Nebraska Minimum Wage Changes Face Local Challenge via City Ordinances

On February 9, 2026, Governor Pillen signed Legislative Bill 258, amending Nebraska’s Wage and Hour Act. Introduced by Senators Jane Raybould and Dave Murman, the legislation was intended to provide employers with greater predictability when budgeting labor costs while also establishing specific wage provisions for younger workers.

Prior to LB 258, Nebraska’s minimum wage was scheduled to increase annually based on changes in the cost of living. Those increases were tied to the Consumer Price Index for Urban Consumers (CPI-U) for the Midwest Region. Under that system, the Nebraska Department of Labor calculated annual adjustments by comparing the CPI from August of one year to August of the following year. For example, if the CPI increased by 2.8% during that period, Nebraska’s minimum wage would increase by a corresponding percentage the following January. Additionally, Nebraska law did not provide a separate minimum wage for 14- and 15-year-old employees. Employers generally were required to pay those workers the same minimum wage applicable to other covered employees.

LB 258 changed both of those provisions. The law maintains Nebraska’s minimum wage at $15.00 per hour through the end of 2026 and establishes a new formula for future increases. Beginning January 1, 2027, the state’s minimum wage will increase by 1.75% annually rather than by changes in the CPI. The Nebraska Department of Labor will calculate and publish the adjusted rate each year.

LB 258 also created a new youth minimum wage. Beginning in July 2026, employers may pay a minimum wage of $13.50 per hour to non-emancipated employees who are 14 or 15 years old. That youth wage will remain at $13.50 until January 1, 2030, when it will increase to $13.70, with additional increases of 1.5% every five years thereafter.

In May 2026, the Lincoln City Council enacted Ordinance No. 21872, commonly referred to as the Lincoln Minimum Wage Ordinance. The ordinance sought to preserve a $15 minimum wage for all workers, including younger employees, and would have continued annual increases based on cost-of-living adjustments rather than the fixed 1.75% increase adopted under LB 258.

The Nebraska Attorney General subsequently filed suit in Lancaster County District Court, arguing that Lincoln lacked the authority to enact a minimum wage ordinance that conflicted with state law. According to the State, minimum wage regulation is a matter of statewide concern and therefore subject to legislative control.

On July 17, 2026, just one day before Lincoln’s ordinance was scheduled to take effect, Lancaster County District Judge Lori Maret entered a temporary injunction preventing enforcement of the ordinance while the case proceeds. Judge Maret did not rule on the ultimate merits of the dispute. Instead, the court concluded that the State had met the requirements for temporary injunctive relief and that enforcement of the ordinance should be halted pending further litigation. The court further indicated that minimum wage regulation is likely a matter of statewide concern and that the State could suffer irreparable harm if a municipal ordinance directly contradicted state law.

A similar ordinance was passed soon after by the Omaha City Council and is being litigated in Douglas County District Court.

The litigation raises an important question regarding the relationship between state and local government authority over minimum wage regulation. Across the country, states have taken differing approaches. Some states prohibit local governments from establishing minimum wage requirements that differ from state law, while others allow municipalities to adopt wage ordinances that provide greater protections than state law requires. For example, states such as California have permitted local governments to establish minimum wage rates that exceed the statewide minimum wage. In contrast, other states have adopted statutory frameworks that reserve minimum wage regulation primarily to the state legislature.

The Nebraska courts have not yet resolved whether Lincoln or Omaha’s ordinances are preempted by Nebraska law. The outcome of the litigations may provide important guidance regarding the scope of municipal authority when local ordinances conflict with statewide employment regulations.

For now, LB 258 remains in effect throughout Nebraska, including within Lincoln and Omaha. Employers should continue to monitor developments in the litigation, as a final decision could have significant implications for wage-and-hour compliance and for the balance of authority between Nebraska’s state and local governments.

Nebraska employers should also pay close attention to annual minimum wage adjustments published by the Nebraska Department of Labor and ensure that payroll practices comply with both current state law and any future court rulings that may affect local wage regulation. Employers with questions regarding Nebraska’s evolving wage-and-hour requirements should consult experienced employment counsel to assess their obligations and minimize compliance risks.