Montana Fines for Operating Without Workers' Compensation Insurance

What the Law Requires

Montana law mandates that all employers with one or more employees purchase workers' compensation insurance or file a waiver. The State Insurance Department (SID) enforces this requirement. Failure to comply triggers civil penalties that can quickly become substantial.

Typical Fine Structure

The SID imposes a base fine of $250 per employee for each month the company remains uninsured. The fine can rise to $1,000 per employee if the employer is found willfully non‑compliant. Additionally, a civil penalty of $50 per employee per month may be added if the employer is deemed negligent.

Enforcement Process

1. Notice of Non‑Compliance – The SID sends a written notice to the employer, detailing the missing coverage and the amount of the pending fine.2. Opportunity to Cure – The employer has 30 days to purchase coverage or file a waiver. If the employer fails to respond, the SID moves to collect the fine.3. Collection and Enforcement – Unpaid fines can be collected through wage garnishment, liens, or civil court action. Repeated violations may lead to license suspension or revocation.

Common Mistakes That Trigger Fines

• Hiring new employees without updating insurance.• Closing a business and not canceling coverage in a timely manner.• Misclassifying employees as independent contractors to avoid insurance.• Relying on a waiver that is no longer valid.

How to Avoid Penalties

• Maintain accurate employee records and update insurance annually.
• Use a licensed Montana insurance broker familiar with workers' comp.
• Keep a copy of the policy and any waiver in the employee file.
• Set reminders to review coverage status at least quarterly.

When a Waiver Applies

Small employers (fewer than five employees) may file a waiver with the SID. The waiver must be renewed annually and includes a signed statement of intent. Even with a waiver, employers remain liable for any workplace injuries, so the policy is still recommended.