Skip to content
Oakclause

Independent Contractor Test in South Dakota

For unemployment insurance, South Dakota treats paid service as employment unless the worker is free from control or direction and customarily engaged in an independently established business, a two part test rather than the full ABC test.

Last checked . General information, not legal advice.

South Dakota at a glance

Test for unemployment insurance
Two part test: control and independent business
The Department of Labor and Regulation must be satisfied that both parts are met.
ABC test for unemployment
No
South Dakota's test has no usual course of business prong.

Sources

Last checked

The rules in South Dakota

Which test does South Dakota use to classify independent contractors for unemployment insurance?

Test for unemployment insurance in South Dakota: Two part test: control and independent business. The Department of Labor and Regulation must be satisfied that both parts are met.

Does South Dakota apply the ABC test for unemployment insurance?

No. ABC test for unemployment in South Dakota: no. South Dakota's test has no usual course of business prong.

Where do the South Dakota independent contractor tests come from?

The rules above come from SDCL 61-1-11. Each source is linked on this page. We last checked them in October 2026.

What this means in practice

Write down how the working relationship actually operates: who sets the hours, who supplies tools, whether the worker serves other clients and whether the work is part of the business's usual line of work. These facts drive every classification test, and a written independent contractor agreement helps only if it matches them.

Check each law separately. A worker can be a contractor under one statute and an employee under another, because wage laws, unemployment insurance, workers' compensation and tax rules may each use their own test. Federal law also applies its own tests alongside the state rules.

Misclassification can lead to back wages, unpaid unemployment contributions, interest and penalties. If a role is close to the line, read the statute and agency guidance for the state where the work is performed, or ask the state labor or unemployment agency how it applies its test.

General information, not legal advice. Laws change, and cities can add their own rules, so check the current statute before you rely on it.