Workers' Compensation in Montana (Part I)

WHAT TO KNOW

You are required to carry workers' compensation insurance in Montana if:

• You have any employees working in Montana, whether full-time or part-time.
• You’re hiring someone who is not an employee who doesn't have an independent contractor exemption or their own policy coverage. Make sure any independent contractors either have an ICEC (Independent Contractor’s Exemption Certificate) issued by the Montana Department of Labor and Industry or proof of workers’ compensation insurance. In Montana, it is the employer's responsibility to verify this documentation or risk being held liable.

Employee or independent contractor? It’s important to know if you - or if someone you’re hiring - would be considered an employee or an independent contractor. This determines who will be held responsible for medical bills or lost wages should you get injured on the job. A number of factors are reviewed when evaluating your status. Here are some things to think about:

• Are you directed on how the work should be performed or simply the final product? An employee will generally be directed on how a project should be completed, while an independent contractor will use his own methodology.
• Does the business provide training for you? This indicates employee status.
• Are your services a substantial or integral part of the business? This indicates employee status.
• Does the business require that you personally perform all services, or can you hire and pay your assistants? Independent contractors may have the option of hiring other contractors to perform their work.
• Do you have profits and losses independent of the business? This is an indication that you are running your own business as an independent contractor.
• Do you have an ongoing relationship with this business? While you and the company may simply have a good working relationship, the IRS may view this as an indication of employee status.
• Do you set your own schedule and hours? This suggests you’re an independent contractor.
• Are you required to work full-time? This is an indication of employee status.
• Are you allowed to work for other clients? Do you provide your own tools and equipment? This indicates that you are an independent contractor.
• Can the relationship be terminated at any time? This suggests employee status. An independent contractor would only be discharged for failure to meet contract specifications; likewise, an independent contractor is under contract and cannot quit until the project is completed.

Other regulations that may affect you:

Workers' compensation insurance covers wage replacement and medical bills for employees injured on the job. To protect against other injuries at your place of business, you may need general liability insurance. A general liability policy protects the insured company and its assets from a lawsuit resulting from third-party bodily injury, property damage or personal and advertising injury (such as libel or slander), caused by direct or indirect actions of the insured. For example, if a customer slips and falls in your restaurant or trips in your store. General liability insurance gives you the added peace of mind in the event of an accident.