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Legislative Preview: Senate Bill 26 Addresses Funding Shortfall for Reemployment Assistance
Reemployment Assistance (RA) is a federal program designed to provide temporary financial assistance to workers who have lost their jobs through no fault of their own while seeking new employment. However, a significant funding shortfall from the U.S. Department of Labor has put the program's administration in jeopardy.
What SB 26 Does:
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SB 26 proposes a revenue-neutral solution to fix the funding shortfall without increasing the overall burden on employers.
- Reduce Employer Tax Rates:
- A $3 million reduction in employer contributions to the Unemployment Insurance Trust Fund will offset the increase in the administrative fee. This is in addition to the $18 million annual tax cut implemented in 2024.
- This reduction would be achieved by lowering all tax rates across all tax schedules, thereby reducing the amount employers contribute to the program overall.
- Increase Administrative Fee:
- The administrative fee would increase from .02% to .08% for employers.
- This adjustment will allow DLR to use an additional $3 million in employer contributions to administer the RA program.
- The maximum amount an employer would pay for the administrative fee would be capped at $12 per worker.
Failing to increase the administrative fee will force significant reductions in the RA Division. This shortfall will result in noncompliance with federal regulations, triggering the loss of South Dakota's FUTA tax reduction. As a consequence, South Dakota employers will face a federal tax increase of $183 million annually.
Not having an unemployment insurance program would be dire. Not only would employers be paying $183 million more annually, but a $216 million balance in the Unemployment Insurance Trust Fund could not be returned to South Dakota to use for other purposes.
The Reemployment Assistance Advisory Council unanimously supported this proposal.
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State Minimum Wage Increased Jan. 1
The state minimum wage for non-tipped employees increased from $11.20/hour to $11.50/hour effective Jan. 1, 2025.
The minimum wage is adjusted annually based on increases in the cost of living, as measured by the Consumer Price Index published by the U.S. Department of Labor. South Dakota implements this annual increase as established by SDCL 60-11-3.2, a law passed by the South Dakota Legislature that came into effect on Jan. 1, 2016.
The hourly minimum wage for tipped employees is $5.75/hour effective Jan. 1, 2025, half the minimum wage for non-tipped employees. Wages and tips combined must equal at least the minimum wage.
These increases apply to all South Dakota employers, with some limited exceptions. For more information, visit dlr.sd.gov/employment_laws/minimum_wage.aspx.
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Don’t Forget: Postings for Employers
South Dakota law requires only two workplace postings:
- Reemployment Assistance Employee Notification Posting Requirement
- Safety on the Job Posting Requirement
DLR offers a compliance poster which includes the six required federal posters at no charge. You may request the 6-in-1 poster through your Job Service office.
Various federal agencies (such as the U.S. Department of Labor, the Occupational Safety and Health Administration (OSHA), and the Equal Employment Opportunity Commission (EEOC) require workplace postings. View more information.
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QUICK LINKS
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South Dakota Department of Labor and Regulation
Employer Connection E-Newsletter
You have received this email because you have an account with the South Dakota Department of Labor and Regulation or have subscribed to the DLR Employer Newsletter ListServ
This correspondence is sent from an account we use to send messages only. Please refer to our Staff Directory page to contact the appropriate department or use this web form to contact us. Thank you.
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