South Dakota Minimum Wage 2026
⚠️Informational only — not legal or tax advice.
Last Updated: February 11, 2026
Last Reviewed: February 11, 2026
Applicable Period: 2026
Jurisdiction: State of South Dakota, United States
Update Schedule: Quarterly reviews in 2026; annual reviews thereafter
Table of Contents
- Introduction
- South Dakota Minimum Wage – 2026 Quick Reference
- Overview of Minimum Wage Law in South Dakota
- Current Minimum Wage Rates in South Dakota 2026
- Minimum Wage for Tipped Employees
- Local Minimum Wage Ordinances in South Dakota
- Who Is Covered and Who Is Exempt
- Employer Obligations and Enforcement
- South Dakota Minimum Wage vs Federal Law
- Minimum Wage Posting Requirements
- Frequently Asked Questions
- Information Verification Log
Introduction
The minimum wage in South Dakota establishes the lowest hourly compensation that employers must legally provide to covered employees. For 2026, South Dakota maintains a minimum wage of $11.85 per hour, with specific provisions for tipped employees who may be paid a cash wage of $5.925 per hour. The state adjusts its minimum wage annually based on changes in the Consumer Price Index.
Minimum wage regulations in South Dakota operate under South Dakota Codified Law § 60-11-3 alongside federal requirements established by the Fair Labor Standards Act (FLSA). When state minimum wage rates exceed the federal standard of $7.25 per hour, employers must comply with the higher state rate. South Dakota allows tip credits, and no local jurisdictions have enacted higher minimum wage ordinances than the state rate.
This page provides an authoritative overview of South Dakota minimum wage law for 2026, including current rates, scheduled increases, tipped employee provisions, coverage and exemptions, enforcement procedures, and compliance requirements. All information is compiled from official government sources.
| Category | Rate | Effective Date | Official Source |
|---|---|---|---|
| State minimum wage | $11.85/hour | January 1, 2026 | SDCL § 60-11-3 |
| Tipped minimum wage | $5.925/hour | January 1, 2026 | SDCL § 60-11-3.1 |
| Tip credit allowed | Yes (up to $5.925) | January 1, 2026 | SDCL § 60-11-3.1 |
| Next scheduled increase | TBD (announced by Oct 15, 2026) | January 1, 2027 | SDCL § 60-11-3.2 |
| Rate adjustment mechanism | CPI-indexed | Annual | SDCL § 60-11-3.2 |
| Federal minimum wage | $7.25/hour | July 24, 2009 | U.S. DOL FLSA |
| Local minimum wages | No | — | State law |
Last verified: February 11, 2026 via South Dakota Department of Labor and Regulation
Overview of Minimum Wage Law in South Dakota
Legal Authority
South Dakota minimum wage requirements are established under South Dakota Codified Law § 60-11-3. The South Dakota Department of Labor and Regulation administers and enforces minimum wage regulations in South Dakota. The state minimum wage law was significantly modified in 2014 when voters approved Initiated Measure 18, which established automatic annual adjustments based on the Consumer Price Index.
Relationship to Federal Law
Under the Fair Labor Standards Act (FLSA), the federal minimum wage establishes a floor of $7.25 per hour for covered employers and employees. South Dakota law operates independently with its own minimum wage standards. When both state and federal minimum wage laws apply, employers must pay whichever rate is higher.
Because South Dakota’s minimum wage of $11.85 exceeds the federal minimum, most covered employers must comply with the state rate. Employers not subject to state minimum wage requirements but covered by the FLSA must comply with federal standards.
Coverage Scope
South Dakota minimum wage law applies to all employers with limited exemptions. The law covers all employees working in South Dakota regardless of employer size, unlike some states that exempt small businesses. Specific industries and employee types are exempt under state law, including seasonal amusement or recreational establishment employees, babysitters, and outside salespersons.
