They include verified ranch and farm laborers, household workers, and independent contractors; and the employer’s children under 22. Employers without workers’ compensation insurance may face a $10,000 penalty and $100 a day penalty for each day the violation continues. A general contractor or a subcontractor who willfully uses services of  a subcontractor under a cease-and-desist order could face a penalty of $5,000 and $100 a day for each day the violation occurs. All coverage must be obtained through the state-administered fund.