Governor Noem signs first new law of the year
PIERRE, S.D. – On Wednesday, South Dakota Governor Kristi Noem signed HB 1011 into law which cuts the amount that employers must pay into unemployment insurance by 0.5%. This is the first law to be passed in South Dakota in 2023
Employers in South Dakota must pay into the state’s Unemployment Insurance Trust Fund, which pays unemployment benefits to employees that have lost their job. The exact amount they pay is based on an ‘average high-cost multiplier,’ (AHCM) which measures the number of recession years that the Fund has enough money to cover. An AHCM of 1.0 means the Fund can afford to pay one full year of benefits in case of a recession.
HB 1011 creates a new tax schedule to reduce employer contribution rates by 0.5% when the balance in the Trust Fund at the end of the fiscal year is at or above an AHCM of 1.5.
Additionally, the bill adjusts the trigger point for a surcharge – this is an additional tax imposed when the balance of the fund drops below $11 million. The surcharge trigger will no longer be tied to a dollar amount, but to an AHCM ratio.
“South Dakota’s economy is booming, our unemployment rate is the lowest in our history, and our people are choosing to work,” Noem said. “So many new businesses are choosing to call our state home, and our existing businesses are thriving, so our unemployment reserves are stronger than ever. It’s time to put money back in the pockets of hardworking South Dakota business owners.”
The law will take effect on July 1.