Complete Guide to Nebraska Minimum Wage Laws [Updated]

Knowing exactly what to pay your employees isn't just about crunching numbers—it's about staying compliant with labor laws and providing equitable wages. Nebraska’s minimum wage laws have been steadily evolving, and employers have clear responsibilities to meet the state’s requirements. Upcoming changes through 2026 will impact payroll calculations and business planning for all industries.

Nebraska Revised Statute 48-1203 outlines the legal framework for minimum wage increases, including specific rates for tipped workers and allowances for student learners in vocational programs. Employers need to apply these rates accurately to avoid penalties and ensure workers are fairly compensated.

The scheduled transition to a $15.00 hourly minimum wage by 2026 marks a significant shift for Nebraska businesses. Employers must prepare for these updates and understand how ongoing cost-of-living adjustments will shape payroll obligations in the years ahead.

Nebraska Minimum Wage Requirements

The minimum wage in Nebraska is $13.50 per hour as of January 1, 2025, under Nebraska Revised Statute 48-1203. Employers must pay all non-exempt employees at least $13.50 per hour, with additional rules for tipped workers. Tipped employees, such as waitstaff, earn a base rate of $2.13 per hour, and their total earnings—including gratuities—must equal or exceed $13.50 per hour for every hour worked.

Nebraska has been implementing scheduled increases to its minimum wage since 2023. The rate climbed to $10.50 per hour in 2023, increased to $12.00 per hour in 2024, and will rise to $15.00 per hour on January 1, 2026. Each step in the schedule gives employers time to adjust payroll systems and budgets accordingly.

Starting January 1, 2027, the state’s minimum wage will increase annually based on the Consumer Price Index for All Urban Consumers (CPI-U) for the Midwest Region. The Nebraska Department of Labor will calculate and publish the updated rate each October, rounding amounts to the nearest five cents to simplify payroll implementations.

Nebraska Wage Rates for 2025

Nebraska's minimum wage increased to $13.50 per hour on January 1, 2025, and will remain at this rate through December 31, 2025. Employers must apply this rate to all non-exempt employees, ensuring payroll aligns with the updated figure. For tipped employees, the base pay remains $2.13 per hour, but the total of base pay and earned tips must equal or exceed $13.50 per hour for all hours worked.

Cost-of-living adjustments (COLAs) are scheduled to begin in 2027. These adjustments will modify the $15.00 hourly rate established in 2026, based on the CPI-U for the Midwest Region. The Nebraska Department of Labor will announce each new rate by October 15, giving employers time to implement changes by January 1. COLAs aim to align wages with inflation, requiring businesses to monitor annual adjustments closely.

Preparing Payroll Systems

Medium-sized businesses must act now to ensure payroll systems reflect current and future rates. Waiting until the last minute can lead to errors that result in non-compliance. Employers should focus on the following:

• Update Payroll Software: Review payroll systems to confirm they handle hourly rate changes accurately. Test calculations for both hourly and tipped employees.

• Train Payroll Staff: Educate payroll and HR teams about the $13.50 rate and the tipped earnings threshold. Ensure teams understand upcoming COLA adjustments.

• Communicate Changes Clearly: Inform employees about the updated wage. Transparency builds trust and reduces confusion during payroll processing.

Taking these steps early minimizes the risk of miscalculations or compliance issues. Staying ahead of wage changes ensures smoother operations for employers and fair compensation for employees.

Tipped Employee Pay

Nebraska employers must closely monitor compensation for tipped employees to ensure compliance with state minimum wage laws. Workers like servers and bartenders are paid a base cash wage of $2.13 per hour, but their combined earnings—including tips—must equal or exceed $13.50 per hour in 2025. It's the employer's responsibility to make up the difference if tips fall short.

To stay compliant, employers need precise tracking and documentation of tips. Employees should report their tips daily, either using a standardized paper form or through a digital system. Employers must review these records regularly to identify gaps where the total earnings might not meet the required minimum. If gaps exist, employers must act immediately by supplementing wages during the same pay period.

Employer Responsibilities

Ensuring compliance means taking specific steps. Employers should:

• Require daily tip reporting: Have employees log tips consistently to maintain accurate records.

• Audit tip logs routinely: Review reports to confirm that base pay and tips meet the minimum wage threshold.

• Adjust wages without delay: Supplement employee pay in the same pay period if tips aren't enough to meet $13.50 per hour.

Neglecting these responsibilities can lead to financial and legal consequences.

Consequences of Non-Compliance

Failure to meet the requirements for tipped employee pay can result in back pay obligations, fines, and potential legal action. Employers may also face reputational damage, which can hurt employee trust and retention. Accurate tracking, proactive audits, and timely payroll adjustments are key to avoiding these penalties.

Special Categories and Exemptions

Not every worker in Nebraska qualifies for the standard minimum wage rates. Specific roles and age groups fall under unique provisions, allowing employers to pay adjusted wages under certain conditions. Knowing where these exceptions apply is key to staying compliant and avoiding payroll errors.

Industry and Worker Exclusions

Some employees, such as agricultural workers in specific roles, may not be covered under Nebraska's minimum wage laws. For example, seasonal farm laborers or family members employed by family-owned businesses often fall into these exemptions. Independent contractors and casual babysitters also aren't subject to the same wage requirements. Employers must carefully review job classifications to ensure workers are categorized correctly. Misclassifying employees as exempt when they aren't can result in fines or back pay obligations.

