Mont. Code Ann. » TITLE 39. LABOR · CHAPTER 71. WORKERS' COMPENSATION · Part 4. Coverage, Liability, and Subrogation
Montana Code Annotated

Mont. Code Ann. § 39-71-405 (2026)

Liability Of Employer Who Contracts Work Out

✓ current as of May 2026
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  1. MCA Contents
  2. TITLE 39
  3. CHAPTER 71
  4. Part 4
  5. 39-71-405 Liability of employer who contracts work out

TITLE 39. LABOR

CHAPTER 71. WORKERS' COMPENSATION

Part 4. Coverage, Liability, and Subrogation

Liability Of Employer Who Contracts Work Out

39-71-405. Liability of employer who contracts work out. (1) An employer who contracts with an independent contractor to have work performed of a kind which is a regular or a recurrent part of the work of the trade, business, occupation, or profession of such employer is liable for the payment of benefits under this chapter to the employees of the contractor if the contractor has not properly complied with the coverage requirements of the Worker's Compensation Act. Any insurer who becomes liable for payment of benefits may recover the amount of benefits paid and to be paid and necessary expenses from the contractor primarily liable therein.

(2) Where an employer contracts to have any work to be done by a contractor other than an independent contractor, and the work so contracted to be done is a part or process in the trade or business of the employer, then the employer is liable to pay all benefits under this chapter to the same extent as if the work were done without the intervention of the contractor, and the work so contracted to be done shall not be construed to be casual employment. Where an employer contracts work to be done as specified in this subsection, the contractor and the contractor's employees shall come under that plan of compensation adopted by the employer.

(3) Where an employer contracts any work to be done, wholly or in part for the employer, by an independent contractor, where the work so contracted to be done is casual employment as to such employer, then the contractor shall become the employer for the purposes of this chapter.

History: (1)En. 92-410.1 by Sec. 1, Ch. 154, L. 1973; Sec. 92-410.1, R.C.M. 1947; (2), (3)En. Sec. 11, Ch. 96, L. 1915; re-en. Secs. 2901, 2902, 2903, R.C.M. 1921; re-en. Secs. 2901, 2902, 2903, R.C.M. 1935; Secs. 92-604, 92-605, 92-606, R.C.M. 1947; R.C.M. 1947, 92-410.1(part), 92-604, 92-605, 92-606; amd. Sec. 4, Ch. 103, L. 1979.

