Do I need a permit to hire employees?

Hiring Employees in South Dakota: Permit Requirements

In South Dakota, you generally do not need a specific permit solely to hire employees. However, there are important operational steps and registrations required to comply with state and federal regulations when you begin hiring staff.

Key Operational Steps for Hiring Employees in South Dakota

• Register for an Employer Identification Number (EIN): Obtain an EIN from the IRS to legally hire employees and manage payroll taxes.
• Register with the South Dakota Department of Labor and Regulation: You must register as an employer for unemployment insurance tax purposes and workforce reporting.
• Obtain Workers’ Compensation Insurance: South Dakota requires most employers to carry workers’ compensation insurance to cover workplace injuries.
• Comply with Employee Classification Rules: Properly classify workers as employees or independent contractors to avoid penalties and ensure correct tax treatment.
• Maintain Payroll and Tax Records: Keep accurate records of wages, tax withholdings, and employee information for compliance and reporting.

Additional Compliance Considerations

• New Hire Reporting: Report all newly hired employees to the South Dakota New Hire Reporting Program promptly to assist with child support enforcement.
• Employment Posters and Notices: Display required state and federal labor law posters at your workplace to inform employees of their rights.
• Payroll Tax Withholding: Set up withholding for South Dakota state taxes where applicable and federal payroll taxes.

As of 2026, no separate hiring permit is required in South Dakota, but meeting these registration and compliance requirements is essential for lawful employee onboarding and ongoing operations.