Montana Pay Transparency & Equity Laws: What Employers Must Know

Pay transparency and equity have taken center stage in Montana's employment laws, signaling a shift in how wages are discussed and determined. Recent legislative efforts focus on addressing long-standing issues like wage discrimination and lack of salary transparency, reshaping employer obligations in the state. These changes matter to employers because they bring new compliance requirements and open the door for fairer compensation practices.

Montana set the tone for these updates with Senate Bill No. 146, introduced in 2023. Known as the Wage Opportunity and Transparency Act, the bill laid out specific rules targeting wage gaps and salary equity. Employers now face clear expectations for disclosing pay ranges and eliminating discriminatory practices.

As of 2025, pay transparency remains a priority for Montana lawmakers, with ongoing efforts to expand and clarify these regulations. Employers must stay informed to navigate the evolving legal landscape and maintain compliant hiring and compensation practices.

Legislative Background in Montana

Senate Bill No. 146, introduced during Montana's 2023 legislative session, proposed the Wage Opportunity and Transparency Act to address wage disparities and promote fair compensation practices. The bill prohibits employers from paying employees of different sexes unequal wages for substantially similar work, regardless of job title. It also would have banned employers from requesting or using salary history during the hiring process, aiming to prevent past inequities from influencing future compensation.

While Senate Bill 146 did not pass, in 2025, Montana legislators continue to explore measures to strengthen pay equity laws. Discussions include expanding transparency requirements and refining rules to ensure compliance across different industries. These efforts reflect a broader commitment to fair pay practices statewide.

Wage Discrimination Prohibitions

Montana law defines wage discrimination as paying employees differently for substantially similar work based on protected characteristics. Employers are prohibited from basing pay discrepancies on factors like sex or gender identity. Wage Opportunity and Transparency Act (WOTA) regulations ensure that compensation decisions are fair, consistent, and free from bias.

Protected Classes

WOTA protects employees from wage discrimination tied to specific characteristics. Employers cannot justify pay disparities based on:

• Sex: This includes biological sex and gender identity, ensuring all employees performing similar work are compensated equitably.

• Intersection of Protected Traits: Discrimination is prohibited when sex intersects with other characteristics like race, age, or disability.

These provisions aim to foster workplace equity by focusing solely on the nature of the work and the qualifications of the employee.

Permissible Exceptions

Certain pay differences are allowed under the law if they are applied fairly and consistently. Employers may adjust wages based on factors such as:

• Performance-Based Systems: Higher wages tied to measurable outcomes, such as achieving specific sales goals or meeting key performance indicators.

• Seniority: Longer tenure with an organization may justify higher pay if the system is clearly defined and documented.

• Geographic Cost Adjustments: Pay differentials for roles in higher-cost areas are permissible when connected to the cost of living or market demand.

Employers must ensure that any pay adjustments align with WOTA's guidelines and are backed by clear, objective documentation. Vague or inconsistent practices could lead to legal challenges and financial penalties.

Salary History Ban Measures

Salary history bans aim to address long-standing pay disparities by removing past earnings from the hiring equation. The reasoning is simple: relying on previous wages can perpetuate inequities, especially for women and minorities who may have been underpaid in earlier roles. Instead, employers are encouraged to focus on the candidate's qualifications and the value of the job itself when determining compensation.

Montana's Wage Opportunity and Transparency Act (WOTA) explicitly prohibits employers from asking about or using an applicant's past wages during the hiring process. This restriction applies to direct questions to candidates, as well as inquiries made to former employers. Employers also cannot base hiring decisions or salary offers on whether a candidate chooses to share their previous earnings.

For employers, this means rethinking how pay offers are structured and communicated. Compensation decisions must now prioritize:

• Job Requirements: The specific skills, qualifications, and experience needed for the position.

• Market Data: Competitive pay ranges for similar roles within the industry and region.

• Internal Alignment: Ensuring salary consistency and fairness among current employees in comparable positions.

Recruiting practices will also require adjustments. Job postings must include clear pay ranges, giving candidates upfront transparency about potential earnings. Hiring teams should avoid salary history discussions entirely, as even casual mentions could lead to compliance issues. Providing training for recruiters and managers will help ensure interviews and negotiations stay within legal boundaries.

This shift promotes a fairer and more transparent hiring process. While it may require some operational changes, the resulting benefits — including increased trust from candidates and greater equity across the workforce — can create a stronger foundation for long-term success.

Disclosure Requirements for Employers

Montana’s pay transparency and equity state laws require employers to include specific compensation details in their job postings. Employers must provide either an exact hourly or salary rate or a defined range for the position, along with a clear description of benefits and additional compensation, such as bonuses or health insurance. This approach ensures candidates have a complete understanding of what a role offers before they apply.

For internal promotions or transfers, transparency is equally important. Employers are obligated to announce all available opportunities to current employees. When an employee is offered or interested in a new role within the organization, they can request the wage scale or salary range for that position. Employers must share this information to maintain fairness and consistency in internal pay practices.

