South Dakota Unemployment Compensation laws & HR compliance analysis

South Dakota Unemployment Compensation: What you need to know

Virtually all employers are covered by South Dakota’s unemployment compensation law (SD Cod. Laws Sec. 61-1-1 et seq.) and are, therefore, subject to the state unemployment insurance tax. For example, covered employers include:
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• Employers that employed at least one person for some portion of a day in each of 20 different weeks in the current or preceding calendar year or paid $1,500 in wages in any quarter;
• Anyone who acquired a business of a covered employer;
• Certain agricultural employers;
• Certain employers of domestic service employees;
• The state of South Dakota and its political subdivisions;
• Nonprofit organizations with 501(c)(3) status having four or more employees in each of 20 different weeks in the current or preceding calendar year;
• Employers subject to the Federal Unemployment Tax Act (FUTA); and
• Certain employers that elect to be covered (SD Cod. Laws Sec. 61-1-4et seq.).
The law excludes certain services from coverage, including, for example, services provided by:
• Students working for schools, colleges, or universities;
• Students working for work­study programs;
• Spouses of students working for schools;
• Real estate salespersons;
• Student nurses;
• Hospital interns; and
• Newspaper distributors who are minors (SD Cod. Laws Sec. 61-1-37 et seq.).
Taxable wage base. For the current taxable wage base, visit http://dlr.sd.gov/ui/uitaxfaqs.aspx. Wages include:
• Commissions and bonuses;
• The cash value of noncash remuneration; and
• Reported tips (SD Cod. Laws Sec. 61-1-1).
Rates. To find the current tax rate, visit http://dlr.sd.gov/ui/uitaxfaqs.aspx. New employers pay a certain set percentage.
Special surcharge. South Dakota has an unemployment insurance ...

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