Employee Expense Reimbursement Requirements in South Dakota

At a glance

Requirements one by one

Necessary costs and losses tied directly to the work are covered

SDCL § 60-2-1 requires an employer to indemnify an employee for everything the employee “necessarily expends or loses” in direct consequence of the employee's duties or obedience to the employer's direction.

The direction may be unlawful, but the protection does not extend to an employee who believed the direction was unlawful when obeying it. The section does not add a separate advance-approval or primary-benefit test.

Ordinary risks and specified coworker losses are excluded

Under § 60-2-2, an employer generally need not indemnify losses caused by the ordinary risks of the business. The section also excludes losses caused by a coworker's negligence in the same general business unless the employer failed to use ordinary care in selecting the culpable employee.

By contrast, § 60-2-3 says the employer must “in all cases” indemnify losses caused by the employer's want of ordinary care.

The statutes supply no claim or payment procedure

Sections 60-2-1 to 60-2-3 state no employee submission deadline, receipt form, itemization requirement, missing-document substitute, employer-policy rule, reimbursement cap, payment clock, payment method, interest provision, agency claim, statutory damages amount, attorney-fee rule, or limitations formula.

South Dakota separately makes it a Class 2 misdemeanor under § 60-11-2 to require an employee to pay for a medical examination or records required as a condition of continued employment.

What trips people up

The indemnity duty is broader than the medical-examination rule. It reaches necessary expenditures and losses directly caused by duties or employer direction, subject to the exclusions in § 60-2-2.

The statute does not set a category-specific mileage rate, phone percentage, travel allowance, or home-office amount. Its text supplies a necessary-cost and direct-consequence standard instead.

Common questions

Does South Dakota require advance approval?

Section 60-2-1 states no separate advance-approval requirement. It asks whether the necessary expense or loss directly resulted from duties or obedience to the employer's direction.

Is there a statutory deadline for submitting receipts?

Not in §§ 60-2-1 to 60-2-3. Those sections state no submission period or required receipt format.

Are ordinary business risks reimbursable?

Generally no under § 60-2-2. But § 60-2-3 requires indemnity when the employer's want of ordinary care caused the loss.

Statutes and sources

• SDCL chapter 60-2 index. Current official chapter structure for employer and employee obligations. Official index (accessed July 14, 2026).
• SDCL §§ 60-2-1 to 60-2-3. Necessary expenditures and losses, the unlawful-direction exception, ordinary-risk and coworker-negligence exclusions, and employer-carelessness losses. Official § 60-2-1 (accessed July 14, 2026).
• SDCL § 60-11-2. Required continued-employment examination and records costs, with misdemeanor classification. Official text (accessed July 14, 2026).