Laws for Salaried Employees in South Dakota

South Dakota follows federal guidelines regarding salaried employee compensation.
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South Dakota's labor laws follow the federal Fair Labor Standards Act, which regulates how employers compensate employees. The law applies to businesses that gross $500,000 a year or more and mandates the payment of a minimum wage for hours worked. South Dakota's minimum wage, as of 2011, is $7.25 an hour. This applies to salaried employees as well as those who are paid by the hour.

Minimum Wage and Salary

If a South Dakota employer chooses to pay an employee by the hour, the salary must be calculated according to the number of hours per week the employee typically works. A standard workweek consists of 40 hours per week, so an employer's salary must break down to at least $7.25 an hour for each hour worked if the salaried employee typically works 40 hours or less.

Overtime Calculation

If a South Dakota employer regularly expects a salaried employee to work more than 40 hours a week, the salary must factor in overtime pay for hours worked in addition to 40 hours per week. Overtime is 1-1/2 times the employee's regular hourly rate. Under federal law, neither the employer nor the employee may waive overtime rates.

Overtime Exemptions Under the FLSA

Employers do not have to pay overtime to "white collar" employees who fall under certain categories and meet certain criteria. Those who work in executive, administrative, professional or outside sales positions or are certain types of computer experts may not qualify for overtime pay. In order to be exempt, an employee generally must make at least $455 a week on a salary basis. Highly compensated employees who earn a salary of $100,000 a year or more may also be exempt from overtime.

Read More: Overtime Guidelines by the Fair Labor Standards Act (FLSA) on Exempt vs. Non-Exempt

Unemployment Insurance

Most salaried employees are covered under South Dakota's unemployment insurance laws, meaning they may draw unemployment pay if they are laid off. Exceptions include work-study students, elected officials and those working for elections, employees of religious organizations and railroad employees. Small businesses, typically agricultural businesses that only employ a few workers on a seasonal basis, are normally exempt from unemployment insurance requirements.