When independent contractors with no employees work as subcontractors, South Dakota law requires them to sign affidavits verifying that they are exempt from workers’ compensation coverage.
The state established this requirement in 2015 to prevent general contractors from being unnecessarily charged workers’ compensation premiums for subcontractors with no employees. South Dakota law does not require independent contractors to carry workers’ compensation coverage for themselves.
Signing the affidavit establishes a “rebuttable presumption” that the independent contractor is not an employee for the purposes of workers’ compensation, meaning the independent contractor’s status could still be contested in court.
See the Independent Contractor Affidavit of Exempt Status and Fact Sheet for more information.