South Dakota Wage Law Explained
The South Dakota Labor Laws address few issues relating to the relationship between employer and employee, such minimum wage and timing of pay, and essentially rely on federal laws for the rules regarding overtime pay and recordkeeping requirements.
Our overtime rights lawyers represent South Dakota employees who have been subjected to workplace wage and hour violations and take cases on a contingent fee basis – no fee if no recovery of backpay. If you believe you’ve been deprived of the compensation to which you’re legally entitled, please contact the Lore Law Firm.
Understanding South Dakota Wage and Overtime laws
While South Dakota does have certain state labor laws that differ from the federal Fair Labor Standards Act (FLSA), the state law applies only in instances where it provides greater rights or protections than federal law. Whichever law (state or federal) is more favorable to the worker will apply.
The South Dakota minimum wage as of 1/1/23 is $10.80 per hour (up from $9.95 in 2022; $9.45 in 2021; $9.30/hour in 2020) and the federal minimum wage is $7.25 per hour. The South Dakota minimum wage is subject to a cost-of-living adjustment based on the Consumer Price Index no later than October 15th of each year.
As of 1/1/22, the hourly minimum wage for tipped employees in South Dakota is $5.40 per hour (up from $4.98/hour in 2022; $4.73/hour in 2021; $4.65/hour in 2020). Employers of a tipped employees must pay them a cash wage of not less than fifty percent of the current minimum wage. The employer must make sure the employees receive no less than the current minimum wage once tips are included and must keep a record of all tips received by employees.
South Dakota has no state labor laws regarding the payment of overtime, so the federal overtime laws apply to covered workers in the state. As most employers are covered by the FLSA, generally the FLSA will apply and requires employers to pay time and a-half for all hours worked over 40 per workweek, unless an employee is properly classified as exempt.
For minimum wage workers in South Dakota, the overtime pay rate amounts to $13.95 per hour (1.5 x $9.30) as of 1/1/20.
Which Employees are Entitled to Overtime Pay
Most workers in South Dakota are entitled to overtime pay when they work more than 40 hours per week. In certain circumstances, however, there are exemptions.
Employees engaged in executive, administrative, or professional capacities (and paid at least $455 per week on a salary basis) are exempt from the overtime requirement. Note that new minimum salary requirements for these overtime exemptions take effect in January 2020 and increase the minimum salary threshold to $684 per week (or $35,568 annually). This change in federal law will also apply to most workers in South Dakota when making the determination of whether they are classified as exempt or non-exempt from the overtime pay laws.
Misclassification of Independent Contractors
Misclassification occurs when a business treats its workers as independent contractors (or subcontractors) rather than employees to avoid legal obligations such as social security taxes, worker’s compensation, unemployment insurance and overtime pay.
While there are situations in which workers are legitimately running their own business and properly treated as independent contractors who are not entitled to receive overtime, employers are not allowed to mischaracterize employee roles to avoid paying overtime compensation.
Merely labeling a worker as an independent contractor, or even entering into a written agreement, is not enough to avoid the labor laws on overtime pay.
There are several factors to be considered in determining if a worker in South Dakota is an employee or independent contractor (a/k/a 1099 employee)
If properly classified as an independent contractor under South Dakota law, workers are typically eligible for only the specific compensation bargained for in a contract.
An employer doesn’t violate overtime laws by requiring employees to work overtime, (ie “mandatory overtime”), as long as they are properly compensated at the premium rate required by law.
Most South Dakota employees must be paid wages at least once each calendar month unless otherwise provided by law, or on regular agreed pay days designated in advance by the employer, in lawful money of the United States. An employer may pay wages by check, cash, or direct deposit to the employee’s bank account, unless an employer and employee agree to another form of payment.
When an employee is terminated/separated, wages are due not later than the next regular stated pay day for which those hours would have normally been paid or as soon thereafter as the employee returns to the employer all property of the employer in the employee’s possession.
In case of a dispute over wages, the employer shall give written notice to the employee of the amount of wages less whatever the employee owes the employer which he concedes to be due and shall pay such amount without condition. Acceptance by the employee of any such payment shall not constitute a release as to the balance of the claim.
South Dakota labor laws do not require an employer provide pay stubs to employees at the time of payment of wages.
Meal and Rest Breaks
The South Dakota Wage and Hour Laws do not require that employers provide meal or rest periods to employees. This is a benefit that the employer may choose to provide. However, if a break is offered, the break time is considered as paid time. In the case of meal periods, they are not considered paid time if the meal period is half an hour or longer and the employee is completely relieved from duty.
The federal Fair Labor Standards Act does not require that an employer give employees any mandatory rest breaks or meal breaks.
Vacation or Holiday Leave
South Dakota doesn’t require employers to provide workers with paid or unpaid vacation leave.
Statute of Limitations
South Dakota’s deadline for filing an overtime claim adheres to the FLSA, which requires those seeking to recover unpaid back overtime wages file a lawsuit within two years from the date of the employer’s wage violation. So, a lawsuit filed today would be able to seek recovery of back overtime for only the prior 2 (sometimes 3) years.
As an example, suppose you believe that your employer has failed to pay you proper overtime wages since January 1, 2016. Waiting until June 1, 2019, to file your lawsuit means you are only allowed to seek unpaid wages from June 1, 2017, to June 1, 2019.
The statute of limitations may be extended to three years if an employer’s violation of the FLSA was willful. An FLSA violation is deemed willful if the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard.
Penalties for Violations
Under South Dakota law, where a private employer has been oppressive, fraudulent, or malicious, in its refusal to pay wages due to the employee, the worker is entitled to recover double the amount of wages for which the employer is liable.
Under federal law, employers who fail to pay proper overtime wages may be liable for up to double the amount of unpaid back wages plus costs and attorney’s fees incurred by employees. These cases can be brought by overtime pay lawyers on a class or collective basis on behalf of all workers who were subjected to the same illegal pay practices.
Layoffs, Plant Closings and WARN Notices
The Worker Adjustment and Retraining Notification Act (WARN) offers protection to South Dakota workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. This notice must be provided to either affected workers or their representatives (e.g., a labor union).
An employer who violates the WARN Act by failing to provide appropriate notice is liable to each employee for an amount up to 60 days back pay and benefits for the period of violation.
Lore Law Firm is On Your Side
At the Lore Law Firm, we represent salaried, hourly, and day-rate workers in an array of employment litigation matters, including unpaid overtime compensation claims in South Dakota. Our attorneys, and the South Dakota overtime law attorneys we associate with, are passionate about protecting the rights of workers and have helped recover millions of dollars in unpaid overtime wages for our clients. Contact us for a free and confidential review of your situation