Montana Overtime Laws Annotated for Employers and Employees

Intro to Montana Overtime Wage Laws

Montana, like the majority of American states, falls under the federal labor law as it relates to overtime pay. Under the federal Fair Labor Standards Act, all non-exempt employees are covered under this act and are entitled to minimum wage pay as well as overtime pay rates. Montana, like the federal statute, also has minimum overtime requirements. Under state law, overtime pay not only refers to time worked per week but also refers to excess time worked daily. This is in addition to the requirement of 40 work hours weekly. The hourly rate of overtime is also noted under the state law as being one and one-half times the regularly paid rate.
Employees in the state of Montana can never receive less than the average prevailing wage for their job description. This is determined by the Department of Labor and Industry, and their decision is final and binding over disputed matters . Some exceptions apply for applications of overtime regulation including, but not limited to, the types of services, administration, and the duties associated with that employment. Public employees, volunteer workers, highly compensated employees, and employment relating to the agricultural field are some of the exemptions to overtime pay laws.
Federal FLSA law provides that exceptions to overtime compensation must be made with existing law, and no provision may include overtime payment as a part of the salary that is paid. In other words, an employer can never include overtime pay in calculating a flat rate salary. If there is a dispute over the issue of overtime payment as provided for under the federal law, it needs to be resolved through the federal courts. However, if there is a dispute over the state overtime law, then the dispute proceeds under the state law provisions. There are no exceptions to overtime pay established under the state law.

Eligibility for MT Overtime Wages

Not every employee will be eligible for overtime pay. Under the Montana wage and hour laws, there are a number of exemptions that can eliminate overtime eligibility. These exemptions apply to specific job duties, as well as industries, occupations, and employees.
The most common overtime exemption is the "white collar" exemption. Salaried employees, who also fulfill executive, administrative, and professional duties, are often deemed exempt from Montana’s overtime requirements.
In order to qualify for this exemption, the employee must have a salary of at least $410 per week. These employees are then considered exempt from Montana overtime pay law, unless covered under the motor carrier exemption.
There are other exemptions from overtime pay. A truck driver is exempt from overtime pay if: the driver is paid on an hourly basis and makes at least one-and-a-half times the minimum wage; OR is paid by the load or the mile and earns more than $15.50 per hour. The motor carrier exemption only applies if the driver is subject to federal regulations while working. For example, if the employee has to keep a driver log and report their hours to the local Department of Transportation, they are subject to the exemption.
Employees in other exempt industries include commercial drivers, farm workers, railroad workers, seamen working on boats engaged in international trade, agricultural workers, and employees of small town newspaper businesses.
Frequently the question of exempt status comes down to the primary duties of the position. Employees who primarily accomplish administrative tasks are exempt, whereas employees who primarily use tools or similar items directly with making or moving a product are not.

MT Overtime Premium Pay

Overtime pay in Montana is calculated as time-and-a-half the employee’s usual hourly wage for each hour worked over 40 hours. In some cases, non-traditional schedules do not apply for the 40-hour rule, such as when an employee works four days on then four days off. In this case, Montana law takes a deep dive into the calculation of the average hours the employee works to figure out whether the employee has worked over the "40-hour threshold." Allowable work schedule ranges from three twelve-hour days to seven eight-hour days; employers must also be aware of exceptions for specific industries. Montana overtime law applies to "any employee working in the capacity of an employee" except management and supervisors.
A standard "day’s work" in Montana is known as a "basic work period," which defaults to eight hours worked for 12 months. Inside salespeople and truck drivers receive a basic work period of 182 hours worked in a 21-day period.
Montana employees working on a non-standard work week, such as a 4 days on, 4 days off schedule, will have their 40-hour weekly work limit averaged over the period the employee works for the company. For example, if an employee works four days on and four days off, then claims overtime for one of those eight-hour days the employer can deduct that alleged overtime from the claimed "four-day" average. The state will step in when, "an employer changes an employee’s work schedule" to avoid paying overtime or "the employee’s schedule varies between weeks" and varies over long periods of time to "a point where the average becomes equal to or less than 40." After using this formula to determine overtime and an employee is still claiming unauthorized overtime, it is this lack of compliance with Montana law that is the employee’s burden to prove.

Montana Overtime Law Exceptions and Exemption

A few exceptions and exemptions to Montana overtime laws exist. One of the most common for Montana employers is salaried employees. The FLSA overtime exemption does not apply in Montana. However, Montana does have its own exemption for salaried employees that does not contain a day or work hour requirement like the FLSA.
Salaried employees must receive a salary that is equal or greater than twice the state minimum wage for 40 hours per week to be exempt under the exemption. Employers should keep in mind that some employees in job classifications exempt under the federal law may not be exempt under Montana law.
Agricultural workers are not entitled to Montana overtime payment. Also, the state requires an employer with 4 individual regardless of type or amount of work to provide meal periods or other rest periods of at least 30 minutes for every 5 hours of work. This rest period for every 5 hours of work provision does not apply to rest breaks and eating periods and does not apply to employees subject to certain wage and hour laws.
Child care providers and groups are also exempt from Montana’s overtime requirement. Likewise, independent contractors do not have the same overtime hour requirements as Montana employees working for an employer.

