Does South Dakota require workers’ compensation insurance?
No. South Dakota has no law requiring private employers to carry workers' compensation, the Department of Labor and Regulation says. An employer that does not insure is treated as having elected out of the Act (SDCL 62-5-7), and an injured employee can then sue it for damages or claim medical costs plus twice the usual benefits (SDCL 62-3-11). That exposure is why most South Dakota employers with staff still buy a policy.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
Does South Dakota require workers' comp for my employees?
South Dakota sets no employee count that triggers a requirement, because the Department of Labor and Regulation states that no law requires any employer to carry workers' compensation. The Act reaches any business using the service of another for pay (SDCL 62-1-2), but under SDCL 62-3-5 a private employer is bound by it only once it has insured or qualified to self-insure.
One narrow carve-in: a business that runs threshing machines, combines, corn shellers, or similar farm machinery for hire must secure coverage before operating, and its contracts are void without it (SDCL 62-3-16). Domestic workers under 20 hours a week or six weeks in any 13, farm and agricultural laborers, and workfare participants are outside the Act unless the employer chooses to insure them (SDCL 62-3-15 and 62-3-17).
Source: South Dakota Department of Labor and Regulation, Workers' Compensation, checked .
Which owners, officers, and family members are exempt in South Dakota?
Because nothing compels coverage, "exempt" in South Dakota means outside the Act even when the business is insured. A sole proprietor or partner is the employer, not an employee, and is covered only by buying a policy that includes themselves (SDCL 58-20-3). Every executive officer of a for-profit corporation is an employee (SDCL 62-1-7), but an officer can reject the Act by serving written notice on the corporation when elected or appointed, or more than 30 days before an injury, and can withdraw the rejection the same way (SDCL 62-3-5.1).
Officers of charitable, religious, educational, and other nonprofit corporations are not employees unless the corporation names them on its policy (SDCL 62-1-8). A worker whose job is not in the usual course of the employer's business is not an employee (SDCL 62-1-3). Title 62 has no separate family-member exemption and does not name LLC members; ask the carrier how it treats members before assuming either way.
Source: SDCL 62-3-5.1, checked .
What happens to a South Dakota employer that skips workers' comp?
Title 62 does not fine or criminally charge an employer for going uninsured; the exposure is civil. An employer without coverage is deemed to have elected not to operate under the Act (SDCL 62-5-7). The injured employee, or the family after a death, then chooses between a lawsuit for damages and a claim in circuit court under the Act for medical expenses plus twice the other compensation the Act allows. They cannot recover from both (SDCL 62-3-11).
Title 62 does not spell out which defenses an uninsured employer keeps in that lawsuit, so treat that as a question for a South Dakota attorney. The risk also runs uphill: a principal contractor is liable for compensation to a subcontractor's injured employee on its job site (SDCL 62-3-10), which is why general contractors ask subcontractors for a certificate.
Source: SDCL 62-3-11, checked .
Who enforces workers' comp in South Dakota?
The Department of Labor and Regulation carries out and enforces Title 62 (SDCL 62-2-5) through its Division of Labor and Management in Pierre. The Division takes first reports of injury, hears disputed claims, approves self-insurers, certifies owner-operator truckers as independent contractors, and runs the online coverage verification service.
Source: SDCL 62-2-5, checked .
Where do South Dakota employers buy coverage?
South Dakota has no state fund. An employer that insures buys from a stock company, a mutual, or a reciprocal exchange authorized to write workers' compensation in the state (SDCL 62-5-2), or qualifies with the Department to self-insure (SDCL 62-5-5). An employer the carriers will not write in the ordinary way goes to the assigned-risk plan every workers' comp insurer in the state must join under SDCL 58-20-15.
Source: SDCL 62-5-2, checked .
Who sets the class codes and rates in South Dakota?
South Dakota is an NCCI state. NCCI files South Dakota's advisory loss costs and publishes a yearly South Dakota State Advisory Report on that filing, and each carrier files its own loss cost multiplier with the Department's Division of Insurance. Class codes and experience mods follow NCCI's rules.
Source: NCCI, State Advisory Resources: South Dakota, checked .
Is there an exemption or waiver form in South Dakota?
There is no owner waiver to file, because there is nothing to waive. Two filings exist for the questions hiring businesses ask. An independent contractor who has no employees, is not a general contractor, and carries no policy can sign a notarized Affidavit of Exempt Status on the Division of Insurance's form (SDCL 62-1-19 and 62-1-20); it creates a rebuttable presumption that the contractor is not the hiring business's employee. An owner-operator trucker can apply to the Department for a certificate of independent contractor status (SDCL 62-1-10 to 62-1-12).
A hiring contractor does not have to accept the affidavit in place of a certificate of insurance (SDCL 62-1-22). A corporate officer's rejection of the Act is a notice served on the corporation, not a filing with the state.
Source: SDCL 62-1-19, checked .
Sorting out South Dakota workers' comp for your business
Tell Redoubt what the business does, who works in it, and what the South Dakota requirement in front of you says. We will say whether a policy, a waiver, or an exclusion fits.
This is general insurance information, not legal advice or a coverage determination. Statutes, agency instructions, policy forms, and the facts of the business control.
Workers’ comp requirements in every state
Each state page gives the employee threshold, the owner and officer exemptions, the penalty for going without, the rating bureau, the market, the enforcing agency, and the exemption filing, each with its statute or agency source.
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The hub, and the South Dakota pages that go deeper
South Dakota workers’ comp FAQ
Is workers' comp mandatory in South Dakota?+
Not for most private employers. The only statutory carve-in is a business running threshing or similar farm machinery for hire (SDCL 62-3-16). Everyone else chooses, and an uninsured employer faces a lawsuit or a double-benefit claim from an injured employee.
Why buy workers' comp in South Dakota if it is not required?+
An insured employer's liability for a work injury is limited to the benefits in the Act, and the employee gives up the right to sue (SDCL 62-5-1 and 62-3-2). Without a policy, that limit is gone. General contractors, who answer for a subcontractor's injured employees on their site, often ask for a certificate before work starts.
Do I need workers' comp in South Dakota if I have no employees?+
No. A sole proprietor or partner is not an employee of their own business. If a general contractor asks for proof, the options are a policy that covers you (SDCL 58-20-3) or the Affidavit of Exempt Status, which the contractor is free to refuse (SDCL 62-1-22).