Legislative Updates

Let’s be honest about what’s happening in recruitment right now.

When generative AI flooded the market, human resource teams and hiring managers thought they had found the ultimate cure for their heaviest burden: volume. Facing hundreds of applications per job posting, the promise of an algorithm that could sort résumés, match candidates, and filter out the noise in seconds sounded like a lifesaver.

But out here on the ground, the reality looks very different.

Instead of fixing the hiring funnel, over-relying on automated AI tools has broken it. We’ve accidentally built an automated echo chamber. Candidates are using AI to perfectly engineer and keyword-stuff their resumes, and companies are using AI to screen them out. It’s a game of bots fighting bots, and it’s wiping out the actual human connection required to make a great hire.

For organizations relying purely on automated gates to filter talent, the "efficiency" gains are quickly being overshadowed by some pretty glaring pitfalls:

1. We are chasing keywords, not competence.

When 60% to 80% of applicants use AI to polish their CVs to exactly match a job description, traditional Applicant Tracking Systems (ATS) fail. The algorithm ends up rewarding the candidate who knows how to prompt a chatbot, not necessarily the person who can do the job. This creates a massive wave of "false negatives," quietly discarding brilliant, non-traditional candidates or "diamonds in the rough" simply because they didn't write their resume like a robot.

2. The trap of the "Black Box" monoculture.

The initial pitch for AI hiring was beautiful: "It will eliminate human subconscious bias." Unfortunately, machine learning models don't eliminate bias; they institutionalize it. Because these tools are trained on historical data, they look at who was successful in the past and try to clone them. It quietly favors specific universities, continuous timelines, or exact language patterns, building a rigid corporate monoculture that actively works against your diversity and growth goals, all behind a closed curtain that is incredibly hard to audit.

3. Top talent is walking away.

Hiring is, and always will be, a relational process. When a company forces a candidate through a cold, entirely automated workflow—like a one-way video interview judged by an algorithm, it degrades the employer brand. Studies show that a staggering 66% of professionals say they’d refuse to even apply to a company using AI evaluation tools. The best candidates want to talk to people, not software. If your hiring process feels cold and transactional, the top 10% of talent will simply opt out.

4. The legal landscape is shifting fast.

Governments are cracking down on automated employment tools. From New York City's Local Law 144 requiring independent bias audits, to Colorado's strict transparency acts, and the EU's high-risk classifications for HR tech.

AI in the Workplace: What South Dakota HR Professionals Need to Know

As HR professionals in Sioux Falls and across South Dakota, we're navigating an increasingly complex landscape of artificial intelligence in the workplace. While our state hasn't enacted comprehensive AI-specific legislation like some neighboring states, understanding the current regulatory environment and preparing for future developments is crucial for our organizations.

Current State of AI Regulation in South Dakota

South Dakota currently remains in what experts call the "no dedicated AI law" cohort as of 2026. Instead of comprehensive AI legislation, our state has taken a more targeted approach with narrow AI bills focused primarily on government use and deepfakes. Specifically, South Dakota has enacted:

1. An election-deepfake disclosure statute (SB 164, 2025)
2. AI-generated CSAM criminalization (SB 79, 2024)

The state has focused on data broker bills but has not passed any AI-specific statutes. Instead, South Dakota relies on existing legal frameworks to address AI-related issues.

What This Means for HR Practices

While South Dakota hasn't passed specific workplace AI regulations, our state's lawmakers and regulators are increasingly focused on how AI intersects with:

• Consumer protection
• Employment practices
• Fraud prevention
• Election integrity
• Data security

This means that while there are no specific AI disclosure requirements for employers in South Dakota yet, we should treat AI systems like any other regulated business system.

Regional Developments to Monitor

Although South Dakota hasn't enacted comprehensive AI workplace legislation, our state is monitoring developments in neighboring Minnesota, whose HF 4654 law became effective on August 1, 2026. Additionally, several states have enacted significant AI employment laws that may influence future South Dakota legislation:

• Colorado became the first state to authorize comprehensive legislation specifically regulating AI in employment decisions with its CPAI Act, effective June 30, 2026.
• Illinois, Texas, California, and Utah have also implemented AI laws affecting employers.

Practical Steps for South Dakota HR Professionals

Given the current regulatory environment, here are recommended steps for SESHRM members:

1. Conduct an AI Inventory: Document all AI systems used in HR functions, including recruitment, performance management, and employee monitoring.
2. Focus on High-Impact Areas: Given South Dakota's economic concentration in agriculture, financial services, and tourism, pay special attention to AI applications in these sectors.
3. Prepare for Cross-Border Compliance: If your organization serves EU customers, remember that the EU AI Act applies regardless of your location, with penalties reaching 35 million or 7% of global revenue. The deadline for compliance was August 2, 2026.
4. Monitor Legislative Developments: The South Dakota Legislature is currently reviewing AI impacts on the agricultural sector, which could lead to future workplace regulations.
5. Consider Voluntary Best Practices: While not required, implementing transparency measures about AI use in employment decisions may future proof your organization against potential regulations.

Looking Ahead

The pace of AI legislation is accelerating nationwide. By March 2026, 1,561 AI bills had been introduced across 45 states which is a faster pace than any previous category of tech legislation, including data privacy. While South Dakota has been slower to enact comprehensive AI workplace regulations, this landscape could change quickly.

As HR professionals, staying informed about these developments will be essential for maintaining compliance and ethical standards as we increasingly integrate AI tools into our workplace practices.

Hello everyone!

