- New statewide paid sick time law would take effect on October1, 2025.
- Law would allow employers to limit annual accrual and use to either 40 or 56 hours, but is silent on carryover caps.
- Notice obligations would begin before law takes effect.
In the November 5, 2024 election, Nebraskans appear to have overwhelmingly voted in favor of Initiative Measure 436 to create a new statewide paid sick time law that would become operative on October 1, 2025. Although the results will not be certified by the Nebraska Secretary of State until early December, given the almost 75% majority vote reported with all precincts reporting, below we highlight what we know employers should know about the anticipated law.
Covered Employers & Employees. The law will apply to all employers, though different standards will apply to those with 19 or fewer employees in 20 or more calendar weeks in the current or preceding year (“small employer”). It appears that the “small employer” definition is based on the number of employees anywhere, not just in Nebraska. For an employee to be eligible, that individual must work in Nebraska for at least 80 hours in a calendar year. However, the law does not apply to employees subject to the federal Railroad Unemployment Insurance Act.
Although there is no exemption for employees covered by a collective bargaining agreement (CBA), or the option for such employees to waive the law’s requirements, the law expressly allows employer signatories to a multiemployer CBA to comply with the law via contributions to a fund, plan, or program under which employees can collect payment when they have a qualifying need for leave.
Covered Uses & Family Members. Under the law, employees can use leave for themselves or to care for or assist a family member – generally defined as a child, parent, grandchild, grandparent, sibling, spouse, or any other individual related by blood to the employee or whose close association with the employee is the equivalent of a family relationship – for the following “sick” and “other” reasons:
- Mental or physical illness, injury, or health condition;
- Medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition;
- Preventive medical care;
- In the case of a child, attending a meeting necessitated by their mental or physical illness, injury, or health condition, at a school or place where the child is receiving care;
- Closure of employee's place of business by order of a public official due to a public health emergency;
- Care for a child whose school or place of care has been closed by order of a public official due to a public health emergency; and
- Health authorities having jurisdiction or a health care professional determining that the employee’s or family member’s presence in the community may jeopardize other’s health because of exposure to a communicable disease, whether or not the individual has actually contracted the communicable disease.
Notably, the law does not allow employees to use leave for “safe” time reasons connected to, for example, domestic violence, sexual assault, stalking, etc.
The law does not allow employers to impose a waiting period before employees can use paid sick time; once an employee accrues leave, they can use it. Employees can use leave in the smaller of hourly increments or the smallest increment that the employer's payroll system uses to account for absences or use of other time.
Accrual, Carryover & Use Caps and Frontloading. Employers with a paid leave policy, such as a PTO policy, who make available an amount of paid leave sufficient to meet the law’s requirements that employees may use for the same purposes and under the same conditions as the law requires need not provide additional paid sick time.
Otherwise, when employment begins or on October 1, 2025 – whichever is later – employees must accrue one hour of paid sick time for every 30 hours worked. The law assumes that overtime-exempt executive, administrative, professional, and outside sales employees work a 40-hour-per-week schedule, but if their typical workweek involves fewer than 40 hours they accrue leave according to their normal schedule.
The law allows small employers to cap annual accrual at 40 hours, and other employers can cap annual accrual at 56 hours. The law mandates that all unused leave carry over from year to year (with no designated carryover cap). Similarly, the law is silent concerning whether, and in what amount, employers can cap overall accrual. However, the law does allows small employers to limit annual use to 40 hours, and other employers can limit annual use to 56 hours.
The law does not expressly allow employers to frontload a specific number of paid sick leave hours annually in order to avoid carryover requirements. As written, the only way to avoid carryover is to cash out unused leave at year-end, and then at the beginning of the next year provide the employee at least 40 or 56 hours of paid sick time (depending on an employer’s size).
Requesting & Documenting Leave. An employer that requires notice of the need to use paid sick time must provide a written policy that contains reasonable procedures for employees to provide notice. If employers do not provide employees a copy of the policy, they cannot deny leave use due to noncompliance with the policy.
Generally, the law requires employers to allow paid sick time use upon an employee’s oral request, which, if possible, must include the absence’s expected duration. The law, however, is silent on the amount of notice an employee must provide for foreseeable and unforeseeable absences.
