South Dakota Workers’ Compensation Laws

South Dakota enjoys strong labor participation from its citizenry, with 68.9% of locals aged 16 and older working or seeking employment. This number is slightly higher than the nationwide rate of 61.7%. South Dakota’s job market is also relatively stable, primarily due to its agriculture-based workforce, which can withstand recessions and economic slowdowns.

In 2021, the private sector of agriculture, fishing, forestry, and hunting had the highest records in terms of fatal workplace injuries, according to the U.S. Bureau of Labor Statistics. Most of the victims were agricultural managers, farmers, and ranchers, as well as roving salespeople and truckers. However, workers from the industry only accounted for around 5% of the total workforce in South Dakota. This illustrates how agricultural jobs are some of the most prone to hazards.

But no matter the industry an employee works in, it is important to have an idea regarding the amount of compensation recoverable in case of injury or illness due to work. This knowledge certainly helped the plaintiff in a 1999 case, who received one of the largest workers’ compensation awards in the country. Their employer's insurance company previously rejected their $8,000 claim for surgery for carpal tunnel syndrome. But after pursuing the damages they knew they were entitled to, they managed to obtain a $12 million judgment when the case was brought to the U.S. District Court in Rapid City.

As such, this article aims to offer some basic knowledge regarding workers’ compensation laws, procedures, and resources in the state. These may come in handy even for minor workplace injuries.

South Dakota Workers’ Compensation Insurance Requirements

Businesses in South Dakota are not required to carry workers’ compensation insurance, unlike in many states. However, they are advised to have it, as they will be financially responsible in case their employees suffer from work-related injuries or illnesses.

Moreover, when they have an insurance policy in place, they can get legal protection from claims of negligence arising from employee injuries. Therefore, insurance can also serve as a financial shield from costly lawsuits.

When Is the Workers’ Compensation System Not Applicable?

According to the state’s Department of Labor, the workers’ compensation law does not apply to the following workers:

• Independent contractors.

• Farm or agricultural laborers (does not include other types of agricultural workers).

• Household servants whose work period is fewer than 20 hours per week or six weeks within 13 weeks.

• Workfare participants.

Where Can Businesses Obtain Workers’ Compensation Insurance?

Private insurance companies typically provide workers’ comp insurance policies in the state. Another option for employers is to self-insure, but this is more advantageous for corporations and high-value companies. For high-risk businesses unable to get insurance from the private market, the National Council on Compensation Insurance is able to provide coverage.

How Much Does Workers’ Compensation Insurance Cost?

The average cost of workers’ compensation insurance in the state is around $74 per month. However, the actual rate depends on factors such as a business’s number of employees, risk factors, coverage limits, industry, claims history, location, and payroll.

To access better rates, business owners are recommended to enforce employee training and safety standards and bundle various insurance policies. There are also financial incentives for employers who maintain safe workplaces, and these can be claimed through different policy options, such as the Merit Rating Plan and the Experience Rated Plan. 

Most importantly, proper employee classification can help employers save on insurance premiums and fend off misclassification fines. Small business owners can maximize their finances by securing pay-as-you-go insurance, which comes with changeable monthly premiums. 

Reporting Fraud

Employers must report instances of fraud, such as employees receiving benefits unlawfully or from their previous jobs. They must call the Insurance Fraud Unit at 605-773-6325.

South Dakota Workers’ Compensation Benefits

Under the workers’ compensation system, employees have coverage for injuries from workplace accidents, job-acquired diseases, and injuries from repetitive work tasks. 

Under this system, employers cannot:

• Take the cost of workers’ compensation insurance from employees’ wages.

• Prevent workers from filing work-related injury claims.

• Take action against workers who file claims.

Summary of Benefits

The following table summarizes the benefits employees can obtain after incurring a work injury or occupational disease:

Note that benefits cannot be granted if a worker’s injury is due to drug or alcohol use, willful misconduct, or failure to use required safety equipment. Coverage can also be denied if an employee gives a false representation of their health when obtaining employment.

Choice of Medical Provider

Employees have the right to choose the medical practitioner who will treat them, unless in emergency cases. But they have to notify their employer before the treatment begins and secure written permission.

Should employees want a second opinion, they have to pay the costs out of their pockets.

What Happens if an Employer Does Not Have Workers’ Compensation Insurance?

Because workers’ compensation insurance is not legally required in the state, some businesses may forgo getting one. When a work site injury happens, an employee may sue their uninsured employer for negligence.

In this case, the employee has to file a personal injury lawsuit to seek compensation for losses such as medical bills, lost wages, and pain and suffering. In some cases, if a worker’s injury or illness is caused by a third party — such as the manufacturer of defective equipment used at work — they can also be sued.

How to File a Workers’ Compensation Claim in South Dakota

In most cases, filing a workers’ compensation case can be a straightforward procedure. For further guidance, check out the Employee’s Guide to Workers’ Compensation.

The following sections summarize the steps employees should take when filing claims and the important deadlines to take note of.

When Is the Deadline for Workers’ Compensation Claims in South Dakota?

There are specific deadlines for various procedures in the workers’ compensation process. State law requires employees to reasonably send a written notice of their injury to their employer within three days after the occurrence.

If a claim is rejected, the injured employee has the option to file a petition for a hearing within two years. But if their claim is accepted and they need additional compensation, a petition must be filed within three years from the last payment of benefits.

It is also important to know that an employee’s right to benefits may forever be terminated if there is no medical treatment done within seven years. The seven-year timeframe begins on the day they file a report of an injury.

