Department of Labor and Regulation

Title - Workers' Compensation

Coverage for Independent Contractors

Owner-Operators of Commercial Motor Vehicles Operating as Independent Contractors

In South Dakota, truckers who own and operate their own truck, road tractor or truck tractor may be certified as an independent contractor for workers' compensation insurance purposes. An individual, partner or corporate shareholder who owns a vehicle licensed and registered as a truck, road tractor or truck tractor by a governmental agency and who operates as an independent contractor may elect to participate in this state's worker's compensation system as a sole proprietor.

Alternatively, an owner-operator and the motor carrier to whom the owner-operator's vehicle is leased may mutually agree that the owner-operator will be covered under the motor carrier's workers' compensation insurance policy or authorized self-insurance, if the owner-operator agrees to pay the premiums requested by the motor carrier. (See South Dakota Codified Law (SDCL) 62-1-13.)

Before applying for certification as an independent contractor, you must meet these requirements:

  1. Are you an individual, partner or shareholder of a corporate owner-operator owning a vehicle licensed and registered as a truck, road tractor or truck tractor by a governmental agency?
  2. Are you properly licensed to operate the vehicle?
  3. Do you anticipate operating that truck in South Dakota under contract with a carrier licensed in South Dakota?

Per SDCL 62-1-11, to receive certification as an independent contractor, the owner-operator and the carrier shall provide written documentation that the following are substantially present:

  1. The owner-operator is responsible for the maintenance of the vehicle.
  2. The owner-operator is responsible for the vehicle's operating costs, including fuel, repairs, supplies, collision insurance and personal expenses for the operator while on the road.
  3. The owner-operator is responsible for supplying the necessary personnel to operate the vehicle, the personnel are considered the owner-operator's employees, and the owner-operator is responsible for providing proof of workers' compensation insurance for the employees.
  4. The owner-operator's compensation is based on factors related to the work performed, including a percentage of any schedule of rates or lawfully published tariffs, and not on the basis of the hours or time expended.
  5. The owner-operator determines the details and means of performing the services, in conformance with regulatory requirements, operating procedures of the commercial carrier, and specifications of the shipper.
  6. The owner-operator enters into a written contract which specifies the relationship to be that of an independent contractor and not that of an employee.

The Department shall issue an independent contractor certification if all the requirements are met by the owner-operator. The laws regarding owner-operators being licensed as independent contracts are found in SDCL 62-1-10 through 62-1-13. The rules regarding the issuance or denial of an independent contractor certification are found at Administrative Rules of South Dakota (ARSD) 47:03:07.

Apply for Certification as and Independent Contractor

Independent Contractor Verification Form (complete online, then print for mailing)

Disclaimer

The information provided on this Web page should in no way be considered legal advice. For specific information about your legal rights, you should consult your personal attorney. If you have a general question, contact us.

South Dakota Department of Labor and Regulation
Division of Labor and Management
700 Governors Drive
Pierre, SD 57501
Phone: 605.773.3681
email


Marcia Hultman, Secretary
700 Governors Drive
Pierre, SD 57501-2291
Tel. 605.773.3101
Fax. 605.773.6184