Wage Payment Law Summaries
Montana, Wage Payment Law Summaries
Montana's wage payment law is located in the Montana Code Annotated at Title 39, Chapter 3, Part 2. The full text of this law is available beginning at Wages-Hours ¶27-46,001 .
DEFINITIONS
“Employee” includes any person who works for another for hire (Sec. 39-3-201, as amended by Ch. 479, L. 1995).
“Employ” means to permit or suffer to work (Sec. 39-3-201, as amended by Ch. 479, L. 1995).
“Employer” includes any individual, partnership, association, corporation, business trust, legal representative, or organized group of persons acting directly or indirectly in the interest of an employer in relation to an employee but does not include the United States (Sec. 39-3-201, as amended by Ch. 479, L. 1995).
“Wages” includes any money due an employee from the employer or employers, whether to be paid by the hour, day, week, semimonthly, monthly, or yearly, and includes bonus, piecework, and all tips and gratuities covered by Sec. 3402 of the Internal Revenue Code and service charges that are covered by Sec. 3401 of the Internal Revenue Code that are received by employees for services rendered by them to patrons of premises or businesses licensed to provide food, beverage or lodging (Sec. 39-3-201, as amended by Ch. 479, L. 1995).
“Service charge” means an arbitrary fixed charge added to the customer's bill by an employer in lieu of a tip. It is collected by the employer and must be distributed directly to the nonmanagement employee preparing or serving the food or beverage or to any other employee involved in related services, pursuant to a tip pool agreement (Sec. 39-3-201, as amended by Ch. 479, L. 1995).
COVERAGE
Montana's wage payment law covers any individual, partnership, association, corporation, business trust, legal representative, or organized group of persons acting directly or indirectly in the interest of an employer in relation to an employee (Sec. 39-3-201, as amended by Ch. 479, L. 1995).
EXCEPTIONS
Montana's wage payment law does not cover the United States (Sec. 39-3-201, as amended by Ch. 479, L. 1995).
PROCEDURES
Enforcement.- When the Department of Labor determines that a wage claim is valid, the department will mail the determination to the parties. If a party appeals the department's determination within 15 days after the determination is mailed by the department, a hearing will be conducted (Sec. 39-3-216, as amended by Ch. 90, L. 1995).
The decision of the hearings officer is final unless further review is initiated pursuant to Sec. 39-3-217 (see below) within 15 days after the decision is mailed to each party. The period may be extended by the board for good cause (Sec. 39-3-216, as amended by Ch. 90, L. 1995).
If a party is aggrieved by the decision of the hearings officer, the party may appeal the decision to the Board of Personnel Appeals. When a decision is rendered by the board, the board must mail copies of the decision to each interested party and to the department. The decision is final unless an aggrieved party requests a rehearing or initiates judicial review by filing a petition in district court within 30 days of the date of mailing of the board's decision (Sec. 39-3-217, as amended by Ch. 90, L. 1995).
If the Department of Labor determines that a wage claim is valid and the employer does not appeal the determination, the department may enter a default order against the employer for the amount of wages due and for any penalty assessed pursuant to Sec. 39-3-206 (Sec. 39-3-216, as amended by Ch. 90, L. 1995).
A Department of Labor default order, a decision of the hearings officer, if the decision is not appealed to the Board of Personnel Appeals, or a decision of the board, if judicial review is not sought, may be enforced by application by the Commissioner of Labor to a district court for an order or judgment enforcing the decision (Sec. 39-3-212, as amended by Ch. 90, L. 1995).
If judicial review is sought, the district court may issue an order or a judgment enforcing the decision of the board in a wage claim proceeding (Sec. 39-3-212, as amended by Ch. 90, L. 1995).
WHAT THE EMPLOYER MUST DO
Form of payment.- Every employer in Montana must pay to each employee the wages earned by the employee in lawful money of the United States or checks on banks convertible into cash on demand at the full face value of the checks (Sec. 39-3-204, as amended by H. 230, L. 2003, effective April 14, 2003).
Frequency of payment/timesheets/pay periods.- A person for whom labor has been performed may not withhold from any employee any wages earned or unpaid for a longer period than 10 business days after the wages are due and payable. If an employee submits a timesheet after the employer's established deadline for processing employee timesheets for a particular time period and the employer does not pay the employee within the 10-day period provided for just above, the employer may pay the employee the wages due in the ensuing pay period. An employer may not withhold payment of the employee's wages beyond the next ensuing pay period. If there is not an established time period or time when wages are due and payable, the pay period is presumed to be semimonthly in length (Sec. 39-3-204, as amended by H. 230, L. 2003, effective April 14, 2003).
