Montana Overtime Laws

April 7th 2024

Montana Labor Laws encompass various regulations that protect workers’ rights, including specific provisions addressing overtime pay. In Montana, employers must adhere to state overtime laws, which determine the compensation employees should receive for working beyond their regular working hours. These laws aim to ensure fair compensation for extra work and establish guidelines for both employers and employees regarding overtime eligibility and rates.

This article will provide information to successfully navigate Montana’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

Montana Overtime Rates

Overtime law in Montana is designed to prevent employees from being exploited by their employers. Employees who work over 40 hours per week are entitled to overtime pay at time-and-a-half (1.5) for every additional hour worked. 

Businesses generating revenue equal to or more than $110,000 annually must pay their employees a minimum wage of $10.30 per hour. In this case, overtime pay stands at $15.45 per hour.

On the other hand, a business with less than $110,000 in revenue and is exempt from the Fair Labor Standards Act has to pay employees a minimum wage of $4.00 an hour, and, if required, overtime pay at $6.00 an hour.

Overtime Entitlement in Montana

In Montana, certain employees are eligible for overtime pay, but not all workers are covered by these rules. For instance, farm workers are exempt from overtime regulations.

Additionally, employers who hire students to work at seasonal amusement or recreational areas and provide them with board, lodging, or other facilities are limited to a maximum workweek of 48 hours. However, if these students work more than 48 hours a week, they must be compensated at a rate of at least 1.5 times their regular hourly wage.

When it comes to firefighters and law enforcement officers employed by the state, the application of overtime provisions must align with the Fair Labor Standards Act and its corresponding regulations.

Read more about Overtime Exceptions and Exemptions in Montana.

Mandatory Overtime in Montana

In Montana, employers have the authority to require employees to work beyond their scheduled shifts when necessary. This means that an employer can ask an employee to work additional hours or overtime to meet the demands of the job or to fulfill assigned duties.

Employees need to understand that failing to comply with such requests may result in disciplinary action or even termination of employment. Employers have the right to expect employees to perform their assigned duties and fulfill their responsibilities, and failure to do so can have consequences.

Compensatory Time in Montana

In Montana, state agencies can decide whether to allow their FLSA-covered employees to accumulate and use nonexempt compensatory time, also known as “comp time”. Comp time is time off given to employees as an alternative to receiving overtime pay in cash.

It is important to note that Montana state agencies are not obligated to offer the option of earning and using nonexempt comp time to their covered employees. The decision to provide this alternative rests with the individual state agencies.

When a state agency in Montana decides to allow nonexempt comp time, they must adhere to the Fair Labor Standards Act for state and local government employees. These federal regulations require the establishment of agreements or understandings with employees before they perform any work that may involve the use of comp time. Additionally, the regulations specify that cash payments should be made for any unused nonexempt compensatory time upon termination of employment.

In addition to the federal requirements, Montana state agencies must:

  • Obtain approval in advance from the appropriate authority when employees need to work hours that may result in overtime compensation or the accrual of comp time.
  • Cash out any unused nonexempt comp time when an employee transfers from one agency to another.
  • State agencies have the option to establish a lower maximum limit for accumulating comp time compared to what is allowed in federal regulations.
  • State agencies can choose to pay cash for all or part of an employee’s accrued comp time balance at any time.
  • State agencies may adjust an employee’s work schedule or require them to take unpaid time off during a workweek to prevent eligibility for overtime compensation or the accrual of comp time.
  • State agencies may require the cash out of unused comp time if an employee transitions from nonexempt to exempt status due to a personnel action like a promotion or reassignment. If the agency allows the employee to retain a comp time balance, it must either allow the employee to use that time off or provide cash payment for any unused comp time upon termination of employment.

Calculating Overtime with Commission in Montana

In Montana, when an employee is paid on a commission, their regular rate is determined by dividing their total weekly earnings by the total number of hours they worked that week. If the employee works more than 40 hours in a week, they are entitled to receive overtime pay at half of their regular rate for each additional hour worked, on top of their full commission.

For example, let’s say an employee works 45 hours a week at a rate of $10.30/hour (Montana minimum wage) and receives $50 in commissions for that week. 

(Total hours x Hourly Rate) + Commission

= (45 x 10.30) + 50

= $513.5 (total earnings for the week)

Then, divide that by the total hours worked in the week.

= $513.5 / 45

=$11.41 (new regular hourly rate)

To determine the overtime rate for the commissioned employees, we need to take that new regular hourly rate and halve it.

$11.41 / 2

= $5.71

Since the employee worked an extra 4 hours in the week, that makes his overtime compensation $28.55 ($5.71 x 5 hours).

The amount will vary according to the hours worked, hourly rate, and commission earned.

