Extra Territorial

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.

Apply for Extra Territorial Coverage

The states of Montana, Wyoming (Effective 6/4/2019), Idaho (Effective 9/16/2021), South Dakota (Effective 9/7/2022), and Utah (7/1/2023) have amended the reciprocity agreement to include "Construction Contractors" (Under the NAICS code 23XXXX) that come to the State of Montana from Wyoming, Idaho, South Dakota, or Utah making construction contractors eligible to be considered for Extra-Territorial agreement as long as they meet the requirements entailed in 39-71-402.

  • 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 (except for Wyoming effective 6/4/2019, Idaho effective 9/16/2021, South Dakota effective 9/7/2022, and Utah effective 7/1/2023).

  • 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 Montana for six months. 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
    No
    Wyoming
    6 months
    Yes
    No
    South Dakota
    6 months
    Yes
    No
    North Dakota
    1 Year/Annually
    Yes
    Yes*
    Idaho
    6 months
    Yes
    No

    *   Oregon, North Dakota, and Washington have excluded all construction projects from reciprocity.

  • Montana employers who wish to do business out-of-state will need to have their Workers' Compensation insurance company request an extraterritorial certificate from the state they are wanting to do business in. (See Participating Reciprocal States above). The agency responsible for regulating Workers' Compensation laws for the extra-territorial request will review the request and make a determination to approve or deny the request. Notice of their decision will be sent to the employer and the insurer. Things to know about contracting with an out-of-state business 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 (except for Wyoming, Idaho, and South Dakota, see above), obtain a copy of their approved petition for extraterritorial coverage or MT policy page 3A from them. Please contact (406) 444-6532 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.
    • The extra-territorial certificate is not considered as valid coverage until the reciprocating state approves the request.
    • Montana  employers working outside of Montana are governed by the laws of the state in which they work is being performed. Please contact the Workers' Compensation regulatory agency of the state you intend to work in to ensure you are in compliance with their laws.
    • Under certain circumstances, a Montana employee can file a claim in Montana for an injury that occurred while working temporarily in another state.

  • Out-of-State employers who wish to send their employees to Montana temporarily may qualify for extra-territorial coverage. (See Participating Reciprocal States above). The extra-territorial request is sent to the Workers' Compensation regulator for the State of Montana for review. The State of Montana will review and make a determination to approve or deny request and the decision will be sent to the agency responsible for Workers' Compensation regulation and the employer. Things to know about contracting with Montana for temporary work:

    • The construction industry is NOT eligible for extra-territorial coverage for work performed in Montana, except for the following states:
      • Wyoming (effective 6/4/2019)
      • Idaho (effective 9/16/2021)
      • South Dakota (effective 9/7/2022)
      • Utah (effective 7/1/2023)
    • Any construction work performed in Montana must be covered under a Montana Workers' Compensation policy, except for the following states:
      • Wyoming (effective 6/4/2019)
      • Idaho (effective 9/16/2021)
      • South Dakota (effective 9/7/2022)
      • Utah (effective 7/1/2023)
    • The extra-territorial request must be approved before a business begins work in Montana.
    • If your insurance cancels, the extra-territorial certificate is no longer valid and operations in Montana should cease. 
    • Under some circumstances, you may qualify for an extension. 
  • 39-71-116 (9), 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.
  • You must purchase a Montana workers' compensation policy. This may be done through 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.

  • 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.
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