South Dakota Overtime Laws

September 15th 2024

The overtime laws in South Dakota serve as a crucial safeguard for employees, aiming to uphold their rights and ensure they receive just compensation for the hours they work beyond the regular schedule. Enshrined within the framework of South Dakota Labor Law, these regulations impose an obligation on employers to provide eligible employees with enhanced payment rates for any hours worked over the standard 40 hours per week. 

This article will provide information to successfully navigate South Dakota’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

South Dakota Overtime Rates

Overtime in South Dakota is governed by the federal Fair Labor Standards Act (FLSA). The law mandates that employees who work more than the standard 40-hour workweek are entitled to receive overtime compensation at a rate of one and a half times their regular pay for each additional hour worked. This provision aims to ensure that employees are appropriately compensated for their extra efforts and discourages employers from taking advantage of their workforce.

Since the regular minimum wage in South Dakota is $11.20 per hour, South Dakota’s overtime minimum rate is $16.80 per hour. 

Overtime Entitlement in South Dakota

According to Rhode Island overtime laws, overtime pay is required for any non-exempt employees.

Employees who earn below $844 a week ($43,888) and work in a non-exempt industry are entitled to overtime pay.

However, your overall eligibility for overtime pay will be based on what your job duties are as well as what type of business you are in.

Learn more about your Overtime Rights in South Dakota and Overtime Exceptions and Exemptions in South Dakota through our detailed guides.

Inconvenience Pay in South Dakota

Overtime-eligible employees, excluding those in law enforcement civil service, are entitled to a minimum of three hours of pay, regardless of the actual hours worked, if they meet the following conditions:

  • The employee has completed their regular shift and left the workplace.
  • The employee is unexpectedly called back to work.

Employees who are called in before their scheduled shift and continue working throughout the shift are not eligible for inconvenience pay. Only the hours worked are used to calculate overtime. Up to three hours of inconvenience pay (hours not worked) are compensated at the regular pay rate and are not included in the overtime calculation.

For instance, if an overtime-eligible employee has already worked 40 hours and is unexpectedly called back for an additional hour, the employee’s pay would be as follows:

  • Hours Worked: 41
  • Inconvenience pay hours at regular rate: 2

Overtime for Tipped Employees in South Dakota

Employers in South Dakota have the option to pay tipped employees a minimum hourly wage of $4.55. However, it is crucial that the total earnings, including tips, reach or exceed the regular state minimum wage of $10.80 per hour. If the combined amount of wages and tips fall short of the regular minimum wage, the employer is obligated to compensate the employee for the difference.

Tipped employees may qualify for overtime pay if they exceed a certain number of hours worked per week. When working overtime, these employees are entitled to receive compensation at a rate of 1.5 times their regular hourly wage. It’s important to note that their overtime rate should be calculated based on the full minimum wage, not the lower cash wage that may be provided by their employer.

Overtime for Salaried Employees in South Dakota 

In South Dakota, the entitlement to overtime pay is limited to specific salaried employees. A salaried employee is defined as someone who receives a predetermined salary, regardless of the actual number of hours worked. This signifies that even if salaried employees exceed the hours covered by their salary, they are still eligible for additional compensation for the extra hours worked.

To determine a salaried employee’s overtime rate, an employer must first determine their employee’s hourly rate by dividing the salary by the number of hours that salary compensates for.

Then, take the hourly pay rate to calculate the overtime rate for salaried employees using the following formula:

Hourly pay rate x Overtime Hours x Overtime Rate (1.5)

It is important to note that if an employee’s salary covers less than 40 (hours) in a workweek, their regular rate will be added for every subsequent hour working up to 40. Only after 40 hours will time-and-a-half be counted.

If an employee’s salary covers 40 (hours) in a workweek, then time-and-a-half will be paid for any hours over 40.

Overtime Exceptions and Exemptions in South Dakota

The Fair Labor Standards Act (FLSA) establishes guidelines for determining overtime eligibility, outlining exemptions for certain employees based on income thresholds or industry-specific criteria. When a state like South Dakota fully adopts the federal regulations, these exemptions also apply. As outlined in federal law, the exemptions include:

  • Executive, Administrative, Professional, and Outside Sales employees who receive a salary and earn at least $844 per week.
  • Highly compensated employees who earn more than $107,432 annually.
  • Computer employees who are salaried and earn a minimum of $844 per week.

These exceptions outline the criteria under which employees may be exempt from receiving overtime pay following the FLSA and its application in South Dakota.

Misclassification of Employees in South Dakota

In South Dakota, misclassification takes place when a company categorizes its workers as independent contractors or subcontractors instead of employees. Employers do this with the intention of evading legal responsibilities such as paying social security taxes, providing worker’s compensation, offering unemployment insurance, and granting overtime pay.

Employers are prohibited from misrepresenting employee positions to evade their obligation to provide overtime compensation. Merely assigning the label of an independent contractor to a worker, or through a written agreement, is not enough to avoid providing overtime payment.

Penalties for Unpaid Overtime Wages in South Dakota

In South Dakota, if an employer withholds wages from an employee, the employee has the right to seek compensation of twice the amount of the unpaid wages owed by the employer.

Under federal law, employers who fail to provide employees with the proper overtime wages may face liability for double the amount of the unpaid wages, in addition to bearing the costs and attorney’s fees incurred by the employees. These cases can be initiated by lawyers specializing in overtime pay and can be filed on behalf of a group of workers, collectively or as a class, who have all been affected by the same unlawful payment practices.

