Introduction to employment laws in South Dakota
Overview
South Dakota has several state-specific and federal labor laws that cover minimum wage, workplace safety, and discrimination. Understanding and following these regulations is crucial for maintaining a compliant workplace.
In this guide, we’ll help you to stay compliant while hiring and manage employees in the state.
Employing in South Dakota: Key employment laws and practices
Standard work hours
In South Dakota, the concept of full-time employment typically translates into a work week of 30 to 40 hours. This standard isn’t legally formalized but generally accepted by employers and employees alike. It’s worth noting that there are no specific laws that define full-time hours for contractual or self-employed professionals in South Dakota. Federal guidelines apply to all forms of employment.
For non-exempt employees working more than 40 hours per week, overtime payment becomes applicable under the Fair Labor Standards Act (FLSA).
Exemptions apply for workers earning over the state or federal threshold, those with executive or managerial roles, or professionals in certified or licensed fields such as law, accounting, architecture, or engineering. The salary threshold for exemption in South Dakota is currently $684 per week.
Minimum wage and overtime
In South Dakota, the minimum wage is set at $11.20 per hour. For non-exempt employees who work more than 40 hours in a week, overtime pay of 1.5x their regular pay rate is mandated under the federal Fair Labor Standards Act.
Insurance and benefits
Employers in South Dakota have specific obligations concerning employee benefits. These include contribution toward unemployment insurance at the state level and FICA Social Security and Medicare at the federal level.
The total employment cost for employers can range from 9.45% to 24.20% depending on various factors. Employers in South Dakota must also carry workers’ compensation insurance.
Despite there being no state income tax in South Dakota, employers must be knowledgeable about federal tax brackets to accurately calculate withholdings for employees.
In addition to these contributions, employers typically provide health, dental, and vision insurance, retirement benefits, and 401k options as part of their comprehensive benefits package.
Benefit | Percentage |
Unemployment insurance | 0% – 0.3% for positive-rated experienced employers, 0.8% – 8.8% for negative-rated experienced employers |
FICA Social Security | 6.20% |
FICA Medicare | 1.45% |
Multiplier makes it easy to manage benefits for South Dakota employees.
Meal and rest periods
It is crucial for employers to familiarize themselves with the Fair Labor Standards Act (FLSA) federal provisions regarding breaks and meal periods.
South Dakota employment laws do not mandate specific meal or rest breaks for employees for adults or minors. If an employer decides to provide breaks, however, the U.S. Department of Labor’s regulations might apply, which state that breaks of five to 20 minutes are considered part of the workday, for which employees must be paid. When it comes to meal breaks, if the break is longer than 20 minutes and the employee is free from all duties, this time can be unpaid.
Anti-discrimination laws
South Dakota HR compliance practices must align with both federal and state regulations for anti-discrimination laws. The South Dakota Human Rights Act prohibits employers from discriminating against employees based on race, color, creed, religion, sex, ancestry, disability, or national origin. This law applies to businesses with 15 or more employees.
South Dakota law also forbids employers from making any pre-employment inquiries that express any limitation or discrimination based on these protected classes. Employers must also adhere to federal protections provided by Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), and the Americans with Disabilities Act (ADA), among others.
These laws prohibit discrimination based on race, color, religion, sex (including pregnancy and gender identity), national origin, age (40 or older), disability or genetic information.
Leave policies
When it comes to leave policies in South Dakota, there is no specific state law mandating paid vacation leave, sick leave, or other personal leave for employees in private-sector employment. Most employers opt to provide such benefits to attract and retain quality employees. Any such policies should be clearly outlined in the company’s employee handbook or the employment contract.
Under federal law, the Family Medical Leave Act (FMLA) allows eligible employees up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons. South Dakota employers must adhere to these FMLA regulations if they have 50 or more employees.
Leave type | Description |
Vacation leave | No statutory requirements |
Sick leave | No statutory requirements |
Holiday leave | No statutory requirements |
Jury duty leave | Employers required to provide unpaid, job-protected leave |
Voting leave | Paid leave up to two hours for any municipal, county, state, or federal primary or general election |
Easily onboard employees in South Dakota?
Termination laws
In South Dakota, most employees are employed “at will,” meaning either the employer or the employee can end the employment relationship without providing a reason or notice. However, it’s common practice for employers to pay out any accrued but unused vacation time if an employee provides some advanced notice of resignation.
Federal laws, such as the Worker Adjustment and Retraining Notification (WARN) Act, require employers to give 60 days’ notice to impacted employees, labor union representatives, and certain government officials in case of mass layoffs or plant closures.
Safety and health
South Dakota does not have a federally approved occupational safety and health regulatory program. Therefore, federal Occupational Safety and Health Administration (OSHA) regulations govern the state’s private sector workplaces.
Employers in South Dakota are required to provide their employees with a workplace free from recognized hazards that cause or are likely to cause death or serious physical harm.
Taxes in South Dakota
In South Dakota, there is no state income tax. Employers and employees must contribute to federal taxes such as Social Security and Medicare.
Tax | Employee contribution | Employer contribution |
FICA Social Security | 6.2% (up to an annual salary of $168,600) | 6.2% (up to an annual salary of $168,600) |
FICA Medicare | 1.45%; additional 0.9% on earnings over $200,000 | 1.45% |
Unemployment insurance | None | Varies |
Federal Unemployment Tax Act (FUTA) | None | 0.6% – 6.00% |
Managing South Dakota employees with an Employer of Record (EOR)
As we’ve seen, in South Dakota, a complex network of federal and state laws governs the employment landscape. This is where Multiplier’s expertise comes in.
As a leading Employer of Record (EOR) solution, Multiplier enables businesses to legally employ full-time workers in over 150 countries without establishing local entities. This, coupled with our Global Payroll platform, makes it easy to pay international employees and contractors in South Dakota, handling local taxes, contributions, and withholdings seamlessly. In addition to handling payroll, we also provide comprehensive benefits administration services and immigration support, ensuring your business remains compliant at all times.
Book a demo with us to learn more about how we can help streamline your processes while ensuring you stay ahead of ever-changing employment laws and regulations in South Dakota.
FAQs
In South Dakota, there is no law that clearly defines what constitutes full-time employment. Generally, full-time employment is considered to be between 30 and 40 hours per week.
Under the federal Fair Labor Standards Act (FLSA), non-exempt employees are entitled to overtime pay of 1.5x their regular pay rate if they work more than 40 hours in a week. There are certain exemptions to this rule based on an employee’s salary level and the nature of their duties.
The minimum state wage for private sector employees in South Dakota is currently $11.20 per hour.
Employers in South Dakota are required to contribute to Unemployment Insurance (0.50%), FICA Social Security (6.20%), FICA Medicare (1.45%), and the FUTA (Federal Unemployment Tax Act) tax rate (0.60% – 6.00%).
