Compliance Watch:

What are my rights as an hourly employee in South Dakota?

As of 1st January 2024, the current minimum wage in South Dakota is set at $11.20 per hour and is linked to the Consumer Price Index (CPI), which increases the minimum wage annually in direct proportion to inflationary pressures. Therefore, an hourly wage earner in the state of South Dakota is expected to earn $432 in a single 40-hour workweek.

The following categories of employees listed below are legally exempt from earning the state’s minimum hourly wage under both the federal Fair Labor Standards Act and South Dakota’s statutory laws:

• Tipped Employees: Tipped employees can be paid a lower minimum hourly wage than that fixed by the state but only if the hourly wage combined with the tips add up to the state’s minimum wage of $11.20.
• Full-time students: High school or college students working part time may earn 85% of South Dakota’s minimum hourly wage for up to 20 hours of work per week.
• Employees below 20 years old: The federal law permits any employers to pay employees below the age of 20 an hourly training pay of $4.25 in the first 90 days of employment.
• Outside salespeople.
• Employees working as volunteers of a charitable, religious, or other nonprofit organisation.
• Employees working in seasonal amusement or recreational establishments.
• Casual babysitters
• Administrative, executive, or professional employees.
• Employees who are computer professionals.

In South Dakota, there are no state laws applicable in the regulation of overtime compensation.  Therefore, the legal provisions of the federal overtime regulations set forth in the Fair Labor Standards Act (FLSA) prevail in this regard. 

Under federal law, hours worked beyond 40 hours in a given work week are considered as overtime hours which must be compensated at an hourly rate of one and a half times an employee’s regular hourly wage. Thus, an hourly wage earner in South Dakota typically earns a minimum pay of $16.80 per hour worked overtime.

• Specific commissioned employees of retail or service establishments; auto, truck, trailer, farm implement, boat, or aircraft sales-workers; or parts-clerks and mechanics servicing autos, trucks, or farm implements, who are employed by non-manufacturing establishments that primarily sell these items to ultimate purchasers;
• Employees of railroads and air carriers, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees paid on approved trip rate plans;
• Announcers, news editors, and chief engineers of specific non-metropolitan broadcasting stations;
• Employees working in domestic service and live in the employer’s residence;
• Motion picture theatre employees; and
• Farmers.

Similar to many other U.S. states, the state of South Dakota has no laws governing rest and meal breaks and the federal Fair Labor Standards Act does not mandate employers to provide such breaks to employees either. However, federal law stipulates that an employer who decides to extend work breaks to its employees must compensate for rest breaks that last 20 minutes or less and are not required to do the same for meal breaks that are 30 minutes or longer in length, provided that the employee is entirely off duties from work during that time.

As for employed nursing mothers, the Fair Labor Standards Act requires employers to accommodate their needs by providing them with regular unpaid daily breaks to pump milk in a private non-washroom area that is free from intrusion by the public or work colleagues for up to a year after they have given birth. If feasible, breastfeeding breaks must run concurrently with any other paid or unpaid break.

• Military leave: The federal Uniformed Services Employment and Reemployment Rights Act (USERRA) entitles South Dakota employees who are military members to 5 years of unpaid employment-protected leave for undertaking military duties, along with the employment opportunity to be reinstated to their previously held position. In addition, employees covered under this Act are also eligible for the continuation of group healthcare benefits for 24 months within the duration of their leave.
• Voting leave: According to section 12-3-5 of South Dakota’s Codified Laws,  employees are granted 2 hours of mandatory paid leave to vote if they are unable to find time to vote for 2 hours outside their working hours
• Jury duty leave: Under section 16-13-41.1 of South Dakota’s Codified Laws,  employees are entitled to take unpaid temporary leave of absence for responding to a jury summons or serving on a jury. The state’s statutory laws protect employees in this regard by prohibiting employers from punishing their employees by taking personnel actions against them for responding to a jury summons.
• Family and Medical leave: The federal legal provisions established under the Family and Medical Leave Act provide employees with up to 12 weeks of uncompensated leave in a year to manage personal affairs associated with; childbirth or child adoption, a serious medical issue which affects either the employee or their immediate family relative or particular military-related activities. Employees qualify for this leave only if:  
  • They were hired under the same employer for a minimum duration of 12 months before taking their leave.
  • They must have worked for a minimum time of 1,250 hours during the 12 month employment duration under the same employer preceding their leave.
  • The employer has 50 or more employees within a 75 mile radius.

Unlike other U.S. states, South Dakota has no state laws that govern the specifics of wage deductions, such as the type of permissible deductions an employer can make from an employee’s paycheck and whether an employee’s prior written consent is needed before such deductions are made. Hence, due to the absence of legal regulations in this regard, an employer is likely to withhold or deduct wages from an employee’s paycheck for:

• cash shortages
• breakage, damage, loss or stolen company property
• required uniforms and tools
• other items required for employment

However, the federal Fair Labor Standards Act prohibits employers from making wage deductions that would reduce an employee’s wage below the federal minimum pay of $7.25 per hour. Since South Dakota’s minimum wage is higher than the federal minimum requirement, employers must ensure that employees earn the state’s minimum hourly wage of $11.20 after deductions have been made.

