South Dakota’s minimum wage is set to increase by 40 cents next year.
According to the state Department of Labor, starting Jan. 1, the minimum wage will increase from $10.80 an hour to $11.20 an hour.
The hourly minimum wage for tipped employees will be $5.60 per hour, half the minimum wage for non-tipped employees. Wages and tips combined must equal at least the minimum wage.
State law requires the minimum wage to be adjusted each year based on cost of living, as measured by the U.S. Department of Labor’s Consumer Price Index.
South Dakota voters approved the law establishing minimum wage increases in 2014. Prior to that, the state’s minimum wage was $7.25.
The minimum wage generally saw a bump of only two to three percent for several years following the passage of the law. However, it jumped 5.2% in 2022 and a record 8.5% in 2023 due to higher inflation.
Correction: An earlier version of this story erroneously stated the legislature created the minimum wage law. It was in fact established by voters through an initiated measure.