If employees use paid sick time on four or more consecutive workdays, an employer may require that the employee provide “reasonable” documentation to substantiate the need for leave, which includes documentation signed by a health care professional indicating that leave is or was necessary. However, if the employee or family member did not receive services from a health care professional, or if documentation cannot be obtained in reasonable time or without added expense, the employee can provide a written statement indicating that they are taking or took paid sick time for a covered reason.
Under the law, employers cannot require disclosure of the details of an employee's or family member’s health information as a condition of providing paid sick time. Additionally, any health information they receive must be kept on a separate form and in a separate file from other personnel information, treated as confidential medical records, and not disclosed except to the affected employee or with their express permission.
Rate of Pay. When employees use sick time, they must be paid their same hourly rate, with the same benefits – including health care benefits – that the employee typical earns, which cannot be less than the state minimum wage. Otherwise, the law is silent concerning how to calculate the rate of pay for specific employees – e.g., exempt employees, employees paid via commissions, employees with multiple jobs – and does not address when employees must be paid for sick time they use.
Transferred, Terminated & Rehired Employees. When employees transfer to a separate division, entity, or location of the employer, they retain all paid sick time accrued and can use it in accordance with the law. Although the law is silent concerning what happens to unused paid sick time when employment ends, it presumably does not need to be paid out, given the law expressly requires unused paid sick time to be reinstated when an employee is rehired within 12 months of separation.
Employer Notice, Posting & Recordkeeping. When employment begins or by September 15, 2025 – whichever is later – employers must give employees written notice of the following:
- Beginning October 1, 2025, employees are entitled to paid sick time;
- The amount of paid sick time;
- The terms of its use guaranteed under the law;
- Retaliation against employees who request or use paid sick time is prohibited;
- Each employee has the right to file a suit or complaint if statutory paid sick time is denied or the employee is subjected to retaliation for requesting or taking leave; and
- Contact information for the department where questions about rights and responsibilities under the law can be answered.
In an accessible place at each establishment, employers must conspicuously display a poster that contains the information required in the time-of-hiring notice. If an employer does not maintain a physical workplace or an employee teleworks or performs work through a web- or app-based platform, the employer must provide notice of such information via electronic communication or a conspicuous posting in the web- or app-based platform.
The notice and poster must be provided in English and any language that is the first language spoken by at least five percent of the employer’s workforce if the state labor department has provided a model notice and poster in such language.
Additionally, the following information must be recorded in, or on an attachment to, the employee's regular paycheck:
- Paid sick time available to the employee;
- Paid sick time taken by the employee to date in the year; and
- Amount of pay the employee has received as paid sick time.
Significantly, the law does not contain a method for electronic compliance with this requirement (e.g., an electronic timekeeping or HR system where employees can access this information).
The law is otherwise silent on records an employer must retain, and for how long they must keep them.
Prohibitions, Penalties & Damages. Under the law, employers cannot require, as a condition of taking paid sick time, that employees search for or find a replacement worker to cover the hours during which they use leave. An employer or any other person cannot interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right protected under the law. An absence control policy cannot count statutory paid sick time as an absence that may lead to or result in a retaliatory personnel action or any other adverse action. An employer cannot retaliate against an employee or former employee because they exercised or attempted to exercise rights protected under the law. Finally, employers and employees cannot waive the law’s rights and remedies; any such waiver is void and unenforceable.
Employees can either file a complaint with the Nebraska Department of Labor or a private lawsuit. If they pursue the latter, it must be filed within four calendar years after the violation occurred and, if they prevail, employees can obtain appropriate legal or equitable relief, along with reasonable attorney’s fees and costs.
Next Steps. Though relatively straightforward as far as paid sick and safe time laws go, the ballot measure does not spill much ink concerning numerous issues that employers often need to consider when developing paid leave policies and practices to meet their statutory obligations (particularly if they must navigate the corn maze of paid leave laws across the country). Accordingly, it will be up to the Nebraska Department of Labor to hopefully fill these gaps via formal rulemaking or informal FAQs in approximately the next 11 months. Employers should monitor the department’s website and keep in contact with knowledgeable counsel to ensure they have not missed any relevant updates.
