Montana — Hiring & Onboarding

Montana’s Legal Employment and Government Accountability Law (LEGAL Act), enacted as HB 226 and effective July 1, 2025, requires every private employer to verify the legal work authorization of each new hire before employment begins. The core requirements are codified at Mont. Code Ann. §§ 39-2-301 through 39-2-304.

Who is covered? A "private employer" is defined in § 39-2-301(7) as any person or entity transacting business in Montana, excluding the federal government and its agencies. Public agencies of state or local government are not covered by the Act.

Verification process — E-Verify is optional: Under § 39-2-302 and state guidance, Montana private employers must verify new hires’ work authorization by:

• Reviewing original documents from the federal Form I-9 list. The employer must retain a copy of the documentation and a signed verification statement for at least three years after the hire date.
• Alternatively, a private employer may elect to use the federal E-Verify system, but is not required to do so unless federal law or a specific contract mandates it. State agency guidance confirms: “The bill does not … require the use of E-Verify.”

Employers who use E-Verify (even if not required) receive a statutory safe harbor for good-faith compliance (§ 39-2-304), but verifying with I-9 documentation alone fully satisfies the Montana LEGAL Act for private employers.

Penalties and enforcement: Penalties escalate by violation count, enforced by the Montana Department of Labor & Industry (DLI):

• First violation: written warning and order to terminate the unauthorized worker.
• Second violation (within three years): civil penalty up to $2,000 per unauthorized worker and possible suspension of business licenses for up to five years.
• Third (and subsequent): permanent business license revocation and possible debarment from state contracts. Due process and hearing rights apply (§ 39-2-303).

Affirmative defense: Employers who can show good-faith compliance by using either process—Form I-9 or E-Verify—maintaining proper records, and following documentation retention rules, have an affirmative defense against penalties (§ 39-2-304).

Source: Mont. Code Ann. § 39-2-301 Source: Mont. Code Ann. § 39-2-302 Source: Mont. Code Ann. § 39-2-303 Source: Mont. Code Ann. § 39-2-304 Source: MT Dept. of Labor & Industry LEGAL Act Guidance

Montana is the only U.S. state that has abolished employment at-will for employees who complete a probationary period. After probation, employees may be discharged only for good cause, in retaliation for refusing to violate public policy, for violating an express written personnel policy, or based on protected free speech. During the probationary period, however, employment remains at-will and may be terminated "by either the employer or the employee on notice to the other for any reason or for no reason."

Default 12-month period. If an employer does not establish a specific probationary period—or does not affirmatively provide that there is no probationary period—prior to or at the time the employee begins work, Montana law imposes a default probationary period of 12 months commencing on the employee's start date. This default increased from six months to 12 months effective April 1, 2021, under amendments to Mont. Code Ann. § 39-2-910.

18-month ceiling. An employer may set a probationary period shorter than 12 months or longer than 12 months, but the probationary period—including any extensions—may not exceed 18 months total. Employers may extend the probationary period while it is still in effect, provided the total does not exceed 18 months. The statute does not require new consideration or employee consent to extend a probationary period that is still running.

Leaves of absence. If an employee takes one or more leaves of absence during the original probationary period or any extension, the time of each leave of absence is not automatically counted as part of the probationary period. A leave of absence is defined as an absence from work of more than five consecutive working days for any reason other than holidays and vacations. The employer must affirmatively elect to include each leave of absence as part of the probationary period; absent such an election, the leave time tolls the probationary clock.

Opting out. An employer may affirmatively provide that there is no probationary period at all. In that case, the good-cause protections of the Wrongful Discharge from Employment Act apply from day one of employment.

Hiring-practice implications. Employers hiring in Montana should establish the probationary period—or the absence of one—in writing before or at the time the employee begins work. Offer letters, employment agreements, or onboarding documentation should specify the probationary period length (e.g., 90 days, six months, 12 months, or 18 months) or state explicitly that there is no probationary period. Failing to address the probationary period in writing triggers the statutory 12-month default and may limit the employer's ability to structure performance-evaluation timelines or terminate at-will beyond 12 months.

Source: Mont. Code Ann. § 39-2-910 Source: Mont. Code Ann. § 39-2-904

Montana’s Legal Employment and Government Accountability Law (LEGAL Act), codified at Mont. Code Ann. §§ 39-2-301 through 39-2-304, establishes a three-tiered penalty system for violations related to unlawful employment of unauthorized workers.

First violation: The employer receives a written warning and must terminate the unauthorized worker. There is no immediate monetary fine for a first offense, but failure to comply with the order subjects the employer to further penalties (§ 39-2-303(3)(a)).

Second violation (within 3 years): The Montana Department of Labor & Industry (DLI) may assess a civil penalty of up to $2,000 for each unauthorized worker discovered in the violation. In addition, the DLI may suspend the employer’s state-issued business licenses for a period of up to five years (§ 39-2-303(3)(b)). The statute gives the DLI discretion to determine the suspension period on site circumstances; it does not require immediate full-term suspension in every case, but five years is the statutory maximum for a second violation.