Student-Learner Rate

Workers enrolled in vocational training programs can be paid 75% of the Nebraska minimum wage. This reduced rate applies only to student-learners who are gaining hands-on experience as part of an organized training program. Employers must provide supervision and safety training and ensure that the work performed supports skill development rather than replacing regular employees' duties.

To qualify for the reduced rate, an agreement must outline the scope of the training, including the schedule, tasks, and oversight. Employers should keep these agreements on file and document the student's progress throughout their employment. Meeting these conditions ensures compliance and protects against disputes.

Youth Wage for Workers Under 20

Employees under the age of 20 can be paid a lower introductory wage during their first 90 days of employment. After this period, employers must pay the standard minimum wage. Employers should track the 90-day timeframe carefully and adjust pay rates immediately once it ends. Terminating a worker to avoid paying the higher rate is prohibited and could lead to penalties.

Employers need to understand each exemption's specific requirements and limitations. Payroll systems should reflect these adjustments accurately, and detailed records must be maintained in case of audits or disputes.

Overtime and Final Pay

Understanding Nebraska's overtime and final pay rules is key to maintaining compliance and avoiding wage disputes. Both areas are governed by clear regulations that require employers to act promptly and accurately when processing payroll. Staying informed and proactive ensures smooth operations and fair treatment for employees.

Overtime Requirements

Nebraska defers to the Fair Labor Standards Act (FLSA) for overtime pay. Non-exempt employees must receive one and a half times their regular hourly rate for hours worked beyond 40 in a single workweek.

Employers must ensure:

• Defined Workweek: A defined workweek spans seven consecutive 24-hour periods (168 hours). Apply the same workweek consistently to all employees.

• Accurate Calculations: Include non-discretionary bonuses, shift differentials, and incentive pay when calculating the regular hourly rate for overtime.

• Proper Classifications: Verify whether roles qualify as exempt under FLSA standards. Misclassification can lead to penalties and back pay.

Regular audits of payroll records and timesheets can help prevent errors in overtime payments. Employers should also confirm that payroll systems account for all qualifying earnings when determining overtime rates.

Final Paycheck Rules

Nebraska law mandates specific timelines for issuing final paychecks. Employers must pay all earned wages by the next regular payday or within two weeks of an employee's separation, whichever comes first.

Key requirements include:

• Timely Payments: Meet deadlines regardless of whether the separation was voluntary or involuntary.

• Vacation Payouts: Pay out all unused, earned vacation balances. State law prohibits forfeiture of accrued vacation in final pay.

• No Withholding for Property: Employers cannot delay payment or deduct wages for unreturned items like uniforms or equipment unless there is written authorization. Even then, deductions cannot reduce wages below the minimum wage.

Issuing final paychecks on time and in full demonstrates professionalism and avoids potential penalties or employee claims.

Frequently Asked Questions

Understanding Nebraska's state minimum wage laws means staying informed about specific exemptions, rate changes, and employer obligations. Below are straightforward answers to common concerns, designed to help businesses remain compliant.

Who is exempt from minimum wage in Nebraska?

Certain roles and employment arrangements are not covered under Nebraska's minimum wage requirements.

• Agricultural roles: Seasonal farm laborers and family members working on a family-owned farm often fall outside the law's scope.

• Independent contractors: Contractors are not protected by minimum wage laws. Misclassifying employees as contractors can lead to penalties.

• Casual babysitters: Individuals offering babysitting services on an occasional basis are exempt.

Employers should carefully classify employees to avoid compliance issues and unexpected liabilities.

What is the Nebraska minimum wage in 2025?

Starting January 1, 2025, the minimum wage in Nebraska is $13.50 per hour and remains in effect until December 31, 2025. This rate applies to all non-exempt employees.

Employers should prepare for a higher rate of $15.00 per hour beginning in 2026, followed by annual cost-of-living adjustments starting in 2027. Planning payroll updates ahead of time reduces errors and ensures compliance with the scheduled increases.

Can an employer lower an hourly wage?

Employers in Nebraska can reduce an employee's hourly wage, but there are rules to follow. Employees must receive advance notice of the new rate before working hours under the adjusted pay. The reduced wage must still meet the state minimum wage requirements.

Clear communication and documentation are key. Employers should provide written notice, retain records, and ensure employees are fully informed of any changes to their pay rate.

What if employees earn tips?

For tipped employees, such as servers or bartenders, employers must calculate compensation carefully. Nebraska requires a base pay of $2.13 per hour, with the combined total of base pay and tips equaling at least $13.50 per hour in 2025.

Employers are responsible for:

• Collecting daily tip reports from employees.

• Reviewing tip logs to ensure total earnings meet the state minimum requirement.

• Adjusting pay immediately if tips fall short during a pay period.

Accurate records are non-negotiable. Employers must prove compliance with tip credit rules and ensure tipped employees receive fair compensation.

Navigating Nebraska's minimum wage laws requires attention to detail and a commitment to compliance. We understand the challenges businesses face in staying current with evolving regulations while managing day-to-day operations. If you're looking for a partner to simplify your HR processes and ensure accurate wage and hour tracking, book a demo with GoCo today and discover how our user-friendly platform can help you maintain compliance and focus on growing your business.