Montana's requirements build on trends seen in states like Colorado and California, where pay range disclosures are also mandated. However, Montana's inclusion of specific rules for internal promotions adds a layer of accountability that isn't always present in other states. For example, while Oregon requires employers to provide pay ranges upon request, it doesn't mandate the proactive announcements for internal openings that Montana now enforces.

Employers operating in Montana should prepare by reviewing compensation structures and updating job posting templates to meet these requirements. Clear documentation of pay ranges, benefits, and job descriptions will help ensure compliance and create transparency that benefits both current employees and job candidates.

Recordkeeping Obligations

Recordkeeping requirements under Montana's pay transparency and equity state laws are straightforward but demand precision. Employers must retain wage rate histories and job descriptions for every employee throughout their tenure and for at least two years after their employment ends. Keeping these records organized and accessible ensures compliance and protects businesses from potential disputes or legal challenges.

Retaining Wage Rate History and Job Descriptions

Each employee's wage rate history must detail their hourly or salary compensation, including the value of any additional benefits or bonuses. For hourly roles, this means documenting both the base hourly rate and any supplementary compensation. For salaried employees, the record should reflect the total annual compensation package, broken down into clear, specific components.

Job descriptions must outline the primary duties and qualifications required for the role, as well as any performance metrics tied to pay decisions. These details provide the foundation for equitable compensation practices and demonstrate consistency across similar positions.

Why Accurate Records Matter

Accurate and complete records do more than meet legal requirements. They provide a clear trail that reinforces fair pay practices and shields employers from liability.

• Demonstrating Fairness: Wage histories and job descriptions establish a clear link between compensation and objective factors like skills, experience, or role responsibilities.

• Addressing Claims: If an employee questions their pay or alleges discrimination, detailed records offer clarity and documented evidence to resolve the issue.

• Monitoring Internal Trends: Regularly reviewing records can help employers identify pay discrepancies before they escalate into larger problems.

Recommendations for Effective Recordkeeping

Moving away from paper-based systems reduces errors and simplifies compliance. Digitizing employment records and implementing efficient organizational methods create a smoother process.

• Centralized Digital Storage: Use a secure digital platform to store wage histories and job descriptions for quick access during audits or internal reviews.

• Employee-Specific Files: Maintain all relevant documentation—such as compensation details, job descriptions, and performance evaluations—in individual employee records.

• Retention Tracking: Automate record retention timelines to ensure documents are kept for the required period and deleted when no longer needed.

• Routine Checks: Schedule periodic reviews of records to ensure accuracy and completeness. Address any inconsistencies promptly.

Well-maintained records not only fulfill legal requirements but also build trust and confidence in compensation practices. By organizing wage and role information thoughtfully, employers can create a system that supports transparency and compliance without unnecessary complexity.

Enforcement and Penalties

Montana's pay transparency and equity state laws come with clear enforcement mechanisms and consequences for non-compliance. The state commissioner leads efforts to uphold the law, resolve complaints, and impose penalties when employers violate wage transparency or equality requirements. Employers must be prepared for both oversight and accountability.

Role of the Commissioner

The commissioner oversees all aspects of enforcement related to wage equity and transparency laws in Montana. This includes investigating complaints, mediating disputes, and ensuring employers meet legal obligations. Employers may encounter the commissioner's involvement in several ways:

• Complaint Resolution: Employees can file claims if they suspect wage discrimination or notice violations, such as missing pay ranges in job postings. The commissioner may act as a mediator to resolve disputes.

• Investigations: Employers under investigation must provide records, such as wage histories and job descriptions, to verify compliance with pay equity laws.

• Rulemaking: The commissioner has the authority to establish additional rules to clarify employer responsibilities or adapt to evolving workplace practices.

Civil Actions and Legal Timelines

Employees seeking financial or legal relief can file lawsuits when informal resolution methods fail. The process includes specific timelines and potential outcomes that employers should understand:

• Two-Year Filing Deadline: Employees have two years to bring a claim against an employer for violations of pay equity laws.

• Three-Year Back Pay Limit: For ongoing violations, employees may recover up to three years' worth of unpaid wages.

• Legal Remedies: Courts can order employers to provide reinstatement, promotions, or wage adjustments, in addition to any monetary awards.

Employers who ignore or violate Montana's transparency and equity laws risk significant legal exposure, including reputational damage and disruptions to operations.

Financial Penalties for Violations

Non-compliance with Montana wage transparency and fairness laws can lead to steep financial penalties. Employers found in violation are responsible for several types of compensation and costs:

• Back Pay: Employers must pay employees the difference between their actual wages and what they should have earned.

• Liquidated Damages: Employees may receive additional compensation equal to the back pay owed, as reimbursement for delays in receiving fair wages.

• Legal Fees: Employers must cover reasonable attorney fees and court costs for employees who prevail in their claims.

Beyond monetary penalties, violations often lead to additional costs, such as implementing corrective measures, updating compliance protocols, and training management teams. Staying proactive and transparent in wage practices saves employers from these preventable expenses.