Notes of Decisions
Cited in 11 cases, 1983–2018 · leading case: McClure v. State Comp. Ins. Fund, 899 P.2d 1093 (Mont. 1995).
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McClure v. State Comp. Ins. Fund, 899 P.2d 1093 (Mont. 1995). · cites it 64× “They are: Did the Workers' Compensation Court err in its determination that McClure is not entitled to benefits under § 39-71-405, MCA? Did the Workers' Compensation court err in its determination that a claim for workers' compensation benefits based upon a third-party…”
Webb v. Montana Masonry Constr. Co., 761 P.2d 343 (Mont. 1988). · cites it 34× “Third, the 1973 Montana legislature implemented the new constitutional provision by amending § 39-71-405, MCA, to provide that employers such as Aldinger who were required to pay, as self-insurers or through their insurance, compensation on behalf of a "primarily liable"…”
Carlson v. Cain, 700 P.2d 607 (Mont. 1985). · cites it 14× “An insurer liable under section 39-71-405, MCA, is not entitled to subrogation under section 39-71-414, MCA.”
Carlson v. Cain, 664 P.2d 913 (Mont. 1983). · cites it 11× “If the Cains are found to be independent contractors, their potential liability to the Gazette is supported by section 39-71-405(1), MCA. If Jerry Cain is an employee of the Gazette, the Cains’ potential liability must be established by the contract alone.”
Stavenjord v. Montana State Fund, 2003 MT 67 (Mont. 2003). · cites it 4× “¶ 12 In response, the State Fund argued that benefits provided pursuant to § 39-71-405(2), MCA, are not technically "partial disability" benefits; the class of claimants entitled to benefits under the Workers' Compensation Act are not similarly situated to those claiming…”
Andrews v. Ford Constr., 786 P.2d 18 (Mont. 1990). · cites it 22× “The sole issue presented for review is whether the Workers’ Compensation Court erred in holding that § 39-71-405, MCA, is inapplicable to this case because no contractual relationship existed between appellant’s employer, Gasvoda Construction Co.”
Walling v. Hardy Constr., 807 P.2d 1335 (Mont. 1991). · cites it 5× “k to be done by a contractor other than an independent contractor, and the work so contracted to be done is a part or process in the trade or business of the employer, then the employer is liable to pay all benefits under this chapter to the same extent as if the work were done…”
State Comp. Ins. Fund v. Castle Mountain Corp., 739 P.2d 461 (Mont. 1987). · cites it 39× “Section 39-71-405, MCA, provides: “Liability of employer who contracts work out.”
Glaude v. State Comp. Ins. Fund, 894 P.2d 940 (Mont. 1995). · cites it 15× “Discussion Section 39-71-405(1), MCA, states: An employer who contracts with an independent contractor to have work performed of a kind which is a regular or a recurrent part of the work of the trade, business, occupation, or profession of such employer is liable for the payment…”
Ramsbacher v. Jim Palmer Trucking, 417 P.3d 313 (Mont. 2018). · cites it 2× “In Webb , a subcontractor failed to carry workers' compensation insurance and, pursuant to § 39-71-405, MCA, the general contractor became liable for the worker's claim.”
Liberty Nw. Ins. Corp. v. State Comp. Ins. Fund, 1998 MT 169 (Mont. 1998). · cites it 2× “As a result, Liberty began paying benefits to Park pursuant to § 39-71-405, MCA. Basically, this statute requires that an employer (in this case Brand S) who contracts with an independent contractor (McNeilly) is liable for payment of benefits to the employees of the independent…”
— Mont. Code Ann. § 39-71-405(1) — 4 cases
McClure v. State Comp. Ins. Fund, 899 P.2d 1093 (Mont. 1995). “They are: Did the Workers' Compensation Court err in its determination that McClure is not entitled to benefits under § 39-71-405, MCA? Did the Workers' Compensation court err in its determination that a claim for workers' compensation benefits based upon a third-party…”
Webb v. Montana Masonry Constr. Co., 761 P.2d 343 (Mont. 1988). “Third, the 1973 Montana legislature implemented the new constitutional provision by amending § 39-71-405, MCA, to provide that employers such as Aldinger who were required to pay, as self-insurers or through their insurance, compensation on behalf of a "primarily liable"…”
Carlson v. Cain, 664 P.2d 913 (Mont. 1983). “If the Cains are found to be independent contractors, their potential liability to the Gazette is supported by section 39-71-405(1), MCA. If Jerry Cain is an employee of the Gazette, the Cains’ potential liability must be established by the contract alone.”
Glaude v. State Comp. Ins. Fund, 894 P.2d 940 (Mont. 1995). “Discussion Section 39-71-405(1), MCA, states: An employer who contracts with an independent contractor to have work performed of a kind which is a regular or a recurrent part of the work of the trade, business, occupation, or profession of such employer is liable for the payment…”
— Mont. Code Ann. § 39-71-405(2) — 4 cases
Carlson v. Cain, 664 P.2d 913 (Mont. 1983). “If the Cains are found to be independent contractors, their potential liability to the Gazette is supported by section 39-71-405(1), MCA. If Jerry Cain is an employee of the Gazette, the Cains’ potential liability must be established by the contract alone.”
Stavenjord v. Montana State Fund, 2003 MT 67 (Mont. 2003). “¶ 12 In response, the State Fund argued that benefits provided pursuant to § 39-71-405(2), MCA, are not technically "partial disability" benefits; the class of claimants entitled to benefits under the Workers' Compensation Act are not similarly situated to those claiming…”
Walling v. Hardy Constr., 807 P.2d 1335 (Mont. 1991). “k to be done by a contractor other than an independent contractor, and the work so contracted to be done is a part or process in the trade or business of the employer, then the employer is liable to pay all benefits under this chapter to the same extent as if the work were done…”
State Comp. Ins. Fund v. Castle Mountain Corp., 739 P.2d 461 (Mont. 1987). “Section 39-71-405, MCA, provides: “Liability of employer who contracts work out.”
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