Department of Labor and Industry

Extra Territorial Information

Extra Territorial

Extra Territorial Information

Introduction

The following information is for your assistance. Montana businesses that contract with out-of-state businesses to perform work in Montana need to know what the Montana workers' compensation laws require.  The intent is to provide some basic guidelines for everyone's use.  This is not all inclusive.

What does a Montana business that contracts with an out-of-state business need to know regarding workers' compensation?

To protect your business, you should obtain proof the business you are contracting with is in compliance with Montana workers' compensation laws. If you are contracting with a business that is not performing construction, obtain a copy of their approved petition for extraterritorial coverage from them. Please contact (406) 444-0564 for more information.

If you are contracting with a business to do construction work, request their Montana contractor registration number. Then call 1-406-444-7734 and confirm if the number is valid. Be sure you document when you called, who you talked to, and if the contractor has been approved to operate with or without employees. If the contractor has been approved without employees and brought a crew, you should not let them work without proof the crew is covered.

What does a non-Montana business that is planning to work in Montana need to do?

If you are not performing construction type work, you may be able to apply for extraterritorial coverage. To do this, contact your workers' compensation insurance company informing them of your plans. They will petition Montana for extraterritorial coverage. Montana will notify you by mail whether the request is approved or denied.

What is extraterritorial coverage?

Extraterritorial agreements allow an employer to bring/send employees to another state without being required to purchase workers' compensation insurance in that other state for a temporary period of time. Most all businesses are eligible for extraterritorial coverage, although Montana does not recognize other state's workers' compensation policies within the construction industry.

Montana has ET agreements with seven states. They are North Dakota, South Dakota, Oregon, Idaho, Washington, Wyoming, and Utah. The general rule is an employer may operate in another state for six months. We all know every good rule has at least one exception. The table below lists all the states we have reciprocal agreements with and indicates those that have exceptions.

State Time Extensions Exceptions
STATE TIME EXTENSIONS EXCEPTIONS
Washington 6 months Yes Yes*
Oregon 6 months Yes Yes*
Utah 6 months Yes Yes*
Wyoming 6 months Yes No
South Dakota 6 months Yes Yes*
North Dakota 1 Year/Annually Yes   Yes**
Idaho 6 months Yes No

*   South Dakota, Oregon, Washington and Utah has excluded all construction projects from reciprocity.

**  North Dakota agreement is on an annual basis.

The Extra-territorial agreement is good for 30 days in a six month period. Extensions may be given upon written verification of employment in this state.

PLEASE BE ADVISED, THE CONSTRUCTION INDUSTRY IS NOT ELIGIBLE FOR EXTRATERRITORIAL COVERAGE FOR WORK PERFORMED IN MONTANA

Any construction work performed in Montana must be covered under a Montana workers' compensation policy.

What is the definition of construction?

39-71-116 (8), Montana Codes Annotated, defines the construction industry as the major group of general contractors and operative builders, heavy construction (other than building construction) contractors, and special trade contractors, listed in major group 23 in the North American Industry Classification Manual. Contact your insurance company for a classification of your business, if you are not certain of the industry your business is classified in.

What do I do if I am a construction business and want to work in Montana?

You must purchase a Montana workers' compensation policy. This may be done through the Montana State Fund or any authorized private insurance company.

Montana also requires all construction contractors to register with the Department of Labor & Industry. Effective July 1, 1996, you need to be registered. To obtain more information about contractor registration please call 1-406-444-7734.

What is the difference between a Montana workers' compensation policy and other states workers' compensation?

Each state has it's own laws regarding workers' compensation. Not all states provide the same medical or wage loss benefits to injured workers. Insurance companies charge premium amounts based on the expected losses. Since each state's benefits differ, insurance company costs differ, and so do the premiums charged. Montana's premium costs historically have been higher than our neighboring states. The construction industry is excluded from extraterritorial coverage in Montana, because Montana businesses were at a competitive disadvantage when competing with out of state companies who were paying lower workers' compensation premiums.

What if I don't obtain Montana Workers' Compensation or register with Contractor Registration?

Fines and penalties may be assessed against businesses not complying with Montana laws. In addition, any construction contractor that does not register with the Contractor Registration Unit, will find it difficult to obtain work within the state of Montana.