May 2021 Montana HR Legal Updates

Montana Changes Three Major Employment Laws

Update Applicable to:
Applicable to all employers operating within the state of Montana.

What happened?
Montana Governor Gianforte recently signed three bills that make significant changes to Montana’s Wrongful Discharge from Employment Act (WDEA), Human Rights Act, and Wage Protection Act.

What are the details?
The changes will be listed below in their applicable sections.

Wrongful Discharge from Employment Act: Previously, the WDEA required employers to at most have a probationary period that lasted six months. The new bill will increase this maximum to 12 months, with the possibility of the employer increasing this by an additional six months (for a total of 18 months).  Employers may now also terminate employees after the probationary period in cases where the employees have violated the employer’s written policies several times. Additionally, employers in line with recent Montana Supreme Court decisions will now have “the broadest discretion when deciding to discharge any managerial or supervisory employee.” Awards from successful lawsuits related to unlawful termination have also been changed. Unemployment benefits and income generated as a result of the unlawful termination will not be deducted from the award to the employee.

Employees will now only have six months to file a complaint of an unlawful discharge, as opposed to the previous three years.

Human Rights Act: Employers may not discriminate against a person’s vaccination status or use this status to reach a negative employment decision. This specifically applies to vaccines, which are being administered via an emergency use authorization from the Food and Drug Administration.

Wage Protection Act: These changes will now allow employers to require tip pooling, whereas previously Montana was one of the few states that allowed only voluntary tip pooling. Employers who require tip pooling must follow the below requirements:

  • An employer must notify its employees of any mandatory tip pooling arrangement.
  • A tip pooling arrangement may include employees involved in providing customer service or food preparation, including servers, hosts, bussers, dishwashers, and cooks. Employers and exempt salaried supervisors or managers, however, cannot participate in a tip pool but may keep tips they receive directly from customers based on services they directly provided to the customers.
  • There is no minimum or maximum contribution limits for mandatory tip pools, provided that an employer does not require employees to contribute more than the amount of tips they actually receive to a tip pool.
  • An employer that collects and redistributes employee tips as part of a tip pool must fully distribute any tips collected no later than the regular payday for the workweek in which the tips were collected.
  • An employer must maintain payroll and other records showing the tips received and distributed under the tip pooling arrangement.

An article containing a more detailed breakdown of the changes may be found here.

The bill impacting the WDEA can be found here.

The bill impacting the Montana Human Rights Act can be found here.

The bill impacting the Montana Wage Protection Act here.

What do employers need to do?
Employers should review their hiring policies and update them to take advantage of the changes made by the bills. Additionally, employers may need to update their hiring and employment practices surrounding vaccination status. Employers wanting to utilize mandatory tip pooling should review the requirements above and update their workplace policies as needed.