Higher Rate Principle
The principle of “higher prevailing rate” requires employers to pay the highest applicable minimum wage—whether federal or state. In South Dakota, this means employers must identify and apply whichever minimum wage rate provides employees the highest hourly compensation. Since South Dakota has no local minimum wage ordinances, employers compare only the state rate of $11.85 to the federal rate of $7.25.
Current Minimum Wage Rates in South Dakota 2026
Standard Hourly Minimum Wage
As of January 1, 2026, the standard minimum wage in South Dakota is $11.85 per hour for covered employees. This rate applies to all non-exempt employees working in South Dakota regardless of employer size or annual revenue. The state does not establish different minimum wage rates based on employer size or the number of employees.
South Dakota adjusts its minimum wage annually based on the Consumer Price Index for All Urban Consumers (CPI-U) as published by the U.S. Department of Labor. The 3.04% increase from 2025’s rate of $11.50 reflects the inflation adjustment calculated from the CPI. Under SDCL § 60-11-3.2, the South Dakota Department of Labor and Regulation publishes the adjusted minimum wage rate by October 15 of each year, with the new rate becoming effective on January 1 of the following year.
Youth and Training Wages
South Dakota permits reduced wage rates for certain categories of workers during initial employment periods:
Opportunity Wage (Training Wage)
- Rate: $4.25 per hour
- Eligibility: Newly hired employees under age 20
- Duration: First 90 consecutive calendar days of employment
- Authority: Federal Fair Labor Standards Act
The opportunity wage allows employers to pay newly hired employees under the age of 20 a rate of $4.25 per hour during their first 90 consecutive calendar days of employment. This provision follows federal FLSA guidelines. Employers may not displace existing employees for the purpose of hiring individuals at the opportunity wage. After the 90-day period expires, employers must pay the full standard minimum wage of $11.85 per hour.
Learners and Apprentices
Under SDCL § 60-11-5, the minimum wage requirements do not apply to any apprentice or person learning the business or work in which employed, provided the South Dakota Department of Labor and Regulation issues a permit for that person’s employment fixing the wage or compensation.
Workers with Disabilities
The minimum wage requirement also does not apply to persons with developmental disabilities if the South Dakota Department of Labor and Regulation issues a permit for the person’s employment that fixes wage or compensation for that person.
Scheduled Increases
South Dakota adjusts the minimum wage annually based on the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) for the 12-month period ending each August. The South Dakota Department of Labor and Regulation calculates and announces the adjusted rate each October for the following calendar year.
The 2027 minimum wage rate will be announced no later than October 15, 2026. Future increases will continue to be tied to the CPI, with the amount of any minimum wage increase rounded up to the nearest five cents. This automatic adjustment mechanism ensures that South Dakota’s minimum wage keeps pace with inflation without requiring new legislation.
No specific minimum wage rate is scheduled beyond 2026 until the annual CPI calculation and announcement in October 2026. However, the CPI-based system ensures gradual increases in line with inflation, meaning the minimum wage is likely to rise again in 2027.
Minimum Wage for Tipped Employees
Tipped Employee Cash Wage
South Dakota permits employers to pay tipped employees a reduced cash wage, provided that employee tips combined with the cash wage equal at least the full minimum wage.
Cash wage requirement: $5.925 per hour
Maximum tip credit: $5.925 per hour
Total minimum compensation: $11.85 per hour (cash wage + tips)
Under SDCL § 60-11-3.1, employers of tipped employees must pay a cash wage of not less than fifty percent of the state minimum wage if the employer claims a tip credit against the employer’s minimum wage obligation. For 2026, this means tipped employees must receive a cash wage of at least $5.925 per hour.
