Independent Contractor Exemption Certificate (ICEC) – Frequently Asked Questions

Montana Workers’ Compensation Laws for Independent Contractors from the Department of Labor & Industry

What are Montana’s workers’ compensation laws for independent contractors?
The law requires independent contractors to obtain either an independent contractor exemption certificate or self-elected coverage under a Montana workers’ compensation insurance policy. Refer to MCA, 39-71-417.

What is the purpose of an independent contractor exemption certificate?
It allows an independent contractor to waive all their rights and benefits that would otherwise be provided by a workers’ compensation insurance policy. If an independent contractor were to suffer a work-related injury or occupational disease while performing the occupations specified on the certificate, they would not be eligible for workers’ compensation benefits. The certificate concludes the person’s status is conclusively presumed to be that of an independent contractor. Refer to MCA, 39-71-417(7).

What is the purpose of self-elected workers’ compensation insurance coverage?
Self-elected workers' compensation insurance coverage provides wage-loss and medical benefits to an independent contractor should a work-related injury or occupational disease occur.

What is the risk of hiring an independent contractor without an independent contractor exemption certificate or self-elected workers’ compensation insurance coverage?
It would result in the state treating the independent contractor as an employee of the hiring agent. This means the hiring agent may be responsible for claims related to work-related injuries or occupational diseases and incur penalties from the Uninsured Employers’ Fund. Labor agreements and issuance of 1099s do not make a person an independent contractor.

Are there penalties for making a person obtain an independent contractor exemption certificate?
Yes. Montana law prohibits employers from avoiding their responsibility to provide workers' compensation insurance coverage for employees. An employer may not require an employee through coercion, misrepresentation, or fraudulent means to adopt independent contractor status or exert control to a degree that destroys the independent contractor relationship. An employer who violates a provision of the law is subject to a fine to be assessed by the department of up to $1,000 for each violation. Refer to MCA, 39-71-419(2).