Termination payments.-Private and public employers.- Employers must pay employees separating from employment all unpaid wages on the next regular payday for the pay period during which the separation occurred of 15 days from the date of separation, whichever occurs first. Final payment must be made either through regular pay channels or by mail if requested by the employee. Employers must pay employees separated for cause or laid off all unpaid wages due immediately upon separation, unless a written personnel policy extends the time to the next regular payday or 15 days from the separation, whichever occurs first. Special provisions apply for employees discharged due to allegations of theft of employer funds or property (Sec. 39-3-205).
Employees dismissed for good cause are not entitled to compensation for services rendered since the last day a payment became due under a contract (Sec. 39-3-102). Employees who quit for good cause are entitled to compensation due for services already rendered in proportion to services that were to be rendered for full performance (Sec. 39-3-103).
Public employers.- It is unlawful for an employer to terminate or separate an employee from employment in an attempt to circumvent the provisions of Sec. 2-18-611, 2-18-612 and 2-18-614 (all relating to vacation leave). If a question arises under this subsection, it must be submitted to arbitration as provided in Title 27, Ch. 5, as if an agreement described in Sec. 27-5-114 is in effect, unless there is an applicable collective bargaining agreement to the contrary (Sec. 2-18-621(1), as amended by Ch. 61 (S. 40) and Ch. 341 (S. 219), L. 2007).
An employee who terminates employment is only entitled to receive (Sec. 2-18-621(2)(a), as added by Ch. 341 (S. 219), L. 2007):
payments for accumulated wages, vacation leave as provided in Sec. 2-18-617 (see just below), sick leave as provided in Sec. 2-18-618, and compensatory time earned as provided in the rules or policies of the employer; and
if the termination is the result of a reduction in force, severance pay and a retraining allowance.
An employee who terminates employment may not receive severance pay, a bonus, or any other type of monetary payment not described in items (1) and (2) just above (Sec. 2-18-621(2)(b), as added by Ch. 341 (S. 219), L. 2007).
Section 2-18-621(2) just above does not apply to (Sec. 2-18-621(3), as added by Ch. 341 (S. 219), L. 2007):
retirement benefits;
a payment, settlement, award or judgment that involves a potential or actual cause of action, legal dispute, claim, grievance, contested case, or lawsuit; or
any other payment authorized by law.
Employers must pay cash compensation for unused vacation to employees terminating for reasons not reflecting discredit on the employees, assuming the employees have worked for the qualifying period. However, if an employee transfers between agencies of the same jurisdiction, cash compensation may not be paid for unused vacation (Sec. 2-18-617).
Direct deposit.- Wages may be paid to employees by electronic funds transfer or similar means of direct deposit if the employee consents in writing or electronically, if a record is retained, to be paid in this manner. However, an employee may not be required to use electronic funds transfer or similar means of direct deposit as a method for payment of wages (Sec. 39-3-204, as amended by H. 230, L. 2003, effective April 14, 2003).
Deductions from wages.- A person for whom labor has been performed may not withhold from any employee any wages earned or unpaid for a longer period than 10 business days after the wages are due and payable, except when an employee is discharged from employment for alleged theft. However, reasonable deductions may be made for board, room, and other incidentals supplied by the employer, whenever the deductions are a part of the conditions of employment, or as otherwise provided for by law (Sec. 39-3-204, as amended by H. 101, L. 2009, effective March 20, 2009).
Where there is an allegation of employee theft. -If an employee is discharged by reason of allegation of theft of property or funds connected to the employee's work, the employer may withhold from the employee's final paycheck an amount sufficient to cover the value of the theft if (a) the employee agrees in writing to the withholding or (b) the employer files a report with the local law enforcement agency within seven business days of the separation from employment, subject to the following conditions: (1) if no charges are filed in a court of competent jurisdiction against the employee for the alleged theft within 30 days of the filing of the report, wages are due and payable upon expiration of the 30-day period; (2) if charges are filed against the employee for theft, the court may order the withheld wages to be offset by the value of the theft. If the employee is found not guilty or if the employer withholds an amount in excess of the theft, the court may order the employer to pay the employee the withheld amount plus interest (Sec. 39-3-205, as amended by H. 101, L. 2009, effective March 20, 2009).
Vacation pay upon termination (public employees).- An employee who terminates employment for a reason not reflecting discredit on the employee is entitled upon the date of termination to cash compensation for unused vacation leave, assuming that the employee has worked the qualifying period. However, if an employee transfers between agencies of the same jurisdiction, cash compensation may not be paid for unused vacation leave (Sec. 2-18-617(2) and (3), as amended by Ch. 143 (H. 470), L. 1997). See also “Termination payments,” “Public employers,” above.
Wage statements.-Private and public employers.- With each payment of wages, employers must furnish employees with an itemized statement of deductions for state and federal income taxes, social security and other deductions, along with the amount for each. If no deductions are made, a statement indicating that payment does not include any deductions is required (Sec. 39-3-101).
Unfair agreements.- Any contract or agreement made between an employer and an employee the provisions of which violate, evade, or circumvent Montana's wage payment law is unlawful and void (Sec. 39-3-208).