Who Qualifies as a Tipped Employee
Under South Dakota law, a “tipped employee” is defined as an employee engaged in an occupation in which the employee customarily and regularly receives more than $35 per month in tips or other considerations. Qualifying occupations typically include:
- Restaurant servers and bartenders
- Hotel service workers and bellhops
- Casino service workers
- Parking attendants and valets
- Delivery drivers who receive tips
- Hairstylists and barbers who receive tips
Employer Obligations for Tipped Workers
Employers who claim a tip credit must:
- Pay the minimum cash wage of $5.925 per hour to tipped employees
- Ensure total compensation (cash wage plus tips) equals or exceeds $11.85 per hour for all hours worked
- Pay the difference if an employee’s tips combined with the cash wage do not equal the minimum hourly wage
- Make up shortfalls as additional wages for each regular pay period of the employer
- Maintain accurate records of employee tips and hours worked
If an employee’s tips combined with the employer’s cash wage of $5.925 per hour do not equal the minimum wage of $11.85 per hour, the employer must make up the difference as additional wages for each regular pay period. This ensures that tipped employees always receive at least the full minimum wage for all hours worked.
Tip Ownership and Pooling
Tips received by employees are the property of the employee under South Dakota law. Employers cannot retain any portion of employee tips or require employees to share tips with management.
Tip Pooling: South Dakota law does not specifically address tip pooling arrangements. However, customary and voluntary tip pooling among employees who customarily and regularly receive tips is generally permitted. Managers and supervisors who do not customarily and regularly receive tips should not participate in tip pools.
Mandatory Service Charges: Mandatory service charges added to customer bills are not considered tips under South Dakota law. Employers may retain service charges or distribute them according to their policies, as these charges are considered part of the employer’s revenue rather than gratuities belonging to employees.
Local Minimum Wage Ordinances in South Dakota
South Dakota maintains a uniform statewide minimum wage with no local variations. No cities or counties in South Dakota have enacted their own minimum wage rates that differ from the state minimum wage of $11.85 per hour. All employers in South Dakota must comply with the uniform statewide rate regardless of their location within the state.
While South Dakota law does not explicitly prohibit local minimum wage ordinances, no municipalities have exercised authority to establish rates exceeding the state minimum wage. This creates consistency for employers operating in multiple jurisdictions within South Dakota, as they need only comply with the single statewide rate.
Benefits of Uniform Statewide Rate
The uniform minimum wage across South Dakota provides several advantages:
Administrative Simplicity: Employers with multiple locations throughout South Dakota face no complexity in tracking different local rates or adjusting payroll systems based on work location.
Compliance Certainty: Businesses can ensure compliance by applying the single statewide rate of $11.85 per hour to all non-exempt employees, regardless of whether they work in Sioux Falls, Rapid City, Aberdeen, or any smaller community.
Competitive Neutrality: The uniform rate ensures that businesses in different parts of the state compete on an equal footing regarding minimum wage obligations, with no competitive advantage based solely on geographic location.
Who Is Covered and Who Is Exempt
Employees Covered by South Dakota Minimum Wage
South Dakota minimum wage law covers most employees working in the state. Unless specifically exempted, covered employees include:
- Private sector workers: Full-time and part-time employees of private businesses regardless of employer size
- Salaried non-exempt employees: Employees paid on a salary basis who do not qualify for overtime exemption
- Hourly employees: Workers compensated on an hourly basis for all hours worked
- Temporary and seasonal workers: Most temporary and seasonal employees are covered, with limited exceptions
- Minor employees: Workers under age 18 are generally covered at the full minimum wage, except during an initial training period for workers under age 20
Exemptions from Minimum Wage Requirements
The following categories of employees are exempt from South Dakota minimum wage requirements:
Seasonal Amusement or Recreational Establishment Employees
Employees of seasonal amusement or recreational establishments are exempt from minimum wage requirements. Under SDCL § 60-11-3, this exemption applies to establishments that:
- Operate for not more than seven months in any calendar year, or
- During the preceding calendar year, had average receipts for any six months that were not more than 33⅓ percent of its average receipts for the other six months
Babysitters
Casual babysitters are exempt from South Dakota minimum wage requirements under state law.
Outside Salespersons
Outside salespersons are exempt from minimum wage requirements. These are employees whose primary duty is making sales away from the employer’s place of business and who are customarily and regularly engaged away from the employer’s business location.