Current Changes to the Montana Overtime Wage Laws

Employers should pay attention to how these recent updates affect their employees, the employees’ compensation and how overtime is paid.
In Jennings v. Wal-Mart Stores, Inc., 2017 MT 33, the Montana Supreme Court was tasked with determining whether on-call hours should be paid, and if so at what rate. In Jennings, Wal-Mart Store Associates were required to be "available" for their shifts. Shortly before the Associates’ scheduled shift, they received a phone call or text message that informed them that they did not need to report to work. The Associates then remained "on call," meaning that they had to "be reachable by telephone, respond to the telephone calls or text messages, and report to work if so requested." The Court found that the Associates’ on-call time was work time requiring compensation. Moreover, the Court held that the Associates were owed overtime because their schedule fluctuated each week; the Associates did not work 40 consecutive hours regularly and were not regular part-time employees. Rather, there was uncertainty as to when they would get off or if they would arrive at work and be sent home. Since the Associates were found to have worked beyond their scheduled hours, which included on-call time, they had to be paid overtime at one and an half times their regular rate of pay. In Mountain Climber, Inc., v. Muggli, 2017 MT 193, the parties stipulated that Mountain Climber, Inc., allegedly a commercial climbing company, employed Muggli. The principal issue in the case was whether Muggli was an independent contractor or employee. The district court concluded that Muggli was an employee . The Montana Supreme Court noted the following factors regarding the economic reality analysis — (1) the employer’s right to control the work performed; (2) the place where the work occurs; (3) the method of payment; (4) the duration of the relationship between the parties; (5) the nature of the work; (6) the equipment used in performing the work; and (7) the right to hire and fire. The court found that the parties further stipulated that Mountain Climber, Inc. had the right to control Muggli’s work performance. Moreover, Muggli was paid by the hour. In a deposition, Muggli further testified that she followed Mountain Climber’s, allegedly the employer’s, policies and procedures. The Court found that Muggli was an employee. The Appellate Court in Belton v. City of Billings, 2017 MT 108 noted that the City of Billings, the defendant in the case, filed a Motion for Summary Judgment arguing that the Municipal Rate Policy found in the city’s municipal code was either discretionary or that it only applied to initial hiring and thus was not applicable to belton’s claims. Here, Belton, who was previously employed by the city, filed a complaint alleging that she should have been paid overtime at the "regular rate" of pay as opposed to the "basic rate." The city countered that Belton was already paid after the initial hiring. Belton also argued that the City of Billings, by enacting the Municipal Rate Policy, waived the defense of qualified immunity that otherwise might have applied to it. But the Montana Supreme Court affirmed the lower court’s decision. For example, the Montana Supreme Court found that the municipal code provisions authorizing the municipal policy contemplated individualized consideration of pay, and thus qualified immunity could still apply. Montana overtime law has developed largely through court interpretation. As the above examples show, issues concerning the definition of overtime eligibility and overtime compensation are hot on the court agenda.

Employer Responsibilities under Montana Overtime Law

As with all wage and hour laws, employers have obligations under Montana’s non-exempt overtime law. For example:
Record-Keeping: DOL regulations typically require employers to keep accurate records of hours worked by employees. Specifically, HRD Administrative Rule 24.16.1003(1) requires employers to issue and maintain a true and accurate record of all hours worked daily by a non-exempt employee. Montana courts have clarified that employers not only must maintain a record of each day worked, but also the number of hours worked daily. See Grimsrud v. BNSF Railway Co., 2012 MT 165, ¶ 19, 365 Mont. 177, 278 P.3d 895. To comply, employers must provide an accurate account of all time worked, including any meal periods not taken and any off-the-clock work. Note: keeping a single list or time sheet that notes all time worked by all employees in a particular department is not compliant with the law.
Notification of Overtime Rate: Montana law requires employers to notify employees in writing of the overtime rate of pay prior to requesting employee to work overtime. HRD Administrative Rule 24.16.1003(3) provides:
Omitting Penalties: Failing to alert employees to the overtime requirements or maintain accurate records of hours worked will inevitably result in unpaid overtime claims. If an claim for unpaid overtime is made and the employer cannot produce an accurate record of minutes worked per week, Montana law provides for one of two situations:

1. A non-exempt employee readily admits that overtime was worked but the employer has no record of same. If the employee cannot provide the exact number of hours of overtime worked, the employer has no way to confirm the claim on its own. So the Montana Supreme Court has said that the ambiguity can be resolved against the employer. See Grimsrud, 2012 MT 165, ¶ 27. In such a situation, the employee will obtain the highest amount of overtime requested or the amount of overtime claimed minus the employee’s testimony about the missed meal period.
2. The employee denies that overtime was worked and the employer cannot produce an accurate record of hours worked per week. In this scenario, the law requires the employer to put a witness on the stand to dispute the employee’s testimony. In that situation, the employer wins. See id.

