Overview of Hiring Laws in South Dakota

South Dakota employment laws closely align with federal requirements, making compliance relatively straightforward for employers. The state’s Department of Labor and Regulation (DLR) oversees most employment standards, including wage and hour rules, new hire reporting, and workplace safety.

One of the most notable aspects of South Dakota employment law is its minimal deviation from federal standards, particularly regarding meal and rest period regulations.

These rules underscore South Dakota’s business-friendly approach while maintaining basic protections for workers through federal standards.

South Dakota Hiring Laws

Anti-Discrimination and Equal Opportunity Laws

South Dakota’s Fair Employment and Housing Act prohibits discrimination in hiring, promotion, and other employment practices based on protected characteristics such as:

• Race or color
• Creed or religion
• Sex (including pregnancy)
• Ancestry or national origin
• Disability

Employers are also required to provide reasonable accommodations for individuals with disabilities unless it causes undue hardship.

Key difference: Unlike Title VII of the Civil Rights Act (which applies to employers with 15+ employees), South Dakota’s protections extend to any business with one or more employees. This broader coverage ensures even the smallest businesses must comply with anti-discrimination requirements.

Pay Equity and Minimum Wage

South Dakota’s minimum wage is $11.50 per hour as of January 1, 2025. The rate adjusts annually for inflation based on the Consumer Price Index.

Unlike some states, South Dakota does not have additional pay equity laws beyond federal equal pay requirements. Employers must comply with the federal Equal Pay Act, which prohibits wage discrimination based on sex for substantially equal work.

Background Checks and Criminal History Rules

South Dakota does not have a “ban the box” law. Employers may ask about an applicant’s criminal history at any point during the hiring process.

If you use a third-party background screening service, the Fair Credit Reporting Act (FCRA) applies. Employers must:

• Obtain written consent before running a background check
• Provide pre-adverse and adverse action notices if denying employment
• Follow the seven-year lookback limit for non-convictions (for jobs paying under $75,000/year)

Certain industries—like education, healthcare, and childcare—require fingerprint-based background checks through the Division of Criminal Investigation (DCI). This requirement exists because these roles involve vulnerable populations, and federal and state regulations mandate enhanced screening to ensure public safety.

I-9 and Employment Eligibility Requirements

Like all U.S. states, South Dakota employers are required to verify the identity and employment eligibility of new hires using Form I-9.

Employers must:

• Complete Form I-9 by the employee’s first workday
• Store completed I-9 forms securely and make them available for inspection by authorized government officials when requested
• Retain forms for three years after hire or one year after termination, whichever is later
• Accept only valid, unexpired documents from Lists A, B, or C

South Dakota does not impose additional state-level employment eligibility requirements beyond federal law.

State-Specific Hiring Rules

South Dakota enforces additional hiring-related requirements that employers should be aware of:

Penalties for Non-Compliance in South Dakota

South Dakota takes non-compliance seriously. Employers who fail to follow state and federal hiring laws can face significant financial and legal consequences.

• Fines and Penalties: Employers may be required to pay back wages, interest, and civil penalties up to $10,000 for violations, such as wage and hour violations or failing to report new hires.
  
• Employee Lawsuits: Employees can file complaints with the South Dakota Commission on Human Rights or pursue civil lawsuits for discrimination or retaliation. Damages may include back pay, emotional distress compensation, and attorney fees.
  
• FCRA Violations: Improper background check procedures can result in fines of $1,000+ per applicant, with significantly higher exposure in class-action lawsuits.
  
• Form I-9 Violations: USCIS fines can range from $281 to $2,789 per form for paperwork errors, and $678 to $27,894 per violation for knowingly hiring unauthorized workers (as of 2025).

Example: A regional healthcare provider in Sioux Falls was fined $45,000 in 2024 for failing to complete required background checks for employees working with vulnerable patients. The Division of Criminal Investigation discovered the violations during a routine compliance audit, emphasizing the importance of following industry-specific hiring requirements.

Notice and Documentation HRs Need to Know

HR professionals must maintain the following key documents to stay compliant:

• Completed Form I-9s for All New Hires- Federal law requires all employers to verify an employee’s identity and eligibility to work in the U.S. via Form I-9. These forms must be completed within three business days of hire and stored securely for the required retention period: either three years after the hire date or one year after termination, whichever is later.
• New Hire Reporting to the DLR- All new hires and rehires must be reported to the South Dakota New Hire Reporting Center within 20 calendar days of their start date. Reports should include the employee’s name, address, Social Security number, and the employer’s FEIN. This supports child support enforcement and helps detect unemployment insurance fraud.
• Background Check Documentation- Employers must retain written consent forms, background check reports, and copies of any adverse action notices provided to applicants. These records should be kept for at least one year and demonstrate compliance with FCRA requirements.
• Written Policies on Non-Discrimination and Equal Opportunity- Employers are required to display clear, written policies outlining their commitment to equal employment opportunity and non-discrimination. These policies should be included in employee handbooks and posted in visible areas of the workplace to ensure accessibility for all staff, as required by the South Dakota Human Rights Act.
• Retention of Job Applications and Interview Notes- While not always mandatory under federal law, South Dakota employers are advised to retain job applications, interview notes, and hiring records for a minimum of two years. This documentation can be critical if hiring decisions are later questioned or challenged in discrimination complaints.
• Wage and Hour Records- Employers must maintain accurate records of hours worked, wages paid, and deductions for each employee. The South Dakota Department of Labor and Regulation requires these records to be kept for at least three years and made available during audits or investigations.
• Posters and Workplace Notices- Certain notices, such as those covering minimum wage, discrimination, workers’ compensation, and unemployment insurance, must be displayed prominently in the workplace. HR should routinely verify that all state and federal posters are up-to-date and clearly visible to employees. Posters are available through the DLR poster portal.