Nebraska Initiative 436 Mandates – Paid Sick Leave for Most Nebraskans

Under the Initiative, eligible employees will begin accruing paid sick leave on October 1, 2025. Because this is a voter initiative, we expect further guidance from the Nebraska Department of Labor (“DOL”), which is responsible for implementing and enforcing the Act. The Department may adopt and promulgate rules and regulations as necessary to carry out the Act, which we assume it will do.

Which Businesses are Covered?

All Nebraska private employers, regardless of size, are obligated to provide paid sick leave under the Initiative. Federal or state agencies, as well as political subdivisions are not required to provide paid sick leave. There are no exemptions for agricultural employers. The law applies regardless of whether the employer is a corporation, limited liability company, partnership, or sole proprietorship. An employee is not covered if they work less than eighty (80) hours in Nebraska in a calendar year or are a railroad employee.

How Much Sick Leave is Required?

The amount of paid sick leave depends upon the number of employees a business employs during a given week, including full-time, part-time, or temporary employees. The Act defines an employer with fewer than twenty (20) employees as a “small business.” Small businesses must allow workers to earn up to forty (40) hours of paid sick leave annually. Employers with more than twenty (20) employees must allow employees to earn up to fifty-six (56) hours of paid sick leave per year. Sick leave is accrued at a rate of one (1) hour for each thirty (30) hours worked.

An employer may provide all sick pay to an employee that the employee is expected to accrue at the beginning of the year. Employees must be allowed to carry over unused paid sick leave to the following year, but an employer is not required to permit an employee to use more than the employee’s maximum yearly accrual of paid sick time (40 hours or 56 hours, depending on the size of the employer) per year. Alternatively, in lieu of carryover of unused paid sick time, the employer can pay cash to employees for accrued sick leave at the end of the year and provide the employee with the amount of sick leave (40 or 56 hours) and make it immediately available for the employee’s use beginning in the subsequent year. If an employee is separated, it does not appear that the accrued sick leave must be paid to the employee like vacation or PTO. If, however, the employee is rehired within twelve (12) months of separation, the amount of sick leave the employee had accrued is reinstated. Exempt employees are presumed to work forty (40) hours per workweek for sick leave accrual unless their typical workweek is less.

Employers who already have a paid leave policy such as a PTO policy which provides at least the same amount of time and allows it for the same reasons as set forth in the Act is not required to provide additional sick leave. Employers should be aware, however, that if they utilize a PTO policy to provide the paid sick leave required under the Act, they would be required to pay out accrued but unused PTO to employees at the time of separation. In addition, employers who utilize a PTO policy to provide paid sick leave must ensure the PTO policy allows employees accrue the requisite amounts of paid sick leave and carry over unused paid sick leave as required under the Act. The employer may not count time used for paid sick leave as an absence which might result in discipline.

What Can Employees Use Sick Leave For?

Almost anything! Paid sick leave can be used by employees for: employees’ mental or physical illness, injury, or health condition; an employees’ need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition, and/or preventative care. Leave is also allowed if the employee needs to isolate because of exposure to a communicable disease whether or not the employee or family member contracts the disease.

Leave can also be used for: “care of” a family member with a mental or physical illness, injury or health condition or a family member who needs medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition or a family member’s preventative medical care. The definition of “family member” is quite broad and does not depend on age or whether an employee is even the caretaker of the family member.

In the case of a family member that is a child, an employee can use paid sick leave to attend a meeting necessitated by the child’s mental or physical illness, injury or health condition at a school or place where the child is receiving care. An employee can use paid leave if a child’s school or daycare is closed due to a public health emergency such as Covid. “Care of” is not defined. For example, is babysitting a family member or visiting a grandparent with dementia, at an assisted living facility covered? We do not know yet. It would seem that as long as the family member has a physical or mental illness and is receiving medical treatment or care, leave is allowed.

What is the Process?

Paid sick leave is to be provided upon an employees’ verbal request. Where possible, that verbal request should include the expected duration of the absence. If an employer requires notice of the need to use paid sick leave, it must have promulgated a written policy which contains reasonable procedures for employees to provide notice and provide employees with a copy of such written policy. Otherwise, the employer cannot deny paid sick time to the employee based on non-compliance with such a policy. Employees cannot be required to find a replacement worker to cover the hours that they miss while using paid sick time.