Did you know that the SD Department of Labor has a List of Various News items/events on their website?  Here you will find the latest news relating to Labor's various programs.  Check it out below.  

https://dlr.sd.gov/news/default.aspx

The 2026 legislative session in Pierre wrapped up with some clear takeaways for anyone managing people in South Dakota. Here's what happened:

State Employee Compensation:

The headline news is the $7.5 billion budget for FY 2027, which included a modest

1.4% bump for state employees. This was part of what legislators called their "big three"

priorities along with K-12 education and Medicaid providers. It's not a huge increase, but

it's something after tight budget years.

Employment Law Landscape

No major shakeups in employment law this session. The existing framework stays in place:

 The South Dakota Labor Relations Act continues governing labor-management relations

 The Human Relations Act still applies to all employers (even those with just one employee)

 Anti-discrimination protections remain unchanged, with the Division of Human Rights still handling complaints

 Workplace safety continues to follow federal OSHA standards since South Dakota doesn't have its own state plan

What Didn't Happen

Notably, absent were any new laws on:

 Minimum wage changes

 Overtime regulations

 Paid leave requirements

 Employee classification rules

Legislators seemed focused elsewhere this year—on things like property tax relief, data center regulations, and that controversial silencer bill that made South Dakota the first state to declassify them as controlled weapons.

Bottom Line

If you're in HR in South Dakota, not much has changed in your day-to-day legal compliance requirements. The state employee compensation increase is the most direct impact, but for private sector employers, it's largely business as usual.

For the nitty-gritty details on compliance, the Department of Labor and Regulation remains your best resource.

Hello SESHRM Members!

Based on the 2026 South Dakota legislative session (as of early February 2026), several bills addressing human resources, labor, and employment have been introduced. Key focus areas include labor organization restrictions in education, state employee benefits, and post-employment restrictions. 

Labor & Public Employment

• HB 1217 - Public Education Labor Restrictions: Limits the use of taxpayer funds and resources by public education employers to support a labor organization or affiliate, such as restricting payroll deduction for union dues and prohibiting the use of public funds for union activities.
• HB 1279 - Technical College Employee Benefits: Permits technical college employees to join the state health plan, allowing the human resources commissioner to include them in the state's self-funded or group health insurance programs.
• HB 1072 - State Employee Salary Payment: Provides an appropriation of over $8 million for a 1.5% salary payment to state employees.
• SB 153 - Non-Compete Agreements: Prohibits certain restrictions in employment contracts for community services providers.
• HB 1209 - E-Verify Requirement: Requires employment verification eligibility through the E-Verify program.
• SB 63 - Apprenticeship Office: Establishes the state office of apprenticeship within the Department of Labor and Regulation.
• SB 6 - Reemployment Assistance: Reduces the maximum duration of an individual's reemployment (unemployment) benefits from 26 weeks to 12 weeks in certain circumstances

Human Resources & Conflict of Interest

• HB 1221 - Governor's Office of Economic Development (GOED) Restrictions: Establishes post-employment restrictions for employees of the Governor's Office of Economic Development, creating a penalty for violations.
• SB 93 - State Employee Post-Employment Contracts: Prohibits certain state officers or employees from being employed by an organization that was a recipient of a state contract for a period of up to two years, depending on the contract value

Other Labor-Related Items

• HB 1003: Revises the daily meal allowance for wildland fire employees and fire suppression forces.
• Minimum Wage (Effective Jan 1, 2026): The Department of Labor and Regulation updated the minimum wage for tipped employees to $5.925/hour

Look for more updates as the Session enters the second half.

In September, the IRS finalized regulations giving guidance for the SECURE 2.0 Act of 2022 rule which requires certain participants to contribute contributions on a Roth basis beginning in 2026.  The SECURE 2.0 Act specifies that any 401(k), 403(b) or 457(B) which allows participants to make catch-up contributions must require participants whose compensation exceeds $145,000 for the prior year have contributions designated as Roth contributions.  The $145,000 income limit will be adjusted annually for inflation.  

The IRS announced that the affordability threshold under the Affordable Care Act (ACA) for employer sponsored health plans will increase from 9.02% in 2025 to 9.96% of an employee's household income for 2026.  Under the ACA, an employer's insurance is considered "affordable" if the employee's contribution does not exceed the current year's percentage of household income.    

The 2026 annual employee contribution limit for dependent care flex spending will be increasing from $5,000 to $7,500 for single individuals and married couples filing jointly which is a 50% increase.  The increase is due to President Donald Trump's "One Big Beautiful Bill Act" which was signed on July 4th.  The current limits have been in place since 1986.

Americans will have three different opportunities to be eligible for Health Saving Accounts under President Trump's new bill.

1. Insurance plans on the Markplace have different categories such as gold, silver, bronze or catastrophic.  Enrollees on a bronze or catastrophic plan will now be eligible for HSAs.  They were previously eligible on a case-by-case basis. 

2.  Under current law, those who participate in a direct primary care service arrangement are not eligible for HSAs.  The new law allows those who are under a HDHP to participate in a direct primary service arrangement to participate in an HSA.

3. HDHP will not be able to cover telehealth expenses prior to the deductible without disqualifying someone from opening an HSA.

The Supreme Court recently ruled that retirees are not protected under Title I of the ADA who do not hold or seek employment at the time of the alleged discrimination.  Karyn Stanley was hired in 1999 with the City of Sanford, Florida.  At that time, retirees with 25 years of service or those who retired early due to a disability were allowed to stay on the City's health insurance until the age of 65.  In 2003, the City updated their benefits policy to allow retirees subsidies until the age of 65 for those with 25 years of service and to 24 months of subsidies for those who retired due to a disability.  The dispute was if ADA protections extend into post-employment.  The Supreme Court ruled that the ADA protections do not extend to retirees who neither hold or seek employment at the time of the claim.