In short, if an employer is unable to produce an accurate record of hours worked at all, the overtime requirement is automatically triggered and the employee will prevail.

How to Solve MT Overtime Violations

Employers and employees both should be aware of the steps for resolving unpaid overtime disputes in Montana. If an employer fails to pay for overtime worked, there are two primary ways employees can get paid. An employee may file a lawsuit in district court under the Montana Wage Act or file a complaint with the Montana Department of Labor and Industry (DLI) to resolve the amount owed. Even where employees file a claim with the DLI, it is subject to the employer filing an appeal in court, and the parties can opt out of the administrative process entirely and choose to litigate. Regardless of which is used, an employee filing a claim should have documentation to support the amount being demanded. For example, a claim that unpaid overtime is owed should be accompanied by records showing the time actually worked.
Although the Montana Wage Act gives the Department of Labor and Industry authority to resolve overtime disputes, it does not preclude an employee from filing a private lawsuit. When an employee files with the DLI, they can request that the Department initiate an investigation. The Department can then determine if overtime is owed and can attempt to resolve the dispute by contacting the employer.
However, if the employee believes that an amicable resolution requires legal intervention, they may also pursue a civil lawsuit for damages; this opportunity costs the complaining employee nothing up front, as claims of unpaid wages in Montana can be brought on a contingency basis, meaning if the claim is lost, the employee owes no legal fees. The statutes that apply to overtime claims typically permit recovery of attorneys’ fees.
Complaints can be filed with the Department of Labor online, and the process is relatively easy to navigate. All information requested on the form is fairly self-explanatory. Employers will be notified shortly after a claim is filed.
If the DLI is unable to resolve the overtime dispute, it will be referred to the Office of Administrative Hearings for a contested case hearing. At this point, the parties have very different rights compared to the private lawsuit route.
In an administrative proceeding, the hearing officer can only order amounts authorized under the Montana Wage Act to the complainant. Additionally, an employer’s ability to recover its costs and attorneys’ fees is more difficult. In a disputed claim, a hearing officer can only award a complainant amounts authorized under the Act, attorney’s fees, and costs incurred by the complainant in collecting on the award.
In contrast, the parties are governed by the rules in district court. Therefore, if the parties have opted out of the administrative process completely and are litigating, the employees’ entire overdue overtime claim is available, including punitive damages, and the employer may also be able to recover its costs and attorneys’ fees.
Filing with the Department may be the optimal choice in certain cases. Companies should ensure that their internal procedures are such that employees have no reason to file with the Department. For example, absent a policy forbidding the sharing of overtime records or timekeeping software, an employees’ opportunity to review their prior hours worked is probably sufficient to show the existence of an overtime dispute under the Montana Wage Act and therefore the employee should be paid overtime out of fear of a DLI filing.
By knowing how an employee can initiate an action concerning overtime disputes, both employers and employees can be prepared for the consequences and choose their path of resolution wisely.

Montana Overtime Law FAQs

The following frequently asked questions about Montana overtime laws aim to help employers and employees understand the way the law works in the state of Montana.

1. Do overtime laws in the state of Montana apply to all employees?

While most nonexempt employees are eligible for overtime compensation, there are a number of exemptions that apply to certain types of employees. Overtime laws have special rules for agricultural workers, seaman, railroad workers and truck drivers, among others. If you aren’t sure if you or an employee is exempt from the overtime pay requirements, consult an employment law attorney.

2. Are there any exceptions to the overtime requirement that apply in Montana?

If you own your own business, you are exempt from entitlement to overtime pay. However, you may not simply classify someone as an independently owned or operated business just to circumvent the overtime requirements. You must prove that the worker is truly independent. They must be free of control, instruction and contract, have a customary place of business outside the offices of your company, have a capital investment, perform services outside the usual scope of your business and have a written contract.

3. My employer says we are on a "salary plus overtime" system. Is that legal?

If your employer pays you a flat salary for up to 40 hours worked and you receive the full receipt of overtime pay for anything over 40 , then yes, this is legal. However, if your employer withholds overtime pay after requiring you to work more than 40 hours within the standard workweek, this is illegal.

4. Does my employer owe me back overtime pay if we are considered an "exempt" category, like management?

If you are truly an exempt employee according to Montana law and the federal Fair Labor Standards Act, your employer does not owe you any overtime pay. However, if they treated you like a nonexempt employee, such as requiring you to work overtime without pay or failing to pay you a bonus earned because of working overtime hours, you may recover that unpaid compensation.

5. How can I be sure my employer is following the state overtime laws?

If you are an employer, you should ensure your workers are properly classified by examining their job duties and responsibilities and consulting a labor and employment attorney. If you are an employee, the state Labor and Industry website includes a lot of helpful resources and information about the overtime laws that can help clarify things for you, including the Wage and Hour FAQ page. You could also hire an attorney, as Montana has a three-year statute of limitation on filing a wage claim.