Staffing agency license in Montana: repealed in 1995, but PEOs and good cause still apply

Montana does not license employment or staffing agencies. The state's Employment Agency Act, Title 39, chapter 5 of the Montana Code Annotated, was repealed in full by the 1995 Legislature, in a large bill that rewrote the state's occupational licensing laws and listed among its purposes "eliminating the state license requirement for employment agencies." What Montana does regulate is professional employer organizations, which need an annual license from the Department of Labor and Industry, and, for every employer, a statutory good-cause discharge rule that staffing firms with long-running temps should understand.

This page covers the 1995 repeal, PEO licensing, health care staffing, the recruiting and discharge rules that still apply, and the employer accounts a Montana staffing firm needs. For other states, see employment agency license requirements.

The 1995 repeal

Montana's Employment Agency Act dated from 1971 (Chapter 430, Laws of 1971) and filled four parts of Title 39, chapter 5: general provisions, licensing, contracts and fees, and investigations and enforcement. As of October 2026, every one of its sections, 39-5-101 through 39-5-406, reads "Repealed" on the Legislature's code site, with the note "Sec. 128, Ch. 429, L. 1995."

Chapter 429 was House Bill 518 of the 1995 session, which revised the laws for occupations regulated by licensing boards attached to the Department of Commerce and, in its title, eliminated "the state license requirement for employment agencies and polygraph examiners." Its Section 128 repealed all of chapter 5 along with dozens of board provisions in Title 37. The last printed version in the bill file set a general effective date of October 1, 1995; I could not view the enrolled copy, but that version's section numbering matches the repeal note.

The old act was aimed at agencies that charged job seekers. A tabled 1987 bill reprinted the definition then in force: a business deriving any part of its income from fees received from applicants, not including temporary service contractors. If a vendor checklist asks for a Montana license number, the accurate answer is that the requirement was repealed in 1995.

What applies, by business model

Fees to job seekers and recruiting claims

The repeal took the fee schedules and contract rules in part 3 of the old act with it, and I found no replacement cap on what an agency may charge a candidate. Three surviving statutes still shape how a Montana recruiter deals with candidates:

• Deception about the job. MCA 39-2-303 bars any person or entity doing business in Montana from inducing workers to move from one place to another in the state through deception, misrepresentation or false advertising about the kind of work, the conditions of employment, or a pending strike or labor dispute. A worker who is harmed can recover all damages sustained plus reasonable attorney fees. Relocation pitches for out-of-town assignments are where this bites.
• Medical exam costs. MCA 39-2-301 makes it unlawful for an employer to require an employee or applicant to pay for a medical examination, or for records of one, as a condition of employment.
• Consumer protection. MCA 30-14-103 declares unfair or deceptive acts or practices in any trade or commerce unlawful. If you charge candidates for anything, such as resume or placement services, put the terms in a clear written agreement.

PEO licensing with the Department of Labor and Industry

Title 39, chapter 8, enacted in 1995 (Chapter 344, Laws of 1995), requires a license for anyone acting as a professional employer organization or group in Montana. MCA 39-8-201 subjects anyone who enters a professional employer arrangement or employee leasing arrangement with a Montana client without a license to the penalties in 39-8-302, which include a misdemeanor fine of up to $1,000, up to a year in jail, or both. The Employment Standards Division runs the program.

• Term. A license is valid for one year from issuance, and MCA 39-8-204 requires the renewal application at least 30 days before it expires.
• Net worth. Unrestricted applicants must keep a tangible accounting net worth of at least $50,000, shown by audited financial statements, or by compiled statements plus a $100,000 security deposit, and must keep positive working capital.
• Restricted license. For an out-of-state PEO licensed in a home state that grants Montana the same privilege, with no Montana office or sales force, no solicitation of Montana clients, and no more than 100 leased employees working in Montana.
• Ongoing duties. The department's initial application (revised September 2025) asks for a Montana withholding number, an unemployment insurance account, and independent CPA quarterly submissions showing payroll taxes were paid. The department's page says background checks for controlling persons are no longer required as of October 1, 2025.