Best Practices for Compliance

Following Montana pay transparency and equity state laws means taking deliberate and consistent actions. Compliance starts with understanding your obligations and putting systems in place to meet them. Employers who stay proactive can avoid penalties while promoting fairness in their workplace.

Conduct Pay Audits Regularly

Pay audits highlight inconsistencies in compensation. They should be routine, detailed, and focused on identifying unexplained pay gaps.

• Review compensation data: Collect wage records, job descriptions, and employee classifications. Include base pay, bonuses, and non-cash benefits to ensure a full picture.

• Analyze similar roles: Compare employees in positions with substantially similar duties, regardless of job title. Identify any pay differences that aren't tied to clear, documented factors like performance or seniority.

• Document and adjust: Record everything from findings to corrective actions. If pay adjustments are needed, act promptly and update internal policies to prevent future discrepancies.

Schedule audits annually or during significant organizational changes, like mergers or departmental restructuring.

Train Managers and HR Staff

Supervisors and HR staff play a direct role in hiring, promotions, and pay-setting. Without proper training, they risk compliance missteps.

• Interviews: Train hiring teams to avoid salary history discussions. Walk through compliant alternatives, such as focusing on skills and qualifications.

• Compensation decisions: Provide clear guidelines for setting pay based on objective criteria like experience, certifications, or geographic cost differences.

• Promotions: Ensure managers understand wage scale disclosure requirements for internal opportunities. Reinforce the importance of clear communication when discussing pay with employees.

Refresh training regularly to account for new legal updates or company policy changes.

Standardize Job Postings

Job postings must consistently meet legal requirements. Preparing templates ensures every listing includes the right details.

• Pay transparency: Include specific hourly or salary ranges and a summary of benefits such as health insurance, bonuses, or retirement contributions.

• Clear qualifications: Use precise language to describe job duties and required skills. Avoid vague terms or overly broad descriptions.

• Compliance checks: Review postings for accuracy before publishing. Ensure they reflect current wage data and align with organizational policies.

Store templates in a centralized system to maintain consistency across hiring teams.

Centralize Recordkeeping

Maintaining accurate records simplifies compliance and protects against legal claims. Wage histories and job descriptions are especially important under Montana pay transparency and equity state laws.

• Organize documents: Create a system for storing records by employee, including compensation details and job descriptions.

• Retention compliance: Keep records for the required duration — employment plus two years — and automate reminders for retention deadlines.

• Accessibility: Use secure but accessible storage, so documents are easy to retrieve during audits or investigations.

Organized recordkeeping reduces the risk of errors and demonstrates compliance when questioned.

FAQs About Montana Pay Transparency and Equity

Montana's pay transparency and equity state laws introduce specific responsibilities for employers and protections for employees. Here's a closer look at common questions to help clarify obligations and ensure compliance.

What is the Equal Pay Act in Montana?

The Equal Pay Act in Montana strictly prohibits paying employees differently based on sex for substantially similar work. It sets clear boundaries to prevent gender-based pay disparities and ensures fairness across equivalent roles. Employers must justify any wage differences with objective criteria, such as measurable performance, seniority, or location-based adjustments.

By enforcing consistent pay practices, the law aims to create a level playing field for all employees performing comparable duties. Employers who fail to align with these regulations risk legal scrutiny and potential penalties.

Is Montana a use-it-or-lose-it state for paid leave?

Montana does not enforce a statewide "use-it-or-lose-it" rule for accrued leave. However, employers are free to establish policies that determine how unused leave is handled. Some organizations may opt to allow rollover, while others may set expiration dates for unused time off.

To avoid disputes, employers must communicate leave policies clearly through written documentation, such as employee handbooks. Transparency in handling accrued leave helps reduce confusion and ensures all parties understand the terms.

What are the layoff laws in Montana?

Unlike at-will employment states, Montana operates under the Wrongful Discharge from Employment Act (WDEA). The WDEA limits terminations without cause once employees complete their probationary period.

For layoffs, employers must document legitimate business reasons to justify termination, such as financial constraints or restructuring. Retaliatory or arbitrary terminations violate the WDEA, exposing employers to legal challenges. Clear communication about termination decisions, along with providing final paychecks and benefits details, can simplify the process and reduce liability.

Do other states have similar pay transparency regulations?

Yes, several states have already implemented pay transparency laws. For example:

• California and Colorado: Both states require salary ranges to appear in all job postings.

• Washington: Disclosures must include pay ranges and descriptions of benefits.

• New York: Employers must provide salary details upon request or for internal promotions.

Montana's ongoing efforts to clarify and refine pay transparency laws echo a broader trend in employment legislation. Employers in Montana should monitor developments closely to stay ahead of emerging requirements and maintain competitive hiring practices.

As Montana's pay transparency and equity laws continue to evolve, staying informed and proactive is essential for maintaining compliance and fostering a fair workplace. We're here to help you navigate these changes with confidence and ease. Book a demo today to see how our platform can simplify your HR processes and keep you ahead of the curve.