On June 4, 2025, Nebraska enacted Legislative Bill 415 (LB 415), amending the state’s voter-approved Healthy Families and Workplaces Act (HFWA). Under the HFWA, employees must accrue paid sick leave at a rate of one (1) hour for every 30 hours worked up to a maximum of 40 or 56 hours annually based on employer size as follows:
- Employers with 11 to 19 covered employees must provide up to 40 hours of paid sick leave; and
- Employers with 20 or more covered employees must provide up to 56 hours.
Key Updates
Effective October 1, 2025, LB 415 introduces several employer-friendly revisions. These include narrowed employee eligibility, a delayed accrual start date and clarified enforcement procedures, including the following:
- Employees Excluded from Coverage. Under LB 415, the law now applies only to employers with 11 or more employees, effectively exempting smaller businesses from the mandate. In addition, specific worker categories are excluded, including employees under the age of 16, seasonal or temporary agricultural workers, independent contractors, and owner-operators. These changes significantly reduce the number of covered individuals, offering clarity for employers unsure about their obligations under the original statute. Notably, the original initiative already excluded employees covered by the federal Railroad Unemployment Insurance Act.
- Accrual Start Date. One of the most notable changes is the revised accrual threshold. Paid sick leave accrual will now begin only after an employee has worked 80 consecutive hours within the state, replacing the original day-one (1) accrual requirement.
- Sick Pay Calculations. LB 415 provides important guidance on calculating paid sick time for employees with non-traditional compensation structures. For individuals compensated on a commission, piece-rate, mileage, or fee-for-service basis, employers must determine an hourly sick pay rate using the average weekly wage calculation outlined in Nebraska’s workers’ compensation statute. This ensures consistency and fairness in providing paid sick leave to employees who do not earn a standard hourly wage.
- Existing Policies. Employers with existing paid leave policies that meet or exceed the HFWA’s provisions are not required to provide additional leave or allow carryover beyond what their policies already permit.
- Clarification on Payout at Separation of Employment. Importantly, the amendment clarifies that employers are not obligated to pay out unused sick leave upon an employee’s separation from the company.
- Enforcement. Enforcement of the HFWA has also shifted. LB 415 removes the private right of action, centralizing enforcement with the Nebraska Department of Labor (DOL). Administrative penalties for non-compliance range from $500 for a first violation to $5,000 for subsequent offenses, reinforcing the need for employers to understand and meet their obligations.
Next Steps for Employers
To ensure compliance with the October 1 effective date, employers should begin reviewing their current sick leave and paid time off policies. If existing policies already meet or exceed the new requirements, only limited adjustments may be necessary.
Covered employers must provide a written notice outlining the sick leave policy to current employees by September 15, 2025, and to all new hires at the start of employment. This notice must clearly explain how the policy aligns with applicable sick leave requirements, including rules on accrual, usage, and carryover. Model notices and posters are expected to be made available from the DOL ahead of the effective date.
Employers should also ensure their payroll and HRIS systems can accurately track employee eligibility based on the 80-hour threshold and record sick leave usage and balances appropriately.
Training human resource teams and frontline managers on the amended provisions will be critical to support consistent application and to address employee questions as they arise.
Although additional guidance is anticipated, employers are encouraged to begin preparing now. Prompt action will help ensure compliance and reduce the risk of enforcement penalties once the law takes effect in October.