Legal Cases Relating to Overtime Compensation in South Dakota

Below, we present law cases relating to fair overtime compensation for employees in South Dakota: 

1. Secretary of Labor Files Complain on Behalf of Employees for Unpaid Overtime Wages

This case involved a complaint filed by Eugene Scalia, Secretary of Labor, United States Department of Labor, against G-Force Logistics, Inc., and Joe Giacometto, individually and jointly. The complaint alleged violations of the Fair Labor Standards Act (FLSA). The complaint stated that the G-Force failed to pay overtime wages to employees who worked more than 40 hours in a workweek and failed to maintain accurate records of employee wages. A default judgment was entered against G-Force as they failed to respond to the complaint.

The FLSA applied to enterprises engaged in interstate commerce, and G-Force met the criteria as it transports packages across state lines and reports a substantial annual gross dollar volume. Joe Giacometto, the sole owner of G-Force, was considered an “employer” under the FLSA, which made him jointly and severally liable for unpaid wages along with the corporation.

G-Force paid a flat day rate without accounting for overtime hours worked and excluded the monthly “safety/service bonus” from the regular rate. As a result, ten employees were owed unpaid overtime wages totaling $37,008.12. G-Force was also liable for liquidated damages, equal to the amount of unpaid wages.

The court granted the motion for default judgment, determining that the employees were entitled to a monetary judgment for the unpaid overtime wages and liquidated damages. Injunctive relief was also granted to ensure future compliance with the FLSA. G-Force was ordered to make payment to the U.S. Department of Labor within 30 days. The judgment amount was distributed to the affected employees, with appropriate deductions for taxes. 

Key lessons from this case:
  • The FLSA covers businesses that are involved in interstate commerce. This means those businesses are considered employers under the FLSA and can be held liable for unpaid overtime claims.
  • Failing to respond to an overtime wages claim can result in default judgment favoring the employee.
  • Individuals with operational control over a covered enterprise can be held personally liable for unpaid overtime wages under the FLSA.

2. Employee Files Unpaid Overtime Wage Lawsuit on Behalf of Himself and Colleagues

In the case of Knight v. Dakota 2000 Inc., Austin Knight filed a proposed collective action against Dakota 2000, alleging violations of the Fair Labor Standards Act (FLSA). He claimed that Dakota 2000 failed to pay overtime wages to him and other similarly situated employees who worked more than 40 hours per week. Knight sought conditional certification of the collective action and requested that notice be sent to potential plaintiffs so they could decide whether to join the lawsuit.

Knight worked as a production flow-back supervisor at Dakota 2000’s gas and oil worksites, while another employee, Rodney Smith, worked as an oil and gas production flow watch. Both employees claimed they frequently worked more than 40 hours per week under a rotational schedule known as a “hitch” and were paid only a day rate without overtime compensation. They argued that other Dakota 2000 employees with similar job duties also experienced the same treatment.

Knight presented written statements from himself and Smith, as well as a class list identifying 81 flow-back employees who were paid a day rate. This evidence indicated a common policy or practice of denying overtime pay to day-rate employees at Dakota 2000. Dakota 2000 opposed the conditional certification, arguing that Knight might be exempt from the FLSA’s overtime requirement and that he and Smith had different job duties. However, at that stage, exemption defenses were not considered, and differences in job duties were not sufficient to deny conditional certification.

The court granted Knight’s motion for conditional certification. It was found that he had made a modest factual showing of being similarly situated to the potential plaintiffs. The court also noted that Knight’s proposed notice to potential plaintiffs was timely and informative. However, there were questions about the scope of the collective action and the production of a list of potential opt-in plaintiffs, which was further discussed at a hearing.

Key lessons from this case:
  • Employees wishing to participate in a collective action must provide written consent.
  • Employees with different job duties and titles can still be considered when filing for conditional certification for collective action.
  • It is important to adhere to the rules that come with filing an overtime lawsuit to ensure that employees get the fair hearing they seek.

3. Employees File Second Lawsuit After Being Dismissed for Wrongful Termination

In the case of Gary and Teresa Hicks v. Thomas and Carolyn O’Meara, the Hickses sought statutory minimum and overtime wages for their work at Big Sky Motel, owned by the O’Mearas. The District Court initially granted summary judgment in favor of the O’Mearas, invoking the doctrine of res judicata, which barred the Hickses’ claim. However, the decision was reversed on appeal.

The Hickses were hired to manage the motel, performing various duties such as managing the front desk, taking reservations, doing laundry, maintaining and supervising housekeeping staff. Their 1-year contract specified their compensation based on monthly rates, with additional income from bus tour commissions. The Hickses were also provided living quarters and utilities by the O’Mearas. However, the O’Mearas terminated the Hickses’ employment just five months into the contract.

The Hickses initially filed a wrongful termination; however, their claim was denied. Subsequently, they filed a new action alleging failure to pay the minimum wage and overtime wages as required by the Fair Labor Standards Act (FLSA) and failure to pay the minimum wage as required by South Dakota law. They did not challenge their dismissal from employment.

The District Court’s summary judgment was based on the argument that res judicata applied, claiming that the causes of action were the same in both the wrongful termination suit and the wage claim. However, the appellate court disagreed. It determined that the underlying facts for each cause of action were different. While the wrongful termination claim focused on the wrongfulness of the dismissal, the minimum wage and overtime claim centered on the number of hours worked and the wages paid. Therefore, the two causes of action were considered distinct.

As a result, the appellate court reversed the grant of summary judgment, meaning the case was sent back to the District Court for further proceedings.

Key lessons from this case:
  • Employment contracts should clearly define the terms and conditions of employment, including compensation, working hours, and duties.
  • Res judicata, or claim preclusion, may bar a second lawsuit if it is brought on the same cause of action as a previous case.
  • An employee bears the burden of proof when it comes to stating a claim of wrongful termination or unpaid wages.

Learn more about South Dakota Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.