Paid sick time is available to be used by the employee 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. If an employee is absent for more than three (3) consecutive workdays, the employer may require reasonable documentation that the paid sick time has been used for a legitimate purpose as described in the Act. This reasonable documentation shall include documentation signed by a healthcare professional indicating that the paid sick time is or was necessary. If the employee or family member did not receive the services of a healthcare professional or if the documentation cannot be obtained in 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 is sufficient to constitute reasonable documentation.

If an employer is a signatory to a “multi-employer collective-bargaining agreement,” the employer can fulfill its obligation by making contributions to the multi-employer paid sick time fund, plan, or program based on the hours each employee accrues pursuant to the Act.

What Else Do Employers Need to Know?

Employers must provide employees written notice of the following at the commencement of employment or by September 15, 2025, whichever is later:

• that employees are entitled to paid sick time beginning October 1, 2025;
• the amount of paid sick time;
• the terms of its use guaranteed under the Act;
• that employees will not be subject to retaliation for requesting or using paid sick time;
• that an employee has the right to file a suit or complaint if paid sick time as required by the Act is denied by the employer or the employee is subjected to retaliation for requesting or using paid sick time; and
• the contact information for where questions about rights and responsibilities under the Act can be answered

The notices must be in English and any language that is the first language spoken by at least five (5) percent of the employer’s workforce, if the department has provided a model notice in such language. A poster containing this information must also be displayed in a conspicuous and accessible place in each establishment where employees are employed (or, if the employer does not maintain a physical workplace or the employee teleworks, sent via electronic communication or a conspicuous posting in a web-based or app-based platform).

The employer also must provide individual employees with an attachment to their paychecks that contains the amount of paid sick time available to the employee, the amount of paid sick time taken by the employee to date in the year, and the amount of pay the employee has received as paid sick time.

What Happens If Employers Violate the Act?

The Commissioner of Labor can issue a citation to an employer with an administrative penalty which shall be not more than $500 in the case of the first violation and not more than $5,000 in the case of second or subsequent violation. There are procedures to challenge that citation. If the citation is unpaid, the employer shall be barred from contracting with the state or any political subdivision until the citation is paid. The citations and the names of employers who have been issued a citation are available to the public upon request.

An employee may file a lawsuit for legal and equitable relief in the appropriate court. If the employee establishes a claim and secures judgment on the claim, the employee will be entitled to the full amount of the judgment and all costs of such suit, including reasonable attorney’s fees. The employee shall have four (4) years after the cause of action accrues to file a lawsuit.

The employer cannot require disclosure of the detail of an employee’s or an employee’s family member’s health information as a condition of providing paid sick leave. Any health information possessed by the employer regarding the employee or the employee’s family members, must be maintained in a separate form and in a separate file from other personnel information and be treated as confidential medical records. It cannot be disclosed except to the affected employee or with the express permission of the affected employee.

What Do I Need to Do to Prepare?

• Draft a paid sick leave policy and procedure or review and revise your existing PTO policy to comply with the new paid sick leave requirements.
• Assess proactive strategies to ensure necessary coworker coverage on days when an employee unexpectedly uses paid sick leave.
• Determine how you will handle accrued carryover of sick leave.
• Devise a system to track and report accrued paid sick leave.
• Determine, with your payroll company, how the sick leave information will be provided to employees with their paychecks and especially with direct deposit.
• Update anti-retaliation provisions in your Employee Handbook or manual to reference the Act and extend to requests or use of paid sick leave.
• Draft a written notice to your employees containing notice required by the Act.
• Once a model poster is published by the DOL, display the poster in a conspicuous location.
• Audit your existing recordkeeping practices to ensure there is a procedure for confidentially maintaining an employee’s health information in a separate file from other personnel information, as required under the Act.

The attorneys in Fraser Stryker’s Labor and Employment group can certainly assist you in meeting your obligations under the Nebraska Healthy Families and Workplace Act.