11/06/2024

Paid Sick Leave Passes in Nebraska: What Employers Need to Know Now

Just yesterday, Nebraska voters passed ballot initiative 436 regarding paid sick leave in Nebraska, mandating that most private employers in the state provide paid sick leave for their employees. As currently proposed, the Nebraska Healthy Families and Workplaces Act (NHFWA), takes effect on October 1, 2025, and while the law itself is clear in many respects, we are still awaiting final regulations from the Nebraska Department of Labor (NDOL) to clarify certain details. Below is an overview of what we know so far and steps you can take to prepare your business.

What does the Nebraska Healthy Families and Workplaces Act (NHFWA) require?

The NHFWA applies to businesses of varying sizes and employment types and broadly requires that eligible employees receive paid sick leave. Critical provisions include:

• Eligibility: The NHFWA applies to businesses with one (1) or more employees, covering full-time, part-time, and temporary employees who work in Nebraska for at least 80 hours in a calendar year.
• Exemptions: The NHFWA does NOT apply to the United States or the State of Nebraska or its agencies, departments, or political subdivisions.
• Accrual of Sick Leave: Employees accrue one hour of paid sick leave for every 30 hours worked up to a maximum of 40 hours per year if the employer has fewer than twenty (20) employees and a maximum of 56 hours per year if the employer has at least twenty (20) employees or if the employer had at least twenty (20) employees on its payroll in each of twenty or more calendar weeks in the current or preceding calendar year. Unused sick leave may be carried over to the following year, though employers may cap accruals at 40 or 56 hours depending on the number of employees the employer employs. Instead of allowing carryover, employers may pay out unused sick leave and provide leave available for the employee’s use at the beginning of the next year.
• Permitted Uses: Sick leave can be used for an employee’s own mental or physical health needs, including illness and medical appointments, and for the care of family members. Leave may also be used for the closures, by order of a public official, of the employee’s place of business or a child’s school or place of care.
• When Accrual Begins: Accrual of sick leave begins on October 1, 2025 (when the law goes into effect), or when the employee commences employment, whichever is later.
• Documentation: For absences longer than three (3) consecutive days, employers can request “reasonable documentation.” “Reasonable documentation includes (a) documentation signed by a health care professional indicating leave is or was necessary or (b) if the employee or family member did not receive services from a health care professional, or if documentation cannot be obtained from a health care professional in a reasonable time or without added expense, a written statement from the employee indicating that the employee is taking or took paid sick time for a qualifying purpose under the NHFWA.
• Providing Notice of Leave: An employer may require notice of the need to use sick leave, but it must be written as a policy and contain reasonable procedures for employees to provide notice. If no written notice policy is provided, leave must be provided upon the oral request of the employee.
• Recordkeeping: Employees will not be required to disclose the details of an employee’s or a family members health information as a condition of providing paid sick leave. Any health information provided to an employer will be (a) maintained on a separate form and in a separate file from other personal information; (b) be treated as confidential medical records; and (c) not be disclosed except to the affected employee or with the express permission of the affected employee.
• No Retaliation: The NHFWA purports to prohibit retaliation against an employee for exercising rights granted under the statute.
• Interaction with Existing Leave Policies and Federal Laws: The NHFWA will not prohibit employers from providing greater leave than what is required from the Act. In other words, the NHFWA is the minimum and will not interfere with collective bargaining agreements, contracts or existing employer policies that provide an equal or more generous benefit to employees.

Anticipated Guidance from the Nebraska Department of Labor

Again, we are still awaiting detailed guidance from NDOL regarding specific compliance requirements, which is expected to address areas such as:

• Detailed Accrual and Carryover Provisions: Additional clarification on how to calculate accruals, particularly for part-time or temporary employees, and additional guidance on carryover limitations.
• Employer Documentation and Recordkeeping Requirements: NDOL regulations are likely to detail what constitutes “reasonable documentation” and how to ensure privacy for employees while maintaining compliance.
• Interaction with Existing Leave Policies and Federal Laws: NDOL is also expected to clarify how NHFWA requirements interact with existing PTO and sick leave policies, the Family and Medical Leave Act (FMLA), and other federal laws.

McGrath North lawyers will continue to keep our clients informed when NDOL issues final regulations to ensure your business meets all compliance standards.

Steps Your Business Can Take Now

To prepare for the October 1, 2025, start date, here are steps to get ready for NHFWA compliance:

1. Review Current Sick Leave Policies: Compare your current sick leave offerings to the requirements of the NHFWA and be prepared to make adjustments once NDOL releases final regulations. Update employee handbooks to incorporate the new law.
2. Set Up Tracking for Accruals: Ensure your HR systems are capable of tracking leave accrual and carryover accurately, especially for hourly, part-time, and seasonal employees.
3. Train Supervisors and HR Staff: Educate your management and HR teams on the basics of NHFWA compliance and employee rights under the law. Further training may be required once NDOL provides additional details.
4. Communicate with Employees: Although details are still forthcoming, inform employees as required under the NHFWA about the new paid sick leave law no later than September 15, 2025, so they understand what to expect. The notice must be provided in English and any language that is the first language spoken by at least five percent of the employer's workforce. Early communication can help ease the transition.
5. Consult Legal Counsel: As always, we recommend reaching out to us to ensure compliance with both state and federal laws, particularly as NDOL releases additional guidance.

The Nebraska Paid Sick Leave Act is a significant change to workplace policy for Nebraska employers. While certain specifics remain to be clarified, acting now can help your business stay ahead of compliance requirements and reduce potential risks.

Our McGrath North Labor & Employment team is here to assist you in navigating this new law, updating your policies, providing notice to impacted employees and preparing for final NDOL guidance. Please reach out with any questions or if you need support as your business transitions to NHFWA compliance.