Frequently Asked Questions - ICEC

Independent Contractor Exemption Certificate (ICEC) – Frequently Asked Questions

Montana Workers’ Compensation Laws for Independent Contractors

What is the purpose of the Independent Contractor Central Unit?

The Independent Contractor Central Unit is located within the Department of Labor and Industry. The unit assures all independent contractors in Montana are in compliance with Montana workers' compensation laws; is responsible for evaluating independent contractor exemption certificate applications; and conducts investigates and issues decisions on employment relationships. The unit has six field representatives that perform on-site jobsite visits around Montana.

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.

Can health insurance, commercial general liability insurance, or industrial accident insurance take the place of workers’ compensation insurance coverage?

No. Montana law specifically requires Montana workers’ compensation insurance coverage under perform an online search or call our office at (406) 444-7734. To verify self-elected workers’ compensation insurance coverage, request proof of coverage from the independent contractor or call their workers’ compensation insurance agency.

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).

Becoming an Independent Contractor

What is an independent contractor?

An independent contractor in Montana is a person who renders service in the course of an occupation and:

(a) has been and will continue to be free from control or direction over the performance of the services, both under a contract and in fact; and

(b) is engaged in an independently established trade, occupation, profession or business.

Additionally, an independent contractor must obtain either an independent contractor exemption certificate or self-elected coverage under a Montana workers’ compensation insurance policy. Refer to MCA, 39-71-417.

Who is required to obtain an independent contractor exemption certificate or self-elected workers’ compensation insurance coverage?

A person who regularly and customarily performs services at a location other than the person's own fixed business location must obtain an independent contractor exemption certificate unless the person has self-elected workers’ compensation insurance coverage.

“Person” means:

  • a sole proprietor;
  • a working member of a partnership;
  • a working member of a limited liability partnership;
  • a working member of a member-managed limited liability company; or
  • a manager of a manager-managed limited liability company that is engaged in the work of the construction industry as defined in 39-71-116, MCA.

All persons in the trucking industry, regardless of their business structure, must obtain either an independent contractor exemption certificate or self-elected workers’ compensation coverage. Refer to MCA, 39-71-117(4).

Persons not required to obtain an independent contractor exemption certificate or self-elected workers’ compensation insurance coverage may voluntarily apply.

Are there penalties if an independent contractor does not comply with the workers’ compensation laws?

Yes. A person may not:

  • perform work as an independent contractor without first obtaining an independent contractor exemption certificate or self-elected workers’ compensation coverage, unless it is not required.
  • perform work under a revoked or suspended certificate;
  • transfer their certificate to another person; or
  • misrepresent their status as an independent contractor.

A person 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(1).

Other Responsibilities for Independent Contractors

Is there a test required to obtain an independent contractor exemption certificate?

No. The independent contractor exemption certificate is not a license and does not ensure quality of work.

Should I register my business name with the Montana Secretary of State?

Yes. All persons using a business name other than their personal name are required to register. You may contact the Secretary of State’s office at (406) 444-3665 or visit their website. Please complete this step before submitting your completed independent contractor exemption certificate application.

What do I need to do to hire employees?

Do I need a construction contractor registration if my business is not in the construction industry?

No. However, you are still required to purchase workers' compensation insurance coverage for all your employees.

Where do I purchase a Montana workers’ compensation insurance policy?

You may contact any workers’ compensation insurer authorized to write Montana workers’ compensation insurance policies; or contact Montana State Fund at (406) 495-5000 or 1-800-332-6102.

As an independent contractor, can I hire other independent contractors?

Yes. Ensure that anyone you contract with is also in compliance with the workers’ compensation laws.

What should I do if I need temporary help on a job?

Contact a temporary employment agency in your area.

Additional state, city, and county requirements for independent contractors:

Montana state government does not license construction contractors. However, you may verify professional and occupational licensing with the Business Standards Division. You may also contact the city or county in which you are performing your services to verify their requirements.

