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- At-Will Employment: South Dakota adheres to the at-will employment doctrine, allowing employers to terminate employees for any reason, provided it’s not illegal, such as discrimination, and without prior notice.
- Minimum Wage: As of January 1, 2025, the minimum wage is $11.50 per hour for non-tipped employees and $5.75 per hour for tipped employees. Total earnings must meet or exceed the non-tipped minimum wage.
- Child Labor Restrictions: Minors under 16 are restricted from hazardous occupations, working during school hours, and are limited to specific working hours per day and week.
South Dakota does not impose state income tax, so employers are not required to withhold state income tax from employee wages. Employers must comply with federal payroll tax requirements, including withholding federal income tax and FICA taxes (Social Security and Medicare). Additionally, they are responsible for federal unemployment taxes (FUTA). Employers must pay wages at least once per calendar month, unless otherwise specified by law or mutual agreement.
Access competitive benefits like health insurance and retirement plans, often at a lower cost through a PEO. Leverage its pooled volume for enterprise rates—resold to PEO customers, with no employment minimums in South Dakota.
- Workers’ Compensation: Employers must provide workers’ compensation insurance to cover employees for work-related injuries or illnesses.
- Unemployment Insurance: Employers are required to participate in the state’s reemployment assistance program and contribute to unemployment insurance for eligible employees.
- Health Benefits: While not mandated by state law, employers offering health insurance must comply with federal regulations, including the Affordable Care Act (ACA).
Check out our comprehensive state hiring guide.



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