South Dakota’s minimum wage is $11.85 an hour in 2026, and it rises to $12.30 on January 1, 2027 [1]. The rate goes up each year with the cost of living, under a law voters passed as Initiated Measure 18 [2][3], and it can never go down [3].
At a glance
| Worker | 2026 | From January 1, 2027 |
|---|---|---|
| Most employees | $11.85 | $12.30 |
| Tipped employee, cash wage (tips must bring total to the full minimum) | $5.925 | $6.15 |
| New hire under 20, first 90 consecutive calendar days (opportunity wage) | $4.25 | $4.25 |
How the yearly increase works
South Dakota’s minimum wage law still names $8.50 as the base rate [2], but each January 1 that rate is adjusted by the increase in the Consumer Price Index for all urban consumers, comparing August to the August before [3]. The increase is rounded up to the nearest 5 cents, and the minimum wage can’t be decreased [3]. The Department of Labor and Regulation has to post the next year’s rate on its website by October 15 [3].
That’s how 2026’s $11.85 becomes $12.30 in 2027 [1]. The new rate applies to hours worked in the new year: the Department says hours worked in 2025 but paid in 2026 were still owed at the 2025 rate [4].
Where an employee is covered by both federal and state minimum wage laws, the employee gets the higher rate [4].
Tipped workers
A tipped employee is one who customarily and regularly gets more than $35 a month in tips [5]. An employer that takes a tip credit has to pay a cash wage of at least 50% of the minimum wage [5]: $5.925 an hour in 2026 and $6.15 in 2027 [1].
If tips plus the cash wage don’t reach the full minimum wage, the employer has to make up the difference as extra wages each regular pay period [5]. Employers also have to keep a record of all tips employees receive [1].
The opportunity wage for workers under 20
South Dakota allows the federal opportunity wage, sometimes called a training wage [6][4]. Employers can pay newly hired employees under 20 at least $4.25 an hour during their first 90 consecutive calendar days with that employer [4]. Employers can’t displace other employees in order to hire people at the opportunity wage [4].
Who isn’t covered
The state minimum wage doesn’t apply to [2][7][4]:
- Babysitters and outside salespersons.
- Employees of seasonal amusement or recreational establishments, organized camps, or religious or nonprofit educational conference centers that operate no more than seven months a year, or whose receipts in any six months average no more than a third of the other six.
- Apprentices, learners and people with a developmental disability, when the Department issues a permit setting their pay.
- Independent contractors, who aren’t employees under the law [4].
Everyone else counts, including part-time and temporary employees [4]. An agreement to work for less than the minimum wage isn’t effective for an employee who’s entitled to it [4].
If you’re not paid what you’re owed
You can file a wage dispute with the South Dakota Department of Labor and Regulation by completing its Claim of Unpaid Wages form, for wages owed or for not being paid at least minimum wage [8]. Paying less than minimum wage is a Class 2 misdemeanor [2].
- Pay schedule: employers have to pay wages at least once a calendar month, or on regular paydays set in advance [9].
- Double damages: in a lawsuit over unpaid wages, if a private employer was oppressive, fraudulent or malicious in refusing to pay, the damages are double the wages owed [10].
What the minimum wage adds up to
At $11.85 an hour, 40 hours a week for 52 weeks comes to about $24,648 a year before taxes [1]. At $12.30 in 2027, the same schedule comes to about $25,584 [1].
Sources
- South Dakota Department of Labor and Regulation: South Dakota Minimum Wage
- SDCL 60-11-3: Minimum wage, misdemeanor, certain employees excluded
- SDCL 60-11-3.2: Annual minimum wage adjustment
- South Dakota Department of Labor and Regulation: Frequently Asked Questions About Minimum Wage
- SDCL 60-11-3.1: Minimum wage for tipped employees
- SDCL 60-11-4.1: Opportunity wage allowed
- SDCL 60-11-5: Exemptions from minimum wage provisions
- South Dakota Department of Labor and Regulation: Wage and Hour Issues
- SDCL 60-11-9: Monthly wage payments required
- SDCL 60-11-7: Double damages for breach of obligation to pay wages
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What is the minimum wage in South Dakota in 2026?
$11.85 an hour, effective January 1, 2026, according to the South Dakota Department of Labor and Regulation. It applies to part-time and temporary employees too.
What will South Dakota's minimum wage be in 2027?
$12.30 an hour, effective January 1, 2027. The Department of Labor and Regulation has published the new rate, as state law requires it to by October 15 each year.
What is the tipped minimum wage in South Dakota?
At least 50% of the state minimum wage in cash: $5.925 an hour in 2026 and $6.15 in 2027. If tips plus that cash wage don't reach the full minimum wage, the employer has to make up the difference each pay period.
Can a new employee be paid less than minimum wage in South Dakota?
Only under the federal opportunity wage. Employers can pay newly hired employees under 20 at least $4.25 an hour during their first 90 consecutive calendar days, and can't displace other employees to do it. Otherwise, an agreement to work for less than minimum wage isn't effective.
How do I report unpaid wages in South Dakota?
Complete the Claim of Unpaid Wages form from the South Dakota Department of Labor and Regulation's Wage and Hour page. You can use it for wages owed or for not being paid at least minimum wage.