In South Dakota and elsewhere, the most important or significant consideration in determining employee or contractor status is the fundamental question of control. State law defines an employee as "a person who is employed to render personal service to an employer otherwise than in the pursuit of an independent calling, and who in such service remains entirely under the control and direction of the employer" (SD Code Sec. 60-1-1).
Under South Dakota unemployment compensation law (SD Code Sec. 61-1-111), a worker is presumed to be an employee unless:
• The worker has been and will continue to be free from control or direction over the performance of the service, both under contract and in fact.
• The worker is customarily engaged in an independently established trade, occupation, profession, or business.
This definition, although used in an unemployment setting, is generally helpful in giving employers an idea of the broader definition of independent contractor.
The South Dakota Supreme Court has ruled that there are three principal elements for determining whether a worker is an independent contractor exempt from workers' compensation coverage. The Court ruled that, in the ...