What is the minimum wage in Montana?

Minimum wage rates in many states, including Montana, have seen adjustments over recent years. To ensure that your business stays in compliance, it’s important to be well-informed about current minimum wage laws and other labor regulations. The current minimum wage in Montana is $8.75 per hour. Some businesses or employees may encounter exceptions to minimum wage rules, such as businesses of smaller sizes or employees working in certain roles or industries.

Montana minimum wage laws

Federal, state and, sometimes, local governing bodies enforce a minimum wage that provides a base level of pay to employees. Minimum wage is designed to fairly compensate employees for work performed, protect them from unfair treatment and provide them with the basic level of income necessary to comfortably access living essentials.

In Montana, businesses not covered by the Fair Labor Standards Act (FLSA) whose gross annual sales are $110,000 or less aren’t required to pay regular minimum wage and may instead pay employees $4.00 per hour. If an employee is covered by the FLSA, the employer must pay them the federal minimum wage.

Montana uses the Consumer Price Index (CPI) to adjust the minimum wage annually according to inflation. As of 2021, the minimum wage in Montana was increased to $8.75 per hour. The minimum wage will be adjusted annually and rounded to the nearest 5 cents.

Some employees may be exempt from minimum wage and overtime pay rules. According to the Montana Department of Labor and Industry (DIL), exemptions may apply to certain employees, including:

• Individuals employed in executive, administrative, professional or other roles
• Employees defined as learners or apprentices
• Students
• Immediate family members of employers
• Individuals not regularly employed at a nonprofit organization that offer services on a compensation basis

Employers can review the full list of exemptions to determine if their employees are entitled to overtime pay.

Employers should post the DIL Montana’s Minimum Wage posterin a clear and accessible location within the business. This poster provides employees with information regarding minimum wage, exceptions, overtime and payment requirements.

If an employee believes their employer hasn’t compensated them accurately under the minimum wage laws, they can file a wage claim with the DIL. Claims must be filed within 180 days. The Employment Relations Division is responsible for settling the claim and conducts mediation and a hearing to determine the appropriate resolution.

Montana minimum wage for servers and other tipped employees

Some states have a separate minimum wage for servers and other tipped employees. In Montana, tipped employees are entitled to the regular minimum wage. Any tips received in addition to regular wages may be considered extra earnings.

Tip credits

Employers use tip credits to meet the minimum wage for employees whose regular cash wage and tips don’t equal statutory minimum wage. Tip credits are applicable in states with a separate minimum wage for tipped employees. It also may apply to states that refer to federal FLSA standards for minimum wage for tipped employees. Since the minimum wage in Montana applies to all eligible employees, the state doesn’t allow a tip credit.

Tip pooling

Some states allow employers to require their employees to contribute some or all of their wages to a tipping pool. This pool then redistributes tips equally among employees. Employers, managers and other supervisory staff aren’t usually permitted to withdraw tips from the pool.

In some states, employers may need to pay the difference to employees whose pooled tips and earnings don’t meet minimum wage requirements. Employers in Montana don’t need to worry about this since Montana doesn’t allow a tip credit and applies the same minimum wage to all employees.

Types of tipped employees

Tipped employees are those who receive voluntary payment from clients or customers. This shouldn’t be confused with a mandatory service charge or commission. Some examples of tipped employees include:

• Hairstylists
• Restaurant hosts
• Servers
• Baristas
• Estheticians

How to make sure tipped employees earn minimum wage

Because there’s no tipped minimum wage in Montana, employers have a simpler task of making sure that employees are paid correctly. It’s still important to keep track of tips for reporting and tax purposes, however, so employers may consider using a payroll and wage record and management system to keep track of employee earnings.

Montana minimum wage overtime pay

Employers are required to pay overtime to employees in circumstances where an employee works in excess of 40 hours within a seven-day workweek. Overtime is calculated as one-and-a-half times an employee’s regular rate of pay and applies to most employees who are also entitled to minimum wage.

Overtime doesn’t apply to holiday, vacation or sick hours when calculating total hours in the week. Some employees may be exempt from overtime, such as agricultural workers. Executive, administrative, professional and outside sales employees paid on a salary basis may be exempt from overtime in Montana, although FLSA coverage may still apply to nonexempt employees.

Montana minimum wage FAQs

What states have a $15 an hour minimum wage?

The only state to implement a $15 an hour minimum wage is the District of Columbia, although other states are scheduled to raise their minimum wage in the coming years. Montana isn’t currently scheduled to raise the minimum wage to $15 an hour but adjusts yearly according to the CPI.

What is the minimum wage for a 16-year-old in Montana?

Some states apply a training wage to minors that lets employers pay them a reduced minimum wage. Although Montana doesn’t permit a training wage, certain students or learners under the age of 18 may be subject to a reduced minimum wage.

What is a livable salary in Montana?

A livable wage or salary is determined as the amount necessary for an individual to easily access basic needs such as housing, health care and food. The World Population Review suggests that the livable wage in Montana is $47,000.

What is the minimum a salaried employee can make?

Montana doesn’t have a minimum salary amount for employees. Employees who work an average of 40 hours per week and are entitled to the minimum wage should receive at least $18,250 per year. The FLSA requires salaried exempt employees to be paid at least $35,568 per year.

What is the federal minimum wage?

The federal minimum wage is $7.25 per hour for nonexempt employees. Montana recently raised its minimum wage from the federal minimum to $8.75 per hour.