A Step-By-Step Guide on Filing a Workers’ Compensation Claim in South Dakota

1. Seek Medical Treatment

Go to a medical provider as soon as possible. Do not forget to document your injuries and keep relevant records, such as letters, bills, and forms. Always follow the doctor’s orders because failure can lead to claim issues. 

2. Inform Your Employer

Tell your supervisor or the business owner about your injuries. Submitting a written notice is highly recommended for recordkeeping purposes. It is also important to keep your employer updated about your condition.

Complete the employee section of Form 101 (First Report of Injury) and submit it to your employer within three days of the accident date. 

Note that your employer must promptly report your injuries to the Department of Labor and Regulation within seven business days. Their compliance with the reporting regulation is a must, even prior to receiving a written injury notice from you.

Contact the DLR at 605-773-3681 if your employer refuses to file the claim on your behalf or if you have concerns about the process.

3. Receive Workers’ Comp Benefits After Claim Approval

If your claim is approved after prompt filing, expect to receive your benefits within four to five weeks. You can get it on the same schedule as your regular paycheck or on a weekly basis. 

If there are unreasonable delays in excess of 10 days, be aware that your employer must pay a 10% penalty and add it to your benefits. 

What Should One Do if a Workers’ Compensation Claim in South Dakota Has Been Denied?

Contesting a denied claim can be a tedious and lengthy process. It is highly recommended that you consult a workers’ compensation lawyer at this stage. Many of them offer free consultations and provide services on a contingency-fee basis, so you do not need to pay any upfront fees.

The following is an overview of the steps needed to appeal a denied claim:

1. Contact the Claim Adjuster or Administrator

Once you receive the denial notice, call the claim adjuster or administrator right away and ask for details about the reason. This way, you can rectify any errors, such as incomplete information or application mistakes. You can also discuss your problem with the DLR by calling 605-773-3681.

2. Attend Mediation

You can opt for mediation by sending a request to the DLR in writing. The agency will be mediating the discussion between you and your employer in order for you to reach a settlement.

3. Attend the Hearing

Should you not choose mediation, or if the process is not successful, you can file a petition for hearing. This must be done within two years after receiving the official denial notice of the claim.

An administrative law judge will conduct the hearing, during which both sides must present evidence to support their claim. After that, the judge will issue a decision. Should you wish to appeal the decision, you must submit a written request to the DLR within 10 days of receiving the official notice. 

4. File an Appeal at the Circuit Court

If you still do not agree with the results of your case at this stage, you can file an appeal at the South Dakota Circuit Court. Cases not resolved at the circuit court can be taken to the South Dakota Supreme Court.

Resources for Injured Workers in South Dakota

Being hurt and losing your source of income at the same time can be overwhelming. As such, you can check out this section, which provides information on resources you can turn to for assistance. If you have a serious injury or a complicated case, reading up on these from the beginning of your workers’ compensation case may be helpful.

Some of these resources include free online tools and information on organizations offering pro bono or low-cost legal services. In most cases, individuals with limited financial means or from vulnerable populations are prioritized. Visiting these websites can be a good way to learn more about your rights and options under the law.

South Dakota Department of Social Services' Assistance Programs

Injured workers may be eligible to obtain medical assistance, limited economic aid, and mental health support from the state’s Department of Social Services. Other benefits that may be granted to them are Medicaid and childcare assistance. For more information, find a local office near you or visit the agency’s website.

South Dakota Department of Human Services

The state’s Department of Human Services can help workers with disabilities. It can assist them in finding jobs, accessing programs for communication devices and equipment, and getting support for independent living. Contact the South Dakota DHS by phone at 605-773-5990, through email at DHSInfo@state.sd.us, or via mail addressed to:

South Dakota Department of Human Services
3800 E. Hwy 34 — Hillsview Plaza
c/o 500 East Capitol Avenue
Pierre, SD  57501

Dakota Plains Legal Services

Dakota Plains Legal Services serves low-income individuals from 33 counties and Native American reservations in the state. It can help with issues involving unemployment insurance, Social Security benefits, disability assistance, SNAP, and other welfare programs. Injured workers can apply by submitting a filled-out intake form. They can also check the branch near them. Call 605-856-4444 for more details.

The State Bar of South Dakota

The State Bar of South Dakota connects people with legal needs to lawyers in their area through its Lawyer Referral Service. There is no fee to use the service online, and people can request an initial discussion with a lawyer about their workers’ compensation case. During the meeting, they can find guidance, explore their legal options, and learn more about potential lawyer fees.

South Dakota Legal Self-Help

This is a free online resource for individuals not represented by lawyers in a South Dakota court. Injured workers who are planning to bring their cases to the circuit or small claims court can check out the website for filing procedures, printable forms, and relevant contact details. 

South Dakota Free Legal Answers

This online resource enables people to ask questions about their workers’ compensation cases. A volunteer attorney delivers an answer through email after a person sends an inquiry through the intake page. Note that there is a three-question limit per person per year. 

South Dakota Department of Labor and Regulation

There are various programs for out-of-work individuals in South Dakota. The DLR provides training, job search services, and educational resources to enable individuals to achieve sustainable employment. These programs can be for workers with disabilities, aging workers, and young adults. You can find the location of your local branch through the map and directory on the website.

The state agency also facilitates the deployment of temporary financial assistance for unemployed South Dakotans. For further information, visit the reemployment assistance benefits webpage, call 605-626-2452, or send an email using the contact form on the website.