Apprentices and Learners
Under SDCL § 60-11-5, minimum wage requirements do not apply to apprentices or persons learning the business or work in which employed, provided the South Dakota Department of Labor and Regulation issues a permit for that person’s employment fixing the wage or compensation.
Workers with Disabilities
Minimum wage requirements do not apply to persons with developmental disabilities if the South Dakota Department of Labor and Regulation issues a permit for the person’s employment that fixes wage or compensation for that person.
Opportunity Wage for Young Workers
Newly hired employees under age 20 may be paid the federal opportunity wage of $4.25 per hour during their first 90 consecutive calendar days of employment. After this initial period, employers must pay the full minimum wage.
Federal Exemptions
South Dakota minimum wage law also incorporates federal exemptions under the Fair Labor Standards Act. Common federal exemptions include:
Executive, Administrative, and Professional Employees
Employees performing bona fide executive, administrative, or professional duties may be exempt if they meet both salary and duties tests. The federal salary threshold for exempt status is $684 per week ($35,568 annually) as of 2026.
Independent Contractors
Properly classified independent contractors are not employees and therefore not covered by minimum wage requirements. However, South Dakota applies tests to determine independent contractor status, and misclassification may result in penalties and back wages. The determination of independent contractor status considers factors including the degree of control exercised by the employer and the worker’s opportunity for profit or loss.
Coverage for Part-Time and Temporary Workers
Part-time employees are entitled to the same minimum wage as full-time employees. South Dakota law does not permit reduced rates based on part-time status. All covered employees must receive at least $11.85 per hour regardless of the number of hours worked per week.
Similarly, temporary workers are generally covered by minimum wage requirements unless they fall within a specific exemption category such as seasonal amusement establishment employees.
Employer Obligations and Enforcement
Employer Compliance Obligations
Employers subject to South Dakota minimum wage law must:
- Pay the applicable minimum wage of $11.85 per hour for all hours worked by non-exempt employees
- Maintain accurate payroll records documenting hours worked and wages paid for at least three years
- Display required posters informing employees of minimum wage rates and employee rights
- Issue compliant wage statements showing gross wages, deductions, and net pay
- Pay wages on agreed-upon pay days at least once each calendar month
- Make up tip credit shortfalls when tipped employees’ tips plus cash wage do not equal minimum wage
Recordkeeping Requirements: Employers must maintain payroll records for a reasonable period of time as stipulated by South Dakota labor and employment laws. Records should include:
- Employee names, addresses, and Social Security numbers
- Hours worked each workday and workweek
- Wage rates and total wages paid each pay period
- Deductions from wages and net wages paid
- Dates of payment and pay periods covered
Enforcement Agency and Process
The South Dakota Department of Labor and Regulation, Division of Labor and Management enforces minimum wage requirements in South Dakota. The agency:
- Investigates wage complaints filed by employees
- Inspects records to ensure compliance with wage laws
- Cooperates with employees in enforcing valid wage claims
- Issues citations for violations
- May recover unpaid wages on behalf of employees
Filing a Complaint: Employees who believe they have not been paid proper minimum wage may file a complaint with the South Dakota Department of Labor and Regulation. Contact information:
- Phone: 605-773-3101
- Mail: Division of Labor and Management, 123 W. Missouri Ave., Pierre, SD 57501
- In-person: Regional offices throughout South Dakota
Employees may also contact the U.S. Department of Labor Wage and Hour Division for complaints involving federal minimum wage violations. South Dakota law prohibits retaliation against employees who file wage complaints or cooperate with investigations.
Penalties and Remedies
Employers who violate South Dakota minimum wage law may be subject to:
Back Wages: Under SDCL § 60-11-4, employees employed at less than the minimum wage are entitled to recover the full amount measured by the minimum wage and costs, notwithstanding any agreement to work for less. Back wages typically cover unpaid amounts for up to three years from the date of complaint.
Double Damages: Under SDCL § 60-11-7, if an employer’s refusal to pay wages due to an employee is found to be oppressive, fraudulent, or malicious, the measure of damages is double the amount of wages for which the employer is liable.