Overtime Exceptions and Exemptions in Montana

Certain occupations are exempt from the overtime rules outlined in the Fair Labor Standards Act (FLSA). This means that employees in these specific jobs are not entitled to receive overtime pay for working more than 40 hours in a workweek. Here are some examples of occupations that fall under this exemption:

  • An employee who is subject to the authority of the United States Secretary of Transportation to set qualifications and maximum working hours.
  • A person who works as a buyer for poultry, eggs, cream, or milk in their raw or natural form, but is not employed in the production or processing of these products.
  • An employee who works as a salesperson, part person, or mechanic and is paid based on commissions or contracts, and their main role is to sell or service automobiles, trucks, mobile homes, recreational vehicles, or farm implements. This applies to employees working for a nonmanufacturing business that primarily sells these vehicles or implements directly to end consumers.
  • A salesperson whose main job is to sell trailers, boats, or aircraft is exempt from certain overtime rules if they work for a nonmanufacturing business that primarily sells these items directly to end consumers.
  • A salesperson whose main job is to sell advertising for a radio or television station and is paid based on commissions or contracts is exempt from certain overtime rules.
  • An employee working as a driver or driver’s helper for local deliveries is exempt from certain overtime rules if they are compensated based on trip rates or other delivery payment plans. This exemption applies when the commissioner determines that the payment plan is designed to reduce the employees’ working hours to or below the maximum allowed for their workweek.
  • An employee working in agriculture who is involved in the operation or maintenance of non-profit irrigation systems such as ditches, canals, reservoirs, or waterways exclusively used for supplying and storing water for agricultural purposes, and not operated under a sharecropping arrangement, is exempt from certain overtime rules.
  • An employee who works for a farmer in the agricultural industry.
  • An employee who works for a small agricultural establishment, such as a country elevator, where products and services used in farm operations are sold, as long as the establishment employs no more than five employees.
  • An employee who works as a driver for a taxi company.
  • An employee and their spouse working for a nonprofit educational institution as surrogate parents for orphaned or disadvantaged children. They live in the institution’s residential facilities, receive free board and lodging, and are jointly paid a minimum annual salary of $10,000.
  • An employee involved in tree planting, tree care, timber-related activities, or transporting forestry products, as long as the employer has no more than eight employees in the forestry or lumbering operations.
  • An employee of a sheriff’s office working under an alternative work period instead of a traditional workweek.
  • An employee of a municipal or county government working under a collective bargaining agreement or mutual agreement for a work period of up to 40 hours in 7 days. Any hours worked beyond the 40-hour work period must be paid at a rate of 1.5 times the regular hourly wage.
  • An employee of a hospital or similar care facility working up to 80 hours in 14 days as agreed upon in a collective bargaining agreement or mutual agreement. Any hours worked beyond 8 hours in a day or 80 hours in the 14 days must be paid at a rate of 1.5 times the regular hourly wage.
  • A firefighter working according to a work period defined in a collective bargaining agreement between a public employer and a firefighters’ organization or their representative.
  • An officer or employee of a police department in a large city working a work period set by the police chief.
  • An employee of a public safety department working under a set work period.
  • An employee of a retail store who earns more than 1.5 times the minimum hourly rate and receives more than half of their pay through commissions.
  • An employee hired by a licensed outfitter to work as a guide, cook, camp tender, outfitter’s assistant, or livestock handler.
  • An employee working as a radio announcer, news editor, or chief engineer for an employer in a second or third-class city or town.

Statute of Limitations For Unpaid Overtime Claims in Montana

In Montana, if you want to recover unpaid back overtime wages, you need to file a lawsuit within a specific timeframe. This timeframe is based on the requirements of the Fair Labor Standards Act (FLSA). According to the FLSA, you have two years from the date of the employer’s wage violation to file a lawsuit and seek compensation for unpaid back overtime wages.

Let’s say an employee file a lawsuit today, they can only seek recovery of overtime back wages for the previous 2 years, sometimes three years, depending on the circumstances.

It’s important to be aware of this deadline and take timely action if an employer has violated overtime pay regulations. Filing a lawsuit within the prescribed timeframe ensures that an employee has the opportunity to seek the compensation you deserve for any unpaid overtime wages.

Misclassification of Employees in Montana

The misclassification of employees to avoid paying overtime wages has been a longstanding issue in labor practices. Some employers, whether intentionally or inadvertently, misclassify their workers as exempt from overtime requirements, resulting in employees being deprived of their rightful compensation for working beyond the standard workweek. This practice not only undermines the financial well-being of workers but also violates labor laws that are in place to protect employees’ rights.

In Montana, if a person or employer misclassifies an employee, they may be liable for fines assessed by the Department. The fines can amount to a maximum of $5,000 for each violation. To ensure consistency, the Department will establish rules specifying the fines applicable for a first offense, subsequent offenses, and cases involving multiple violations. 

It is important to note that the Department has the authority to place a lien on the assets of the person or employer to secure the payment of the fines. If a person or employer disagrees with a fine assessed by the Department under this section, they have the right to file an appeal within 30 days from the date the fine was assessed. The appeal process involves mediation, and if the issue remains unresolved, it will be transferred to the employee’s compensation court for resolution.

