Nebraska voters passed Initiative 436 in November 2024 in the General Election mandating that Nebraska adopt paid sick leave. As with any ballot initiative, there are always issues and practical factors in actual employment situations which require conformance of such an initiative to existing Nebraska law. Therefore, the legislature passed enabling legislation in the form of LB 415, and the Nebraska Healthy Families and Workplaces Act (hereinafter “Act”), is now codified in the Nebraska Statutes at Neb. Rev. Stat. §48-3801 through §48-3811 (2025). The new paid sick leave law takes effect on October 1, 2025, but Nebraska employers must be prepared by September 15, 2025, to send out notices to all employees and have posters from the Nebraska Department of Labor in place prior to October 1, 2025. Let’s examine the key requirements of this new law for Nebraska employers.
Coverage
All private employers in Nebraska with more than 10 employees will be covered by the Act. Employers with 10 employees or less will be exempt from the Act, as are The United States and the State of Nebraska and its agencies, departments and political subdivisions.
Any individual employed by an employer, including part-time and temporary employees, will be covered with the following exemptions: Independent contractors, individuals who work in Nebraska for fewer than 80 hours in a calendar year, individuals employed in agricultural employment of a seasonal or other temporary nature, any employee under 16 years of age, owner-operators, and any employee subject to the Federal Railway Unemployment Insurance Act are exempt from the Act’s requirements.
Requirements of the Act and Accrual and Carry-Over Rules
Eligible covered employees will begin accruing paid sick time after 80 hours of consecutive employment in Nebraska and shall accrue a minimum of one hour of paid sick time for every 30 hours worked. Employees employed by a small business, defined in the Act as employers with 11 employees through 19 employees during a given work week, including part-time and temporary employees, will be entitled to accrue up to 40 hours of paid sick time in a year. Employees of employers with 20 or more employees, including part-time and temporary employees, may accrue up to 56 hours of paid sick time in a year. The Act requires that employers report to each employee each payroll period the amount of accrued paid sick time available to the employee, the amount of paid sick time taken by the employee to date in the current year, and the amount of pay the employee has received as paid sick time on each paycheck stub or in an attachment to the employee’s regular paycheck. If an employer’s payroll system is not capable of including this information, the Nebraska Department of Labor (hereinafter “NDOL”) has made it clear that any reasonable method of reporting this information to the employee will be accepted, including an on-line system where employees can regularly access this information.
With the new law taking effect on October 1, 2025, the Act provides that any and all paid sick time or PTO provided to an employee on or after January 1, 2025, and before October 1, 2025, shall be counted towards a covered employer’s obligations under the Act for calendar year 2025.
Employees who are exempt from overtime shall be assumed to work 40 hours in each work week for purposes of paid sick time accrual, unless their typical work week is less than 40 hours. Accrued sick time shall be carried over to the following year, however, a small employer is not required to allow an employee to use more than 40 hours accrued sick leave in any given calendar year, and a larger employer is not required to permit an employee to use more than 56 hours of paid sick time in any given calendar year. In lieu of carryover of unused paid sick time, covered employers may pay an employee for unused paid sick time.
Nebraska employers who already maintain a paid leave policy, such as a combined PTO policy which incorporates paid vacation and sick leave, which equals or exceeds the requirements of the new Act, will not be required to provide any additional paid sick time under the Act, and will not be obligated to permit employees to accrue or carry over benefits beyond the employers’ existing paid leave policy and any caps contained therein.
In accordance with Nebraska law, employers will not be required to pay out any accrued, but as yet unused, sick leave upon separation of an employee from employment. However, employers in Nebraska who combine vacation and sick leave into one overall PTO policy, and do not differentiate between sick leave and vacation, will still be required to pay out all accrued but unused PTO upon termination pursuant to existing Nebraska law. Moreover, it is important to note that, under the new Act, if an employee with accrued paid sick leave separates from employment with a covered employer, and that employee is rehired by the same employer within 12 months of separation, all previously accrued paid sick time that had not been used or paid out to the employee must be reinstated. In such circumstances, the employee will be entitled to immediately use accrued paid sick time and accrue additional paid sick time at the recommencement of employment.
Requirement to Provide Paid Sick Leave to Employees.
Use of paid sick time by an employee may be used for a broad variety of purposes, including the employee’s own injury, illness or health condition, to care for a family member with a mental or physical illness, injury or health condition, or closure of an employee’s place of business due to a public health emergency, the employee’s need to care for a child whose school or place of care has been closed due to a public health emergency, or the employee’s need to self-isolate due to a health exposure or condition. Unlike certain other similar federal and state laws, paid sick time under the Act may be used in the smallest hourly increment that an employer’s payroll systems use to account for absences of use or other time, i.e., employers may not require it be used for at least a full day’s absence. Any employer that requires notice of the need to use paid sick time in accordance with this section shall establish and maintain a written policy that contains reasonable procedures for employees to provide notice.
In the event an employee utilizes paid sick time for more than three consecutive workdays, an employer may require reasonable documentation, e.g., a doctor’s note, that the paid sick time has been used for a purpose covered by the Act. However, for absences of less than three days, employers may not require medical certification.
Enforcement, Notice and Posting Requirements
Enforcement of the Act and the new paid sick leave law will lie strictly with the NDOL. The law excludes any private right of action on the part of employees complaining of noncompliance. The NDOL’s Labor Standards Division will receive complaints in the same manner as it receives complaints under the Nebraska Wage Payment and Collection Act and other Nebraska laws. The NDOL will have the authority to conduct a formal investigation, including issuance of subpoenas, if necessary, and if an employer is determined to be in violation of the new Act, a citation may be issued with penalties up to $500 in the case of a first violation, and not more than $5,000 in the case of a second or subsequent violation.
On or before September 15, 2025, employers covered by the new Act must give employees notice of their entitlement to paid sick time, the amount of paid sick time that may be accrued, the terms of use guaranteed under the Act outlined above, and other details of the Act. Employers must also display a poster created by the Nebraska Department of Labor that contains all of the information required in the notice in a conspicuous and accessible place in each department or establishment where covered employees are employed. These posters may be obtained from the Nebraska Department of Labor, and it has provided the following link for such inquiries laborstdrdsinquiries@nebraska.gov
Action Items for Nebraska Employers
Covered employers should determine head counts and exempt status to prepare for the effective date of this Act. Audit your covered workforce identifying those potentially exempt individuals. Examine existing PTO policies to determine whether they meet or exceed paid sick leave requirements under the new law. Update policies and handbooks to provide for accrual, use payout, etc. integrate the 80-hour accrual threshold into payroll systems, and prepare for required notices and poster deployment.