Criminal Penalties: Violations of minimum wage requirements under SDCL § 60-11-3 constitute a Class 2 misdemeanor, punishable by fines and potential imprisonment.
Additional Remedies: The South Dakota Department of Labor and Regulation may hold hearings to satisfy itself as to the justice of any claim and cooperate with employees in enforcement of valid claims against employers.
South Dakota Minimum Wage vs Federal Law
The Federal Minimum Wage Floor
The Fair Labor Standards Act (FLSA) establishes a federal minimum wage of $7.25 per hour, which has remained unchanged since July 24, 2009. This federal rate sets a floor for minimum wage requirements nationwide and applies to employers engaged in interstate commerce or with annual gross sales exceeding $500,000.
When State Law Applies
Because South Dakota’s minimum wage of $11.85 exceeds the federal minimum, most employees working in South Dakota are entitled to the higher state rate. The federal minimum serves as a fallback only for the limited category of employers covered by federal but not state law.
For employers covered by both state and federal law, the state minimum wage requirement of $11.85 per hour controls. Employees working in South Dakota must be paid at least the state rate regardless of whether they work for small employers or employers not engaged in interstate commerce.
Higher Applicable Rate Rule
The fundamental principle governing minimum wage compliance is that employers must pay whichever rate—federal or state—provides employees the highest hourly wage. This rule ensures workers receive maximum protection under applicable law.
Practical Application:
- Identify whether the employer is covered by federal law (FLSA) and/or state law
- Determine which minimum wage rates apply to the specific employee
- Pay the highest applicable rate
In South Dakota, the comparison is straightforward: the state minimum of $11.85 exceeds the federal minimum of $7.25, so the state rate applies for all covered employees. There are no local minimum wages to consider, simplifying compliance.
Minimum Wage Posting Requirements
South Dakota law requires employers to display official workplace postings informing employees of their rights under state and federal law. While South Dakota requires only two state workplace postings (reemployment assistance and workers’ compensation safety), employers should ensure minimum wage information is readily accessible to employees.
Minimum Wage Poster Availability:
- Download from South Dakota Department of Labor and Regulation
- The 2026 minimum wage poster will be available at the posting requirements page
- Available in English (Spanish translations available for federal posters)
Required Federal Postings:
Employers must also display the federal Employee Rights Under the Fair Labor Standards Act poster, which includes federal minimum wage information. This poster is available from the U.S. Department of Labor.
Posting Locations: Notices must be posted in conspicuous locations accessible to all employees, typically:
- Near time clocks or where employees clock in/out
- In break rooms or employee common areas
- At entrances to workplaces
- Where employees can readily see them during the workday
Compliance: Failure to display required posters may result in citations from the South Dakota Department of Labor and Regulation or federal enforcement agencies. Employers must update posters when minimum wage rates change annually.
Frequently Asked Questions: Minimum Wage in South Dakota 2026
What is the minimum wage in South Dakota in 2026?
The minimum wage in South Dakota is $11.85 per hour as of January 1, 2026. This rate applies to all covered non-exempt employees working in South Dakota. Tipped employees must receive a cash wage of at least $5.925 per hour, with tips bringing total compensation to at least $11.85 per hour.
When is the next minimum wage increase in South Dakota?
The next minimum wage increase in South Dakota will take effect January 1, 2027. The South Dakota Department of Labor and Regulation will announce the 2027 rate no later than October 15, 2026. Future increases are adjusted annually based on the Consumer Price Index for All Urban Consumers.
Does South Dakota allow tip credit?
Yes, South Dakota permits employers to pay tipped employees a cash wage of $5.925 per hour, with up to $5.925 in tip credit, provided total compensation reaches $11.85 per hour. If tips combined with the cash wage do not equal the minimum wage, employers must make up the difference.
Are there different minimum wages in different cities in South Dakota?