Third or subsequent violation: For a third violation (again within a 3-year period), the statute requires the permanent revocation of all state-issued business licenses held by the employer (§ 39-2-303(3)(c)), and the DLI may also impose debarment from qualifying for government contracts under § 39-2-303(4).

Trigger for suspension: Suspension or revocation of a business license is not automatic on a first violation; it requires a second violation within the 3-year window following a prior violation. Permanent revocation is mandatory upon a third violation within the same period.

Discretion and due process: The department must provide written notice and an opportunity for the employer to respond before imposing suspensions or revocations. Employers have a right to request a hearing under § 39-2-303(2)-(5).

Source: Mont. Code Ann. § 39-2-303

Montana’s Legal Employment and Government Accountability Law (LEGAL Act) applies to “private employers,” but expressly excludes public employers and the federal government. The statutory definition at Mont. Code Ann. § 39-2-301(7) states that a "private employer" is any person or entity transacting business in Montana, but the definition does not include the federal government or its agencies. There is no mention in the statute of a minimum number of employees. Instead, coverage attaches to any private employer, regardless of size, who engages in business within the state.

Government and nonprofit employers: The definition of "private employer" under § 39-2-301(7) does not reference nonprofit status; unless a nonprofit entity is a unit of state or local government, it is covered. Montana’s legislative materials and guidance as of 2026 do not carve out nonprofit organizations from the private employer definition. Accordingly, private sector nonprofit employers are subject to the LEGAL Act’s verification requirements (including employment verification routes and recordkeeping obligations) to the same extent as for-profit businesses.

Public employers: State and local government agencies are not included in the "private employer" definition, and the statute is silent about any separate mandate for public (non-federal) employers under the LEGAL Act. Thus, public agencies and instrumentalities of state or local government are not subject to the Act’s verification requirements.

Summary: Any Montana employer operating as a private business or private nonprofit, regardless of size or entity form, must comply with the LEGAL Act. The Act does not impose these requirements on federal, state, or local public agencies.

Source: Mont. Code Ann. § 39-2-301

Montana requires all employers to report information on newly hired or rehired employees to the state’s Directory of New Hires, maintained by the Montana Department of Public Health and Human Services (DPHHS), Office of Child Support Services.

What must be reported: Employers must submit either a copy of the employee’s completed federal Form W-4 or an equivalent information sheet agreed with the department. The submission must include:

• Employee’s full name
• Date of hire or rehire
• Social Security number
• Residential and mailing addresses
• Employer’s name, address, and Federal Employer Identification Number (FEIN)

Employers may optionally include:

• Employee’s date of birth
• Whether and when the employee is eligible for health insurance covering children

Authority for these required and optional fields appears at Mont. Code Ann. § 40-5-922(3)–(5).

Where to send: Reports must be submitted to the Montana Directory of New Hires, run by DPHHS. Employers can report:

• By first-class mail (using paper form, W-4, or department-approved equivalent)
• Electronically or magnetically (including fax or any agreed method)

The department’s web portal, file-transfer, fax, and mail are all accepted.

When to report:

• Paper (mail) reports must arrive within 20 days of the hire or rehire date.
• Electronic/magnetic transmissions can be batched: up to two submissions per month, spaced no less than 12 and no more than 16 days apart.

Multistate employers: A multistate employer may report all new hires to a single state, as permitted by federal law, if they provide written notice to the Department of Health and Human Services Secretary identifying their chosen reporting state.

Source: Mont. Code Ann. § 40-5-922 Source: MT DPHHS New Hire Reporting Program

Montana law requires employers to notify each newly hired employee of their wage rate and regular payday at the beginning of employment—but only if the employee makes a written request. Specifically, under Mont. Code Ann. § 39-3-203, an employer must inform every employee, in writing or by conspicuously posting the information at the workplace, of:

• The employee’s rate of wages (hourly, daily, weekly, monthly, or annual, as applicable), and
• The date of paydays.

This disclosure obligation applies before the employee commences work if a written demand is made. While some states require a mandatory written wage notice to every new hire, Montana’s statute only triggers if the employee asks for notice in writing. That said, many employers satisfy this requirement proactively by including wage rate and payday information in the written offer letter or onboarding packet—even absent a request—to minimize risk of later disputes.

Montana does not have a separate statutory requirement to disclose anticipated wage deductions at the time of hire; instead, employers must provide an itemized written statement of deductions at the time each payment of wages is made, as required under Mont. Code Ann. § 39-3-101.

No additional state-mandated wage disclosure (such as pay frequency, method of pay, or listing authorized deductions) applies at hire beyond what is detailed above. Montana employers should be aware that federal wage notice requirements (for example, FLSA poster duties) may still apply. For federal baseline rules, see /guides/united-states/hiring-and-onboarding.

Source: Mont. Code Ann. § 39-3-203 Source: Mont. Code Ann. § 39-3-101