Senate passes bill to allow verification of workers'comp on public construction projects after contentious floor debate

The South Dakota Senate passed Senate Bill 157, a measure aimed at addressing labor trafficking and unregulated labor practices on public construction projects by allowing verification of workers' compensation insurance when a complaint is filed.

Senator Jeffrey Peterson, the bill's prime sponsor, told the Senate that SB 157 "is to address labor trafficking that is occurring on construction projects in South Dakota" and that the bill uses verification of workers' compensation insurance on public projects as the enforcement mechanism. Peterson read language from South Dakota Codified Laws A7 62-6-4 to explain the department's inspection authority and said SB 157 simply permits the Department of Labor and Regulation (DLR) or the local contracting authority to verify that insurance is in place "if there's a complaint. And that's key if there's a complaint."

Opponents pressed several concerns on the floor. Senator Nybert said he opposed the bill, asking "Do we need another law?" and argued that contract provisions and existing breach-of-contract remedies already require contractors to carry workers' compensation insurance. Senator Crabtree warned the bill would give the DLR new investigative and monitoring powers and would require additional staff and resources; he also argued the statutory placement of the bill would not grant the department the oversight Petra described.

Senator Smith spoke in favor, saying the bill "puts a little bit of onus back on the person that does the hiring" and "levels the playing field for the contractors that are doing it right." In closing, Peterson said committee testimony included "heartbreaking stories" about injured workers whose employers lacked coverage and asked colleagues to vote yes.

During the post-vote sequence senators considered a title amendment (filed as 157C) that restored a narrower, original-style title describing the bill as "an act to require proof of workman's compensation insurance for contractors of public improvements." The amendment passed on a voice vote, and the title was amended before final-passage proceedings resumed.

The roll call on final passage produced a recorded tally of 19 yeas and 16 nays; the President declared the bill passed. The Senate record shows debate focused on the bill's investigative scope, the statutory placement for enforcement authority, resource implications for DLR, and the balance between protecting workers and avoiding regulatory overreach.

Ending: With final passage, SB 157 now moves forward with a clarified title; the enacted text and any implementing guidance will define how complaints trigger verification and which agencies will conduct checks.