Abstract: In this paper we will discuss about the South Dakota Unemployment Insurance programs, run by the South Dakota Department of Labor. In the USA, the compensation amount and eligibility criteria vary from one state to another, for the State Government under the guidance of the Federal Law sets them. The process of South Dakota Unemployment Insurance benefit calculations had been changed in 2005 to reduce several negative effects.
The South Dakota unemployment insurance provides unemployment benefit, for some time, to those unemployed people of South Dakota who meet the eligibility criteria set by the South Dakota law. The unemployment insurance programs are normally run by the South Dakota Department of Labor in accordance with the Federal Law.
The compensation amount in South Dakota may vary from the other states of US. The duration of this unemployment insurance benefit will also vary from one state to another. Normally, the unemployment benefit amount is based on individual income within the base period.
The unemployment insurance trust fund of South Dakota had been stable during the 90s. The money was collected from the tax imposed on the employers and interests from the trust fund. During the last five years, the compensation amount has surpassed the fund's revenue because, the former is tied with wage inflation whereas the revenue has not increased proportionately.
The present system of unemployment insurance was designed by assuming a periodical adjustment method, that is, unemployment benefit would be adjusted from time to time considering several factors, for example, inflation. As a result, in 2004, The Department of Labor calculated that the trust fund amount would decrease by a huge amount within 2007, and become insolvent within 2008.
However, in 2005, the State Government of South Dakota made several changes in the unemployment insurance system to solve the above-mentioned problems. These are:
• The government increased the taxable wage base.
• The level of minimum tax rate had been increased by 13%.
• The government imposed additional surtax on all the employees working in South Dakota.
From now onwards, the insurance laws would be reviewed if any drastic change(s) in the state's economy occurs.