Labor Department seeks to modernize unemployment system, expands apprenticeships and digital-access grant

Marsha Holtman, secretary of the South Dakota Department of Labor and Regulation, told the Joint Committee on Appropriations the department is pursuing several modernization and workforce initiatives for FY 2026 aimed at expanding services and reducing administrative risk.

Modernizing reemployment assistance: Emily Ward, administrative services director, said the department is migrating the reemployment-assistance (RA) computer system off an aging mainframe into cloud-based architecture using federal ARPA and general funds appropriated in 2022. Work to date has focused on benefits overpayment processing and nonmonetary determinations; accounting and enhanced fraud-prevention tools (including identity verification options) are scheduled next. The department said the modernization will strengthen security and allow additional identity‑verification methods such as in‑person verification at post offices and online verification.

Why it matters: The RA system is core to paying unemployment benefits and to employer tax administration; fraud has risen since the pandemic and the department said aggressive detection prevented roughly $658,000 in fraudulent payments in the fourth quarter of 2024.

Apprenticeships and digital access: Holtman described 160 participants in a new teacher apprenticeship program that places para‑professionals into paid apprenticeships so they can complete education requirements while staying in their communities. The department also announced it received a competitive five‑year State Digital Opportunity Capacity Grant from the Department of Commerce; the grant funds startup digital centers that will teach digital literacy, distribute refurbished devices and support device refurbishers with contracts. Holtman said the grant adds one federal-funded FTE and is designed to be self-supporting after the five‑year period.

Job service restructuring and one-stop move: The department described a statewide service-delivery model that focuses staff expertise by program rather than by location, expanded virtual services and a planned move of job-service staff into the Sioux Falls one-stop center beginning in March. Holtman said some positions were reduced in FY24 after federal grant changes, and the department used a hiring-freeze approach last year to manage vacancies.

Numbers and operations: Holtman said the department administers more than 30 federal grants and that less than 0.17% of total state general funds flow through DLR; the agency is heavily federally funded. She said DLR is budgeted at about 431 FTE and had a roughly 4% unutilized FTE rate in FY24. The department reported a 7.4% average turnover rate for GF&P earlier; for DLR, current turnover and vacancies were discussed with an emphasis on succession planning—51 employees were eligible for immediate retirement with more eligible within 5–10 years.

Quotes: “The intent [of reemployment assistance] is really not an insurance benefit when you’re off work, but it’s assistance while you’re seeking that next job,” Holtman said, describing program goals.

What’s next: DLR will continue RA computer system modernization, expand identity verification and fraud prevention, finalize the digital centers funded by the State Digital Opportunity Capacity Grant and continue to scale apprenticeship programs. The department said it will provide more detailed metrics and program data on request.