The Nebraska Healthy Families and Workplaces Act (the “Act”), previously discussed in our alerts on Nebraska's state-mandated paid sick time and the Legislature’s proposed clarifications to medical marijuana and paid sick leave, has recently undergone changes. On May 28, 2025, the Nebraska Legislature passed LB 415 to amend the paid sick time requirements taking effect on October 1, 2025. This alert revisits key components of the law and provides timely updates on recent amendments, guidance, and compliance steps businesses should be prepared to take by September 15, 2025.
Recap: The Act’s Requirements
The Act covers private and public employers with 11 or more employees working at least 80 hours in Nebraska annually. Exempt from the Act are owner-operators, independent contractors, seasonal agricultural workers, Railroad Unemployment Insurance Act employees, and those under 16. All other employees—full-time, part-time, temporary, seasonal, PRN, student, or substitutes—start accruing paid sick time after 80 consecutive hours worked.
Employees earn one hour of paid sick time for every 30 hours worked. Employers with 11-19 employees must allow accrual of at least 40 hours per year; those with 20 or more employees must allow accrual of at least 56 hours per year. Alternatively, employers can grant the full 40 or 56 hours at the start of each benefit year, which is defined at the company’s discretion (i.e., on an anniversary date, calendar year, or other annual basis established by the company’s policies).
Carryover rules depend on whether an employer utilizes a separate sick time bank or a combined PTO policy. When sick time is managed separately from vacation under a policy created specifically for covered illness, any unused paid sick time must carry over annually, with no limit on the total amount that can be accumulated. Unused sick time does not need to be paid out at separation unless the employer has expressly committed to such a practice.
When vacation and sick time are merged into a single PTO bank under a combined PTO policy, carry over is still required; however, an employer may implement an accrual cap so that employees do not accrue an unlimited amount of PTO. Nebraska’s Wage Payment and Collection Act requires payment of all accrued, unused PTO upon separation.
Employers are not required to permit employees to use more than 40 or 56 paid sick time hours in a calendar year, depending on employer size, regardless of the amount of hours carried over year to year.
The Nebraska Department of Labor confirms that any employer—whether using a separate sick bank or a PTO bank—may cash out unused sick time at year-end and restart the accrual or front-loading cycle on January 1 (or the designated benefit year), as long as employees receive the statutory minimum of 40 or 56 hours for the new year.
Paid sick time may be used for the employee’s or a qualifying family member’s mental or physical illness, injury, preventive care, diagnosis, or treatment; for certain school-related absences tied to a child’s health condition (e.g., lice outbreak, IEP meetings); and for specific public-health-emergency closures or quarantine orders. The definition of “family member” is intentionally broad and includes domestic partners and any individual whose close association is the equivalent of a family relationship. The Act does not currently extend to “safe leave” for victims of domestic violence, stalking, or abuse unless the absence independently qualifies under the medical criteria above.
Employers may require reasonable documentation (e.g., a note from a health-care provider or, if unavailable, the employee’s written statement) only after three consecutive workdays of absence. Employees cannot be required to find a replacement as a condition of using paid sick time, and absences protected by the Act cannot trigger disciplinary points under absence-control policies.
Employers must give each employee a written notice of rights by September 15, 2025 (or at hiring). A workplace poster with this information must be displayed; electronic posting is acceptable for remote or app-based workers. Each pay period, employers are required to inform employees how much paid sick time is available, used, and paid out—online portals can fulfill this requirement.
Every regular pay period, employers must inform employees of (i) available paid sick time, (ii) sick time used, and (iii) wages paid as sick time. Online portals that employees can access satisfy this obligation. Employers must retain records that show information sufficient to demonstrate statutory compliance. NDOL has authority to inspect these records in connection with a charge of non-compliance.
Overview of LB 415 Changes
The Act largely remains the same, but certain provisions have been clarified and modified. Here are the key changes employers should be aware of:
Covered employers: The Act applies to employers with 11 or more employees.
Accrual: Employees begin accruing paid sick time after 80 hours of consecutive employment.
Exemptions: Individual owner-operators, independent contractors, individuals who work in Nebraska for fewer than 80 hours in a calendar year, individuals who are employed in agricultural employment of a seasonal or other temporary nature, employees who are subject to the Railroad Unemployment Insurance Act, and individuals under the age of 16 are exempt from the Act and therefore are not required to be provided paid sick time.
Credit for paid sick time already provided: Paid sick time provided to an employee on or after January 1, 2025, and before October 1, 2025, can be counted toward an employer’s obligations under the Nebraska Healthy Families and Workplaces Act for calendar year 2025.
Payout on termination: Employers are not required to pay out unused paid sick time upon termination. However, if an employee is rehired within twelve 12 months, any unused paid sick time that was not paid out must be reinstated.
Existing policies: Any employer with a paid sick time policy, such as a paid time off policy, who makes available an amount of paid sick time sufficient to meet the requirements of the Act that may be used for the same purposes and under the same conditions as paid sick time under the Act is not required to provide additional paid sick time.
Compensation rate: Paid sick time is compensated at the employee’s regular rate of pay at the time it is used or paid out. For employees paid on a commission, mileage, piece-rate, or fee-for-service basis, paid sick time means time that is compensated at an hourly rate determined by the employer using the average weekly rate calculation under Neb. Rev. Stat. § 48-126, which shall then be reduced to an hourly rate based on a forty-hour workweek.
What These Changes Mean for Employers
Employers will be able to better determine which employees, if any, are entitled to paid sick time under the Act. Employers should evaluate current paid sick time policies to ensure compliance with the Act or determine if policy modifications are required. Additionally, managers, Human Resources staff, and payroll personnel should receive training on the Act’s requirements and any potential policy changes. Employers not currently in compliance will need to adjust their policies before the Act’s effective date.
Action Items
- Audit existing sick time policies—determine whether to maintain separate sick/vacation banks or a combined PTO structure.
- Decide on accrual versus front-loading strategies and whether year-end cash-outs will be used.
- Update employee handbooks and payroll systems to reflect (i) accrual rules, (ii) carryover or payout mechanics, (iii) notice procedures, and (iv) pay-stub disclosures.
- Train managers and schedulers on the prohibition against retaliatory attendance actions and the three-day documentation rule.
- Post NDOL’s model notice and poster by September 15, 2025.
- Coordinate with third-party payroll providers to ensure statements of available paid sick time are included on or with each paycheck.
Koley Jessen will continue to monitor developments related to Nebraska’s new paid sick time law. We encourage you to contact our employment and labor attorneys with any questions about compliance or implementation under the Act. For additional guidance, explore our Comprehensive FAQ on Nebraska’s Paid Sick Time Law, which answers common employer questions.
* Special thanks to Summer Associate Eric Losing for his contributions to this article.
This content is made available for educational purposes only and to give you general information and a general understanding of the law, not to provide specific legal advice. By using this content, you understand there is no attorney-client relationship between you and the publisher. The content should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