Payment of deceased employees.-Public employers.- An employee of a Montana county or municipality may designate a person who is entitled, upon the death of the employee, to receive all paychecks that would have been payable to the employee. Upon sufficient proof of identity, the paycheck will be reissued to the designated person (Sec. 7-4-4211).
NOTICE
Each employer or an authorized representative of the employer must, on written demand, prior to the commencing of work, notify each employee as to the rate of wages to be paid, whether by the hour, day, week, month, or year, and date of paydays. Notice must be in writing to each employee or by posting of notice in a conspicuous place. An employer who has entered into a signed collective bargaining agreement need not follow these notification procedures when such agreement contains conditions of employment, wages to be received, and hours to be worked. Employers engaged in agriculture or stockraising are also exempt from the notification provisions (Sec. 39-3-203).
ENFORCEMENT
The Commissioner of Labor enforces Montana's wage payment law (Sec. 39-3-209).
County attorneys may also prosecute actions, both civil and criminal, for violations of Montana's wage payment law as may come to their knowledge, and they may enforce the law independently and without specific direction of the Commissioner of Labor (Sec. 39-3-215).
Hearings.- When the Department of Labor determines that a wage claim is valid, the department will mail the determination to the parties. If a party appeals the department's determination within 15 days after the determination is mailed by the department, a hearing will be conducted (Sec. 39-3-216, as amended by Ch. 90, L. 1995).
The decision of the hearings officer is final unless further review is initiated pursuant to Sec. 39-3-217 (see below) within 15 days after the decision is mailed to each party. The period may be extended by the board for good cause (Sec. 39-3-216, as amended by Ch. 90, L. 1995).
If a party is aggrieved by the decision of the hearings officer, the party may appeal the decision to the Board of Personnel Appeals. The hearing before the board is for review only. When a decision is rendered by the board, the board must mail copies of the decision to each interested party and to the department. The decision is final unless an aggrieved party requests a rehearing or initiates judicial review by filing a petition in district court within 30 days of the date of mailing of the board's decision (Sec. 39-3-217, as amended by Ch. 90, L. 1995).
Default orders.- If the Department of Labor determines that a wage claim is valid and the employer does not appeal the determination, the department may enter a default order against the employer for the amount of wages due and for any penalty assessed pursuant to Sec. 39-3-206 (Sec. 39-3-216, as amended by Ch. 90, L. 1995).
A Department of Labor default order, a decision of the hearings officer, if the decision is not appealed to the Board of Personnel Appeals, or a decision of the board, if judicial review is not sought, may be enforced by application by the Commissioner of Labor to a district court for an order or judgment enforcing the decision. A proceeding under this section is not a review of the validity of the administrative decision (Sec. 39-3-212, as amended by Ch. 90, L. 1995).
Court actions.- If judicial review is sought, the district court may issue an order or a judgment enforcing the decision of the board in a wage claim proceeding (Sec. 39-3-212, as amended by Ch. 90, L. 1995).
Assignment of claims.- Whenever the Commissioner of Labor determines that one or more employees have claims for unpaid wages, he or she must, upon the written request of the employee, take an assignment of the claim in trust for such employee and may maintain any proceeding appropriate to enforce the claim, including liquidated damages. With the written consent of the assignor, the commissioner may settle or adjust any claim so assigned (Sec. 39-3-211).
WHO TO CONTACT
Contact the Commissioner of Labor at P.O. Box 1728, Helena, MT 59624-1728. Telephone: (406) 444-3555. Fax: (406) 444-2699.
POSTING
Each employer or an authorized representative of the employer must, on written demand, prior to the commencing of work, notify each employee as to the rate of wages to be paid, whether by the hour, day, week, month, or year, and date of paydays. Such notification must be in writing to each employee or by posting of notice in a conspicuous place. An employer who has entered into a signed collective bargaining agreement need not follow these notification procedures when such agreement contains conditions of employment, wages to be received, and hours to be worked. Employers engaged in agriculture or stockraising are also exempt from the notification provisions (Sec. 39-3-203).
PENALTIES
An employer who fails to pay an employee as provided in Montana's wage payment law or who violates any other provision of such law is guilty of a misdemeanor (Sec. 39-3-206), which is punishable by imprisonment not to exceed six months in a county jail or by a fine not to exceed $500, or by both (Title 46, Ch. 18, Pt. 2, Sec. 46-18-212). A penalty must also be assessed against and paid by the employer to the employee in an amount not to exceed 110 percent of the wages due and unpaid (Sec. 39-3-206).
Employees may also recover wages and penalties accrued for a period of two years prior to filing a claim (or three years for repeated violations) (Sec. 39-3-207).
<p>Employees may also recover wages and penalties accrued for a period of two years prior to filing a claim (or three years for repeated violations) (Sec.</p>