PIERRE, S.D. (MITCHELLNOW) The South Dakota Department of Labor and Regulation is considering asking the Legislature to raise an unemployment administrative fee charged to most of the businesses in the state. The fee helps cover the costs of personnel and operation of South Dakota’s reemployment system that is based in Aberdeen.
The yearly fee of $3 per employee currently brings in about $1 million. The increase under discussion would take it to $12 and bring in about $4 million. Currently exempt however are all businesses that have been in operation shorter than four years, as well as a group of several thousands of businesses whose reemployment accounts have reserve ratios of 2.25 or greater.
In 2023, the Legislature reduced unemployment tax rates that many businesses pay. A goal of the 2023 tax cut was to gradually spend down the reemployment trust fund. That appears to be on track. The lower rates took effect on January 1, 2024. The department estimates that businesses will save $18 million this year.
The potential increase will be further discussed when the council meets again in October.