Independent Contractor Exemption Certificates

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Becoming an Independent Contractor

A worker must be:

  • Free from control or direction from hiring agent.
  • Engaged in their own independently established business, occupation, trade, or profession.
  • Covered under a self-elected workers' compensation insurance policy or obtain an Independent Contractor Exemption Certificate (ICEC).

How to obtain an ICEC:

  • Read, complete, and submit the entire original and notarized application and waiver form with a non-refundable $125 fee to the Department.
  • Submit business documentation with your completed application that demonstrates you have an established business for each occupation listed on you application.

Independent contractors can be fined up to $1,000 per violation for:

  • Performing work without an ICEC;
  • Performing work with a revoked or suspended ICEC;
  • Transferring their ICEC to another person; or
  • Misrepresentation of the independent contractor status.

When Hiring an Independent Contractor

Make sure you:

  • Do not control the method and means of how they perform their work, i.e., providing equipment and training.
  • Have a written contract that states what is to be performed, materials used, start and completion dates, payment based on completed project, and liability for failure to complete the project.
  • Obtain references and check them out to ensure they are experts in their field of work.
  • Check periodically to confirm that they have a valid ICEC or WC insurance on themselves.
  • Ask for proof of their ICEC and verify it is in good standing by searching on our website or calling our office at (406) 444-7734.

Hiring agent can be fined up to $1,000 per violation for:

  • Exercising control to create an employee/employer relationship; or
  • Requiring an employee to assume an independent contractor status.

Montana Workers’ Compensation Laws for Independent Contractors

  • 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.

  • 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).

  • 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 could 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

  • 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

Preparing an Independent Contractor Exemption Certificate Application

    • 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.
    • 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.

  • 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

  • Department of Labor and Industry

    Independent Contractor Central Unit

    PO Box 8011

    Helena, MT 59604-8011

  • 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.

  • 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

    Registration Section

    301 South Park Avenue, 5th Floor

    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.

  • 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.

  • 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.

  • 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.

  • 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.

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

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