No, South Dakota maintains a uniform statewide minimum wage of $11.85 per hour. No cities or counties in South Dakota have enacted minimum wages higher than the state rate. All employers must pay the same rate regardless of their location within the state.
Who is exempt from minimum wage in South Dakota?
Common exemptions from South Dakota minimum wage include seasonal amusement or recreational establishment employees, babysitters, outside salespersons, apprentices and learners (with Department of Labor permit), and workers with disabilities (with Department of Labor permit). Executive, administrative, and professional employees meeting federal salary and duties tests may also be exempt.
What happens if an employer pays below minimum wage in South Dakota?
Employers who pay below minimum wage face back wage liability for the full amount of unpaid wages, potential double damages if the violation is found to be oppressive, fraudulent, or malicious, and criminal penalties as a Class 2 misdemeanor. Employees can file complaints with the South Dakota Department of Labor and Regulation to recover unpaid wages.
Do small businesses have to pay minimum wage in South Dakota?
Yes, all employers in South Dakota must pay minimum wage regardless of size. Even businesses with one employee must comply with the $11.85 hourly rate. South Dakota does not exempt small businesses based on number of employees or annual revenue.
Is South Dakota’s minimum wage higher than the federal minimum?
Yes, South Dakota’s minimum wage of $11.85 is $4.60 higher than the federal minimum wage of $7.25. Employers in South Dakota must pay the higher state rate.
How often does South Dakota increase its minimum wage?
South Dakota adjusts its minimum wage annually on January 1 based on the percentage change in the Consumer Price Index for All Urban Consumers. The South Dakota Department of Labor and Regulation announces the new rate each October for the following year. This automatic adjustment has been in effect since 2015 following passage of Initiated Measure 18.
Can employers pay less than minimum wage during training?
South Dakota permits employers to pay newly hired employees under age 20 a training wage of $4.25 per hour during the first 90 consecutive calendar days of employment. This federal opportunity wage provision allows reduced compensation during initial training. After 90 days, employers must pay the full minimum wage of $11.85 per hour.
How to file a minimum wage complaint in South Dakota
Employees who believe they have not received proper minimum wage compensation may file a wage complaint with the South Dakota Department of Labor and Regulation, Division of Labor and Management. Filing methods include:
- Phone: 605-773-3101
- Mail: Division of Labor and Management, 123 W. Missouri Ave., Pierre, SD 57501
- In-person: Visit regional offices in Pierre, Aberdeen, Sioux Falls, or Rapid City
The Department of Labor and Regulation will investigate the complaint and may recover unpaid wages on behalf of the employee. South Dakota law prohibits employer retaliation against workers who file wage complaints or participate in investigations.
Do remote workers in South Dakota get the South Dakota minimum wage?
Generally, the minimum wage of the jurisdiction where the employee physically performs work applies. Remote workers located in South Dakota are entitled to South Dakota’s minimum wage of $11.85, even if their employer is based in another state. Employers should pay the minimum wage rate applicable to the employee’s work location.
Information Verification Log
All information on this page has been compiled from official government sources and verified for accuracy as of the dates below.
| Source | Last Verified | Full URL |
|---|---|---|
| South Dakota Codified Law § 60-11-3 | February 11, 2026 | https://sdlegislature.gov/Statutes/60-11-3 |
| South Dakota Codified Law § 60-11-3.1 | February 11, 2026 | https://sdlegislature.gov/Statutes/60-11-3.1 |
| South Dakota Codified Law § 60-11-3.2 | February 11, 2026 | https://sdlegislature.gov/Statutes/60-11-3.2 |
| SD Department of Labor and Regulation | February 11, 2026 | https://dlr.sd.gov/employment_laws/minimum_wage.aspx |
| SD Labor and Employment Laws (PDF) | February 11, 2026 | https://dlr.sd.gov/employment_laws/publications/sd_labor_and_employment_laws.pdf |
| U.S. Department of Labor – FLSA | February 11, 2026 | https://www.dol.gov/agencies/whd/flsa |