PEO Services for Nebraska

PEO Guide for Nebraska: Payroll & Compliance

Navigating Nebraska’s employment laws and HR management can be challenging. A Professional Employer Organization (PEO) handles tasks like payroll, benefits, and compliance. This guide covers everything you need to know about using a PEO in Nebraska.

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Capital City

Lincoln

Timezone

CST

(

GMT-6

)

Paid Leave

Sick & Voting Leave

Income Tax

2.46% - 6.84%

Employer Tax

12.85%

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What is a PEO in Nebraska

A PEO in Nebraska serves as a co-employer, handling essential HR functions like payroll, benefits, and compliance while your business maintains control over operations and decision-making. This arrangement allows companies to focus on growth while reducing the administrative burden and legal risks associated with HR.

By partnering with a PEO in Nebraska, businesses can simplify HR, stay compliant with state regulations, and offer competitive employee benefits, all while focusing on growth. Whether you're a startup or an established company, a PEO helps you navigate Nebraska’s complex employment landscape.

Mandatory Requirements when Partnering with a PEO in Nebraska

In Nebraska, it’s mandatory for all employers, including those partnering with PEOs, to have valid workers’ compensation insurance. Failure to do so is a criminal offense with potential fines up to $100,000 USD as per Nebraska Labor Code, section 3700.

Benefits Of Using a PEO In Nebraska

Payroll Processing and Compliance. A PEO manages payroll processing, tax withholdings, and filings with Nebraska state agencies, ensuring compliance with state tax laws and employment regulations.

Benefits Administration. PEOs offer access to comprehensive employee benefits packages, including health insurance, retirement plans, and other perks that help attract and retain top talent in Nebraska.

Workers’ Compensation. PEOs ensure your business complies with Nebraska’s workers’ compensation requirements, handling claims and minimizing risk.

HR and Legal Compliance. PEOs bring expert HR support, making them especially valuable for small businesses. With constantly changing Nebraska labor laws, a PEO offers guidance on employee handbooks, harassment prevention, terminations, and safety regulations, ensuring your business stays compliant.

Employment Laws and regulations in Nebraska

A PEO (Professional Employer Organization) is an excellent solution for small businesses in Nebraska to manage HR, payroll, and compliance with the state's complex labor laws.

Nebraska has some of the most stringent regulations around minimum wage, overtime, paid sick leave, and employee classification, which can be overwhelming for small businesses without dedicated HR resources.

Here’s a brief overview of some key laws and regulations specific to Nebraska.

Nebraska Employment Laws

A PEO helps businesses comply with both federal and Nebraska-specific labor laws, which can be complex and frequently change.

  • At-Will Employment: Nebraska is an at-will employment state. This means employers or employees can terminate employment at any time for any reason, as long as no laws—like those against discrimination or retaliation—are violated.
  • Child Labor Restrictions: Minors aged 14-15 are limited to working no more than 8 hours a day or 48 hours per week and cannot work before 6 a.m. or after 10 p.m. Federal child labor laws may impose stricter regulations.
  • Equal Employment Opportunity: The Nebraska Fair Employment Practice Act prohibits discrimination based on race, color, religion, sex, disability, marital status, or national origin.

Payroll Laws In Nebraska

Nebraska’s minimum wage will increase to $13.50 per hour effective January 1, 2025. Employers must adhere to both federal and state payroll regulations, including timely wage payments and appropriate tax withholdings. The Nebraska Wage Payment and Collection Act also governs payments upon termination, ensuring employees receive any earned wages within the required timeframes.

Benefits Laws In Nebraska

Access competitive benefits like health insurance and retirement plans, often at a lower cost through a PEO. Leverage its pooled volume for enterprise rates—resold to PEO customers, with no employment minimums in Nebraska.

  • Paid Sick Leave: The Nebraska Healthy Families and Workplaces Act mandates paid sick leave for eligible employees starting October 1, 2025.
  • Family Military Leave: Employers with 15 to 50 employees must provide up to 15 days of unpaid leave for eligible employees, while those with more than 50 employees must offer up to 30 days.
  • Voting Leave: Employers must allow up to two hours of paid leave for employees to vote if they do not have sufficient time outside working hours.

Additional requirements and enforcement in Nebraska

Looking to hire employees in Nebraska?

Check out our comprehensive state hiring guide.

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    Understand employer tax implications and payroll requirements.

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    Review state specific employment laws and regulations.

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    Get insights on payroll, benefits, and employee classification.

How to Choose the right PEO in Nebraska

Selecting the right PEO in Nebraska is essential for navigating the state's intricate labor laws while ensuring compliance and efficiency. Follow these key steps:

  1. Focus on Nebraska-Specific Experience. Ensure the PEO has expertise in navigating Nebraska’s labor laws. This includes understanding nuances like mandatory sick leave, wage orders, and workers’ compensation requirements.
  2. Service Flexibility. Choose a PEO that offers flexible services tailored to your business size and industry. Nebraska’s regulations can vary by sector, so a PEO with industry-specific knowledge is valuable.
  3. Track Record and Compliance History. Research the PEO’s compliance history to ensure they have a proven track record of helping businesses avoid penalties and stay compliant with Nebraska’s complex employment laws.
  4. Consider Employee Benefits. A PEO can offer access to more affordable and comprehensive employee benefits, which are crucial for attracting and retaining top talent in Nebraska’s competitive job market.
  5. Assess Customer Service. Responsive customer service, dedicated human support teams (not AI), and robust HR technology are key factors in ensuring a smooth partnership with the PEO. It’s important to find a partner who supports your people, when they need it most.
By following these steps, you can select a PEO that aligns with your business goals and ensures compliance with Nebraska’s complex labor regulations. For more detailed insights, check out Playroll’s Guide to Employment in Nebraska.

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FAQS

FAQs About PEO Services in Nebraska

How does a PEO help with Nebraska labor law compliance?

A Professional Employer Organization (PEO) assists Nebraska businesses by managing complex employment-related regulations, ensuring compliance with state and federal laws, and minimizing the risk of non-compliance penalties.

Are PEOs regulated in Nebraska?

Yes, PEOs operating in Nebraska are subject to state regulations and must adhere to specific licensing and operational requirements to ensure compliance with employment laws.

Can a PEO help small businesses in Nebraska?

Absolutely, a PEO can provide small businesses in Nebraska with comprehensive HR services, access to competitive benefits, and assistance with regulatory compliance, enabling them to focus on core business operations.

Can a PEO help with compliance in Nebraska?

Yes, a PEO can help businesses maintain compliance with Nebraska's employment laws by managing payroll, benefits administration, and staying updated on legislative changes.

What happens if I want to terminate my relationship with a PEO in Nebraska?

Terminating a relationship with a PEO in Nebraska typically involves following the terms outlined in the service agreement, which may include notice periods and transition plans to ensure a smooth handover of responsibilities back to the business.

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