New hiring laws in South Carolina for 2027: unemployment tax changes, criminal record clean-up and the federal rules that changed instead

As of November 2026, South Carolina's 2026 legislative session changed very little about how private employers recruit and hire. The changes that matter are an unemployment tax rewrite (Act 243 of 2026, S.688, effective July 1, 2026), which bases 2027 rates on 16 quarters of benefit charges instead of 12 and removes the cap on the late-report penalty, and criminal record clean-up that will change what some background checks show: mistaken-identity arrest records must be destroyed and multiple misdemeanor check fraud convictions can be expunged (Act 248, S.428, effective June 25, 2026). The bigger 2026 and 2027 changes for South Carolina employers are federal: Form I-9 edition dates, the end of automatic work permit extensions and the EEOC's withdrawal of its criminal records guidance.

South Carolina passed no pay transparency, salary history, non-compete, AI or new E-Verify law in 2026. Each item below links to the act on the Legislature's site or to the Code section that records it. The standing checklist (Department of Employment and Workforce account, withholding, E-Verify, new-hire reporting) is in our South Carolina hiring hub; this page is the dated list of what is new.

Which South Carolina hiring laws changed in 2026, and what changes in 2027?

South Carolina acts usually take effect on the Governor's approval; the acts below say so, and two took effect when the General Assembly overrode a veto. Sorted by date.

How does South Carolina's unemployment tax change for 2027?

S.688, ratified May 20, 2026, approved May 22, 2026 and in force July 1, 2026, rewrites how each employer's experience is measured. Under the amended S.C. Code 41-31-5, the benefit ratio, which sets the rate class, was based "through tax year 2026" on benefits charged during the twelve calendar quarters before the calculation date. "For tax year 2027" it uses "the sixteen calendar quarters immediately preceding the calculation date," and "beginning in tax year 2028" twenty quarters, in each case divided by the employer's taxable payroll for the same period.

A longer lookback means a bad year stays in the rate longer, and a good year helps longer. An employer that had heavy layoffs three or four years ago will carry those charges into its 2027 rate, when they would have dropped out under the old twelve-quarter rule. The act also changes penalties: the penalty for not filing a wage or contribution report within fifteen days of the Department of Employment and Workforce's demand stays at ten percent of the contributions due with a $25 minimum, but the $1,000 ceiling is gone, and the act's title says it also removes the cap on the penalty for failing to pay contributions. File every quarterly report on time, and check the rate notice for 2027 against your own records of former employees' claims.

Which criminal records will background checks stop showing?

• Mistaken-identity arrests. S.428 adds S.C. Code 17-1-43: "no later than one hundred eighty days after an investigation by a law enforcement or prosecution agency reveals that a person was arrested as a result of mistaken identity," the agency must destroy the arrest records, at no charge. A sealed copy is kept for three years and 120 days and may be held longer for investigations and litigation, but it "is not a public document and is exempt from disclosure, except by court order." The Governor vetoed the act on May 19, 2026; both chambers overrode the veto on June 25, 2026.
• Check fraud convictions. The same act amends S.C. Code 34-11-90 and adds "multiple misdemeanor offenses of fraudulent check" to the expungement routes in S.C. Code 17-22-910.
• Pre-2024 handgun possession charges. S.136, which became law when the House overrode a veto on January 14, 2026, amends S.C. Code 17-1-65 so the State "must dismiss all charges pending" for unlawful possession of a handgun that predate the 2024 Constitutional Carry Act, and expunge them once any related charges are resolved.

For employers this is mostly a reason to refresh procedures. A consumer reporting agency's database may still hold a record the State has since destroyed or expunged, so give the candidate the pre-adverse action notice and a real chance to dispute before you decide, as the FCRA requires. The state-level rules, including SLED's CATCH checks and what an expungement covers, are in South Carolina background check laws. With the EEOC's 2012 guidance rescinded on October 28, 2026 (EEOC release), a job-related review using the Green factors from the 1975 Eighth Circuit case (the nature and gravity of the offense, the time since it and the nature of the job) is still a sound way to decide and document; Title VII itself still applies.

Who needs a fingerprint check to work with children in DSS custody?

S.996, approved May 19, 2026, rewrites S.C. Code 63-13-190(A)(2). The fingerprint-based State Law Enforcement Division and FBI check now applies to "a volunteer or an employee of a contractor or subcontractor who contracts with the Department of Social Services for the delivery of child welfare services" and has direct unsupervised contact with a child in the department's custody. The old text listed specific services such as foster care, adoption and family preservation. Agencies that place staff with DSS child welfare contractors should complete the fingerprint check before the first shift that involves unsupervised contact, and remember that a conviction for a crime listed in Section 63-13-40(A) bars the placement.

What did not change in South Carolina?

• E-Verify for every employer. The Illegal Immigration Reform Act's private employer rules were not amended; see E-Verify requirements in South Carolina.
• No pay range or salary history law for private employers. Columbia's city rule and other states' laws for remote postings are covered in South Carolina salary history ban and pay transparency laws by state.
• No state ban-the-box law for private employers; see South Carolina ban-the-box.
• Non-competes are still judged under case law; the physician bill, H.4767, passed the House and got a favorable Senate committee report on May 5, 2026, but was not enacted. See South Carolina non-compete law.
• Staffing agency licensing under the Private Personnel Placement Services Act; see South Carolina staffing agency license.
• Drug testing and recording: see South Carolina drug testing laws and South Carolina recording consent for interviews, which still needs only one party's consent.
• No AI hiring law; the national picture is in AI hiring laws by state.

What should South Carolina employers do before January 1, 2027?

1. Review your unemployment history for the last sixteen quarters, and budget for the 2027 rate that will follow from it.
2. File every quarterly wage report on time, since the late-report penalty no longer stops at $1,000.
3. Check Form I-9 versions: paper forms should be the 01/20/25 edition or the 08/01/23 printing that expires 05/31/2027, and electronic systems should show the 05/31/2027 version, which also matters for the state's E-Verify rule.
4. Review reverification dates for employees on EADs in the affected categories, since a timely renewal no longer extends the card automatically.
5. Update criminal history procedures so they no longer cite the 2012 EEOC guidance, and give candidates time to show a record was destroyed or expunged.
6. Add the fingerprint step for anyone you place with a DSS child welfare contractor.

What does this mean for staffing agencies in South Carolina?

The unemployment change hits agencies hardest, because an agency is the employer of record for its temporary workers and their claims are charged to its account. From tax year 2027 four years of benefit charges count, and from 2028 five, so ending assignments with documented reasons, answering separation requests from the Department of Employment and Workforce promptly and filing on time all matter more than before. Agencies that act as employer of record should also see our South Carolina employer of record guide. The federal I-9 and EAD changes apply to every worker an agency employs, and other states' 2027 changes, for staff you place outside South Carolina, are in new hiring laws for 2027.