SIOUX FALLS, S.D. (KELO) — South Dakota’s minimum wage is set to rise by 30 cents on January 1, 2025, bringing the minimum wage up to $11.50 from $11.20.
But how does this stack up to surrounding states? And what dictates when the South Dakota minimum wage changes?
Let’s answer that second question first:
How is a minimum wage increase calculated in South Dakota?
In South Dakota, the non-tipped minimum wage is adjusted each year, “increasing at the same rate as the cost of living as measured in the Consumer Price Index published by the U.S. Department of Labor.“
Under South Dakota law, the minimum wage cannot decrease, and the total increase in a given year, dependent on the CPI, is rounded up to the nearest 5 cents.
States choose different ways to adjust minimum wages.
In Minnesota, the state uses a formula to adjust minimum wage, with the increase being either a 2.5% increase or the percentage increase in inflation, whichever is lower. Minnesota rounds increase to the nearest cent, as opposed to South Dakota, which rounds up to the nearest 5 cents.
In Nebraska, an initiated measure was passed by voters which will increase the state’s minimum wage by $1.50 each year through 2026. After 2026, the minimum wage will be adjusted annually based on the percentage increase of the CPI of the federal Dept. of Labor for the Midwest Region.
Some states don’t have a metric for annual adjustments.
In Iowa, for instance, the minimum wage of $7.25 has not risen since 2008. This is because Iowa follows the federal minimum wage only, and the last time the federal minimum wage was raised was in 2009, when it was increased to $7.25.
North Dakota is in a similar bucket. Having no minimum wage law of its own, it also follows the federal minimum wage.
So how exactly does South Dakota stack up to our neighbors?
South Dakota
South Dakota is, as mentioned, seeing a state minimum wage increase of 30 cents, from $11.20 to $11.50.
Minnesota
In the past, Minnesota has had a different scale of minimum wages for large and small employers, as well as for training wages. On January 1, 2025, the minimum wage for all employers, small or large, will increase to $11.13.
Minnesota will maintain a 90-day training wage, which will be set at $9.08 as of January 1, 2025.
In Minneapolis and St. Paul, the minimum wage is higher, as these cities have passed their own additional statutes regarding minimum wage. It will be $15.97 in Minneapolis, while in St. Paul there will be a scale of $15.97 for large/macro businesses, $15.00 for small businesses and $13.25 for micro businesses.
Nebraska
Due to the initiated measure passed in 2022, the minimum wage in Nebraska is increasing by $1.50 on January 1, 2025 from $12.00 to $13.50.
North Dakota
North Dakota’s minimum wage is not set to increase on January 1 and will remain at $7.25.
Iowa
Iowa’s minimum wage is not set to increase on January 1 and will remain at $7.25.
Wyoming
Wyoming’s minimum wage is not set to increase on January 1, 2025. Wyoming in a unique case for states surrounding South Dakota. It too follows the federal minimum wage of $7.50, but also allows a basic minimum wage of $5.15 for employees not protected by the federal Fair Labor Standards Act (FLSA).
The FLSA is the federal act which establishes laws on minimum wage, overtime pay, child labor standards and other such regulations. The act has some exemptions, including ones for employees employed legitimately as executive, administrative, professional and outside sales employees.
For executives, administrators and professionals, employees must be compensated via salary of fees at a rate of at least $684/week, which is equivalent to $17.10 for a 40-hour week.
Outside sales exemptions require that an employee’s main duty must be making sales as defined in the FLSA or obtaining order or contracts for services. Essentially, these would be commission based positions in which a business in Wyoming could set a base wage of $5.15 as long as the employee has the ability to earn commission by way of sales practices approved by the FLSA.
These sales would also have to regularly occur away from the employers place of business.
