Remote work does not remove your workers comp exposure, and where your people sit changes which state's rules apply. A South Dakota employer's coverage is designed to follow a worker even when they are injured out of state, and a worker based full-time in another state usually needs that state's coverage listed on your policy. Coverage is still optional in South Dakota, but a home-office injury is just as real as one on your premises.
Who this is for: South Dakota employers with staff who work from home, travel for work, or live in another state.
The short version
- A home-based employee is still an employee, and an injury while working counts even if it happens at their kitchen table.
- South Dakota coverage generally follows your worker when they are hurt while working outside the state.
- A worker who lives and works full-time in another state usually needs that state added to your policy, because that state's rules govern them.
- Some states require coverage even though South Dakota does not, so a remote hire can create a mandate you did not have.
- South Dakota has reciprocity arrangements with a few neighboring states for certain work, which your insurer can confirm.
Coverage follows the worker
South Dakota law is built so that an employer's coverage travels with an employee who is injured while working, whether that happens inside the state or elsewhere. That protects you when a South Dakota-based worker is hurt on a trip. The harder case is a worker who is permanently based in another state. That state's workers comp law usually applies to them, and many states, unlike South Dakota, require coverage. So your policy needs to list every state where your people regularly work, or a claim there may not be covered.
Where your worker sits changes the rules
| Worker location | Whose rules usually apply | What to do |
|---|---|---|
| Home office in South Dakota | South Dakota | Treat them like any in-state employee |
| South Dakota worker traveling out of state | South Dakota coverage generally follows them | Confirm your policy covers out-of-state work |
| Employee living and working in another state | That other state | Add that state to your policy; it may be required there |
| Worker split across states | Can be more than one | List each state where they regularly work |
Why remote hires can create a mandate
South Dakota makes coverage optional, but the state your remote worker sits in may not. If you hire someone who lives and works in a state that requires workers comp from the first employee, you can inherit that mandate for that worker, even though your South Dakota staff are optional. That is why a single out-of-state hire is worth a quick check before payroll starts. South Dakota also maintains reciprocity with a few nearby states for certain construction work, which can affect how a crew crossing the border is treated, so ask your insurer to confirm the current arrangements for your situation.
A remote-team example
Illustrative, not a quote. A Sioux Falls software company has eight in-state employees who work from home and one developer who lives in Minnesota. South Dakota does not require coverage, but the company buys a policy for its in-state staff so a home-office injury is handled, and it adds Minnesota to the policy because that state requires coverage for the resident developer. When the team travels to a client site out of state, the policy is written so those trips are covered too. See our workers comp for tech companies page.
Real questions South Dakota owners ask
Do I need workers comp for remote employees in South Dakota?
Coverage is optional in South Dakota, so the state does not require it for home-based staff. But a remote worker is still an employee, and an on-the-job injury at home can become a claim, so most employers cover remote staff just as they would on-site staff.
If a worker is hurt at their kitchen table, is that a claim?
It can be, if the injury happens while they are working. Remote does not mean off the hook: an injury in the course of the job is treated as work-related wherever it occurs, which is one reason employers carry coverage even for home-based teams.
Does my South Dakota policy cover an employee who travels out of state?
Generally yes. South Dakota coverage is built to follow your worker when they are hurt while working outside the state. Still, confirm your policy is written to include out-of-state work so a traveling employee is protected.
I hired someone who lives in another state. What do I do?
Add that state to your policy. A worker based full-time in another state is usually governed by that state's workers comp law, and many states require coverage from the first employee, so you may inherit a mandate South Dakota does not impose.
Can a remote hire in another state force me to carry coverage?
Yes. If the worker lives and works in a state that requires workers comp, you can take on that state's mandate for that employee, even though your South Dakota staff are optional. Check the destination state's rule before you start payroll.
If my crew works in a neighboring state, does my South Dakota coverage still count?
For certain work, yes. South Dakota maintains reciprocity arrangements with a few neighboring states, including for some construction, so a crew crossing the border may be handled under those agreements. Ask your insurer to confirm the current terms for your case.
How do I make sure a multi-state team is covered?
List every state where your people regularly work on the policy. A worker split across states can fall under more than one state's rules, and a claim in a state you did not list may not be covered, so keep the policy current as your team moves.
Why South Dakota owners choose Morrow
- We shop the right market for you. South Dakota workers comp is optional, so Morrow first helps you decide whether to carry it, then places coverage fast through the state's competitive private market of authorized carriers, since South Dakota has no state fund and no monopolistic fund of any kind.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related South Dakota guides
Every South Dakota business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in South Dakota (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- I only employ family: do I need workers comp?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- What workers comp does not cover
- Hiring your first employee: what changes
- South Dakota tech workers comp
This guide is general information, not legal advice. South Dakota rules and penalty amounts can change, so verify current requirements with South Dakota Department of Labor and Regulation, Division of Labor and Management or a licensed advisor before you rely on them. Last updated: July 2026.