Montana Code Annotated 2023



Part 4. Coverage, Liability, and Subrogation

Independent Contractor Violations -- Penalty

39-71-419. Independent contractor violations -- penalty. (1) A person may not:

(a) perform work as an independent contractor without first:

(i) obtaining from the department an independent contractor exemption certificate unless the individual is not required to obtain an independent contractor exemption certificate pursuant to 39-71-417(1)(a); or

(ii) electing to be bound personally and individually by the provisions of compensation plan No. 1, 2, or 3;

(b) perform work as an independent contractor when the department has suspended, revoked, or denied the independent contractor's exemption certificate;

(c) transfer to another person or allow another person to use an independent contractor exemption certificate that was not issued to that person;

(d) alter or falsify an independent contractor exemption certificate; or

(e) misrepresent the person's status as an independent contractor. A person who falsely claimed, either in writing or through credible evidence, to have an independent contractor certification may not be considered to be an employee solely based on not actually having an independent contractor exemption certificate. The burden of proof that an independent contractor is certified rests with the independent contractor and not the hiring entity.

(2) An employer may not:

(a) require an employee through coercion, misrepresentation, or fraudulent means to adopt independent contractor status to avoid the employer's obligations to provide workers' compensation coverage; or

(b) exert control to a degree that causes the independent contractor to violate the provisions of 39-71-417(4).

(3) (a) In addition to any other penalty or sanction provided in this chapter, a person or employer who violates a provision of this section is subject to a fine to be assessed by the department of up to $5,000 for each violation as follows:

(i) up to $1,000 for the first violation, of which up to $1,000 may be waived if the person or employer completes a department-directed education program;

(ii) up to $2,500 for the second violation;

(iii) up to $5,000 for the third violation;

(iv) $5,000 for the fourth and each subsequent violation. In addition to the fine, the department shall suspend or revoke the person's independent contractor exemption certificate and report the person to the workers' compensation fraud investigation and prosecution office provided for in 2-15-2015.

(b) The department shall deposit the fines in the uninsured employers' fund. The lien provisions of 39-71-506 apply to any assessed fines.

(4) A person or employer who disputes a fine assessed by the department pursuant to this section may file an appeal with the department within 30 days of the date on which the fine was assessed. If, after mediation, the issue is not resolved, the issue must be transferred to the workers' compensation court for resolution.

History: En. Sec. 3, Ch. 448, L. 2005; amd. Sec. 2, Ch. 345, L. 2021; amd. Sec. 2, Ch. 505, L. 2023.