Preparing an Independent Contractor Exemption Certificate Application

Where do I obtain the application?

Download and print the application. You may call our office at (406) 444-7734 if you need an application mailed, emailed, or faxed. Alternatively, you may call any Job Service office or one of the unit’s field representatives in your area.

What are the steps to apply for a certificate?

  • Read the application and waiver forms before completion.
  • Complete the forms in their entirety only if you fully understand and agree to waive all your rights and benefits provided by a Montana workers’ compensation insurance policy.
  • Review the business documentation list and provide photocopies to score 15 points for each trade, occupation, profession, or business listed on your application.
  • Sign the forms in front of a notary and have the forms notarized.
  • Submit your completed and notarized application and waiver forms, along with business documentation photocopies, and the $125 non-refundable application fee.

How do I pay the application fee?

  • By check or money order payable to the Department of Labor and Industry (DLI);
  • by debit, credit, or electronic check online (processing fees will apply); or
  • if you wish to visit the Helena office, cash payment is accepted in the exact amount.

Why do I need to submit 15 points of business documentation to obtain a certificate?

The review of the business documentation allows the department to verify that those applying for an independent contractor exemption certificate are truly engaged in an independently established trade, occupation, profession, or business.

Submitting an Independent Contractor Exemption Certificate Application

Where do I mail my completed application?

Department of Labor and Industry
Independent Contractor Central Unit
PO Box 8011
Helena, MT 59604-8011

How long does it take to process my application?

Processing time typically takes about 10-15 business days, sometimes longer depending on the volume of applications that the department receives. However, the approval or denial of your application can take up to 30 days.

How can I expedite the application process?

The department will prioritize process your completed independent contractor exemption certificate application if you ship it overnight using FEDEX or UPS to the physical address.

Department of Labor and Industry
Independent Contractor Central Unit
1805 Prospect Ave. (2nd floor east side)
Helena, MT 59601

Same day processing is not guaranteed. Applications sent by USPS are not shipped to our physical address, therefore will not be expedited.

How will I know if my application was approved?

Upon approval of your independent contractor exemption certificate application, you will receive a certificate, wallet-sized card, and window decal in the mail. You may search for your independent contractor exemption certificate online for approval status.

How will you notify me if my application is missing information?

You will receive a department notice in the mail specifying what your independent contractor exemption certificate application is missing. If you do not respond or your application is missing subsequent information, you will receive a second notice. You have 30 days from the date of the first department notice to complete the application process or your application will be denied.

What happens if my application is denied?

If you are unable to complete the application process within 30 days, you will receive a department notice in the mail explaining the denial of your independent contractor exemption certificate application. You have up to 6 months from the date the department initially received your application to provide the missing information; otherwise, you must reapply and pay the $125 non-refundable application fee.

Updating an Existing Independent Contractor Exemption Certificate

Do I need to notify the Department if my phone number, mailing address, occupation(s), business structure(s), or business name(s) change?

Yes. There is no additional application fee to make changes to an existing independent contractor exemption certificate.

  • Business Structure – Please call our office at (406) 444-7734 because you may need to complete a new application and waiver form. If changing to a partnership, you must provide a partnership agreement.
  • Phone number - Mail, email, phone, or fax us a request in writing to make those changes.
  • Mailing address - Mail, email, phone, or fax us a request in writing to make those changes.
  • Occupations (remove or add) – You may call our office for a pre-printed application form for changing occupations. The application form must include all of the occupations that you wish to have listed on your certificate. You may need to provide 15 points of business documentation for any newly added occupations.
  • Business Name – You may call our office for an application form for changing your business name. You may need to provide updated business documentation to verify your new business.

How do I renew my certificate?

Approximately 60 days before your independent contractor exemption certificate expires, the department will mail you a pre-printed renewal application to the mailing address that you last provided.

Can my spouse or child take over my certificate?

No. The independent contractor exemption certificate is issued to the person whose name is on the certificate and cannot be transferred.