• Minimum wage: According to state law, an hourly employee in South Dakota is rightly entitled to earn the state’s minimum wage of $11.20 per hour.
• Overtime: South Dakota’s hourly employees are legally entitled under federal law to be compensated for working overtime hours that surpass the regular 40-hour workweek at a fixed hourly pay rate of one and a half times their standard hourly wage.
• Workers’ compensation insurance: While state law  does not require employers to offer workers’ compensation insurance to their employees, it is highly encouraged for employers to provide their employees with such coverage. An uninsured employer may face a potential civil lawsuit filed by an injured employee in the absence of these insurance benefits. The South Dakota Workers’ Compensation insurance program, for employers who choose to obtain coverage, is a type of insurance that covers medical and disability costs for occupational-related injuries and diseases sustained by an employee.
• Reemployment assistance: South Dakota’s unemployed workers, who have lost their job without fault of their own, are entitled to receive reemployment assistance to partially offset lost wages while they search for other job opportunities or until an employer recalls them to work.
• Extended health insurance benefits: The state of South Dakota has its own adaptation of the Consolidated Omnibus Budget Reconciliation Act (COBRA), a federal enactment that legally entitles employees with the benefit of continuing their health insurance coverage for up to 18 months after separating from their employment.

• Genetic information protection: According to South Dakota’s statutory law, employees are protected from having their genetic information obtained by their employer and from it being used to discriminate against them. Furthermore, employers are prohibited from engaging in unlawful employment practice by distinguishing or discriminating against employees, or restricting any rights or benefits based on their genetic information.
• Employment disability protection: Under the legal provisions of South Dakota’s statutory laws, employees are protected from facing adverse personnel actions taken against them by their employers based on their physical or mental impairment. Furthermore, disabled employees must be reasonably accommodated by the good faith efforts of their employers, unless such accommodation would cause undue hardship.
• Child labor protection: With regards to child labor in the state of South Dakota, the state’s statutory laws primarily regulate the employment of minors and serves to protect their safety and well-being during the course of their employment by restricting their working hours and the type of work they are permitted to engage in based on their age and whether school is in session during the working week.
• Protection from discrimination: State laws in South Dakota mandates that employers cannot take adverse personnel actions against their employees for discriminatory reasons that relate to their protected characteristics, which include their: 
  • Race
  • Color
  • Religion
  • Sex
  • National origin
  • Age
  • Genetic information

In the employment aspect of termination, South Dakota is an at-will employment state. Essentially, that means that both the employer and employee possess the autonomy to terminate the contractual employment relationship at any time and without any cause. However, while this concept generally justifies an employee’s termination in most situations, particular exceptions may apply which restrict an employer’s broad discretionary ability in terminating an employee. These exceptions comprise of the following:

• Breach of employment contract: An employment contract may specify the specific reasons that justify an employee’s termination. When such contractual terms related to termination are in place, the employer is legally obligated to terminate the employee based on the grounds stipulated in the contract.
• Retaliation: South Dakota employees cannot have their employment terminated in retaliation by their employer just because they have exercised their protected legal rights, such as filing a claim for worker’s compensation or reporting any legal violations in the workplace to appropriate authorities, otherwise known as whistleblowing.
• Public policy: Employers are prohibited from terminating an employee based on reasons that would contravene public policies, such as terminating a work relationship due to an employee rejecting an employer’s request to engage in an unlawful activity or filing a worker’s compensation claims in which they are rightly entitled to pursue.
• Workplace discrimination: South Dakota employers are prohibited from engaging in discriminatory practice towards their employees by terminating their employment for reasons relating to their protected characteristics, which include their:  
  • Race
  • Color
  • Creed
  • Religion
  • Sex
  • Ancestry
  • Disability
  • National origin

In addition, South Dakota’s statutory laws require employers to issue a final paycheck to separated employees on the next regularly scheduled pay period after their last day of employment. This is applicable to employees who:

• Resigned
• Were suspended or resigned because of a labor dispute
• Were terminated

In the state of South Dakota, there are no employment laws that necessitate the provision of severance pay by an employer to a terminated employee unless such provision has been mutually agreed upon in the employment contract or collective bargaining agreement. Hence, employers must strictly comply with the contractual terms that govern the provision of severance pay if they have chosen to extend such payments.

Typically, the calculation of severance pay is contingent upon the employee’s tenure with the company. Furthermore, severance pay is generally distributed on a lump-sum basis, although it may also be paid in several instalments.