Legal Cases Relating to Overtime Compensation in Montana

Below, we present law cases relating to fair overtime compensation for employees in Montana: 

1. Log Truck Driver Appeals Courts Dismissal of Unpaid Overtime Wages

In the case of Arlington v. Miller’s Trucking, Inc., Oliver Arlington, a former log truck driver for Miller’s Trucking, claimed that he was owed wages based on a verbal employment agreement guaranteeing him a yearly salary of $60,000 to $70,000. He also claimed unpaid overtime wages. However, the initial hearing officer dismissed his claims and stated that there was no agreement for a guaranteed wage over $60,000 per year and that Arlington was exempt from the Fair Labor Standards Act’s overtime requirements. Arlington appealed this decision, and the court decided to remand the case.

On remand, Arlington presented job advertisements as evidence. However, the hearing officer concluded that the ads didn’t prove the existence of an agreement for a wage higher than $60,000 per year. Arlington also claimed unpaid overtime wages and provided evidence of the hours he worked, showing he worked a lot of overtime. Miller’s challenged the credibility of Arlington’s evidence, suggesting that he exaggerated his claimed hours. 

The hearing officer found that Miller’s couldn’t keep records of Arlington’s hours because Arlington didn’t provide them as requested. The officer also found inconsistencies in Arlington’s records and conflicting testimonies from other employees. As a result, the hearing officer determined that Arlington didn’t provide enough evidence to prove the number of hours he worked.

The court concluded that there was sufficient credible evidence supporting that there was no oral agreement between Arlington and Miller’s. Second, the court found that the hearing officer was wrong to blame Arlington for the lack of records and to set a higher burden of proof. The court clarified that it’s the employer’s responsibility to maintain accurate records, and Arlington’s evidence, although not perfect, met the legal standards required. The case was remanded again.

Key lessons from this case:

  • Verbal employment agreements should be supported by substantial evidence to prove their existence.
  • Employees can use their records to substantiate their claims for unpaid overtime if the employer fails to keep proper records.
  • Employees cannot be penalized for an employer’s lack of maintaining accurate employee records.
2. Employee Fails to Provide Sufficient Evidence to Prove Overtime Violations

In the case of Boose v. FNP, Inc., Travis Boose filed a complaint against First National Pawn (FNP) for failure to pay overtime wages. Boose claimed that he and other employees entered into employment agreements that did not reflect their actual schedule or rate of pay. They were paid a fixed monthly salary regardless of the number of hours they worked. Boose further alleged that they were required to arrive at work early, stay late regularly, and occasionally work on scheduled days off without receiving additional compensation for the extra hours worked. 

FNP argued that Boose did not identify a specific workweek or provided sufficient factual details to support a plausible claim for unpaid overtime. FNP argued that Boose’s allegations were too conclusory and lacked factual specificity. The court agreed with FNP that Boose’s complaint and proposed amended complaint do not contain sufficient detail about the length and frequency of unpaid work to support a reasonable inference that they worked more than 40 hours in a given week. Boose’s general allegations that employees were required to arrive early, stay late, and occasionally work on scheduled days off were deemed insufficient. 

Ultimately, the court recommended granting FNP’s motion to dismiss the FLSA claim but allowed Boose to file an amended complaint to address the pleading deficiencies.

Key lessons from this case:

  • Employment agreements should accurately reflect the employee’s actual schedule and rate of pay.
  • Paying employees a fixed monthly salary regardless of the number of hours worked does not absolve employers from their obligation to pay overtime wages for hours exceeding the statutory threshold.
  • To establish a plausible claim for unpaid overtime, it is important to provide sufficient factual details regarding the length and frequency of unpaid work.
3. Laborers Seek Overtime Pay for Being “On-Call” During Lunch Breaks

In this case, laborers who were employed in Butte-Silver Bow County’s Water Utility Division had filed a grievance alleging that their schedules had been unilaterally changed without consent or negotiation. After the grievance was denied, they filed wage claims with the Montana Department of Labor and Industry seeking overtime compensation. However, the claims were closed as the Wage and Hour Unit lacked jurisdiction under the Collective Bargaining Agreement (CBA). 

The laborers requested their claims be reopened, asserting that they had worked through their lunch breaks and were owed overtime. The Wage and Hour Unit dismissed the claims, concluding that the laboPeriodsmpletely relieved of duty during their lunch breaks and did not present evidence of being “on call.” The laborers appealed, and the court had to determine whether the laborers were “on call” during their lunch breaks and if they were properly compensated.

The court found that the laborers did not exhaust the grievance procedures within the CBA, which were required to resolve disputes between employers and employees. Additionally, the court determined that the Wage and Hour Unit’s jurisdiction was limited to violations of the Montana Wage Protection Act and the Fair Labor Standards Act. 

The Hearing Officer concluded that the laborers were not “on call” during their lunch breaks based on various factors, and there was substantial evidence supporting this finding. The laborers were fully compensated, and their claims were properly dismissed.

Key lessons from this case:

  • A grievance procedure is a formal process that allows employees to raise concerns or complaints related to their employment.
  • Time periods during which an employee is completely relieved from duty and can use the time effectively for personal purposes are generally not considered hours worked.
  • If an employee is required to perform work during their break, they should be compensated with overtime pay for the time worked.

Learn more about Montana Labor Laws through our detailed guide.

Important Cautionary Note

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