The line between a PEO and a staffing firm is drawn in MCA 39-8-102. A professional employer arrangement is one that is "ongoing rather than temporary in nature" with shared employer responsibilities, and the definition expressly excludes services performed by a temporary service contractor: a business that hires its own employees and assigns them to clients for work with a finite ending date. Supplying temps is not a PEO business; taking over a client's existing workforce indefinitely is.

Health care staffing: no state registration found

Many states created health care staffing agency registration after 2020. I found no Montana equivalent as of October 2026. The Department of Public Health and Human Services list of licensed facility types includes hospitals, long-term care facilities, home health agencies and others, but no staffing or nurse pool category, and the definitions in MCA 50-5-101 do not mention staffing agencies. Montana's Legislature meets in regular session in odd-numbered years, so watch the 2027 session.

Two health care rules still matter to staffing firms:

• Home health is licensed. MCA 50-5-101 defines a home health agency as an organization providing home health services to individuals where they live, and lists it as a health care facility. If you send caregivers into patients' homes under your own name, rather than to a hospital or nursing facility, check whether you are operating a home health agency.
• Nurse licensure. The Montana Board of Nursing says the state has been a member of the Nurse Licensure Compact since 2015, so nurses with a multistate license from another compact state can work in Montana. Verify each license before a shift.

Wrongful discharge: the rule for long assignments

Montana is not an at-will state once probation ends. Under the Wrongful Discharge from Employment Act, MCA 39-2-904 makes a discharge wrongful if it was not for good cause and the employee had completed the employer's probationary period. MCA 39-2-910, added in 2021, sets that period at 12 months if the employer does not establish one, extendable to no more than 18 months in total.

This reaches staffing firms because your temps are your employees: MCA 39-2-903 defines an employee as a person who works for another for hire, and defines discharge to include layoff for lack of work. Good cause includes legitimate business reasons determined in the employer's reasonable business judgment, so the end of a client assignment may well qualify, but document the reason each time. MCA 39-2-912 exempts employees under a written contract for a specific term. Set your probationary period in writing at hire.

Employer accounts every Montana staffing firm needs

• Unemployment insurance with the Department of Labor and Industry; the staffing firm is the employer of record for its temps.
• Workers' compensation under Title 39, chapter 71. MCA 39-71-117(2) makes a temporary service contractor the employer of a temporary worker for premium and loss experience purposes. See staffing agency insurance requirements.
• Withholding with the Department of Revenue, and Secretary of State registration for out-of-state entities.
• Interview recordings. If you record screens, see Montana recording consent law for interviews.

The full setup sequence is in how to start a staffing agency. Montana's neighbors differ: Utah has no state license but lets cities and counties license agencies (see staffing agency license in Utah), and Washington still licenses agencies under its Employment Agency Act while exempting temporary service contractors (see staffing agency license in Washington).

A Montana checklist

MONTANA CHECK — [date] — owner: [name]

Model:
  [ ] Direct hire / search / temp: no state agency license
      (Employment Agency Act repealed, Sec. 128, Ch. 429, L. 1995)
  [ ] Co-employment of client workforce: DLI PEO license
      ($750 unrestricted / $500 restricted; renew 30 days early)

Candidates:
  [ ] Job ads and relocation pitches accurate (MCA 39-2-303)
  [ ] Candidates never pay for medical exams (MCA 39-2-301)
  [ ] Any candidate fee in a written agreement

Health care:
  [ ] No staffing registration found; home health? check DPHHS
  [ ] Nurse licenses verified (Montana or compact)

Discharge:
  [ ] Probationary period set in writing at hire
  [ ] End-of-assignment reasons documented

Employer accounts:
  DLI UI account; workers' comp; DOR withholding        [ ]
Next review: [date]

Re-check after the 2027 legislative session, in case Montana joins the states that register health care staffing agencies, and before you take on any client arrangement that looks ongoing rather than temporary.