Understanding the Nebraska employee separation process is the key to ensuring compliance with local, state, and federal regulations. Because employer obligations and employee rights can vary quite a bit between states, it’s important to know state-specific requirements.
This employee separation checklist and guide is an overview of Nebraska’s final paycheck requirements, separation notices, severance agreements, reporting employee termination, and withdrawing registration to do business in the state.
Nebraska Employee Separation Checklist
- Provide final paycheck
- Issue separation notice
- Execute severance agreement
- Report termination
- Withdraw registration to do business
1. Final Paycheck Requirements in Nebraska
Nebraska law requires timely payment to employees who separate from their employer. Employees who are terminated or resign must receive their final paycheck by the next scheduled payday, or within two weeks, whichever comes first. Commissions owed to discharged employees are due on the next regular payday, following the employer’s receipt of payment from the customer.
Furthermore, all earned, unused vacation time must be paid upon separation. Although the law doesn’t specify the method of delivering final wages, it’s typically considered best practice to use the regular payment methods. Employers who fail to meet these obligations may face lawsuits for unpaid wages and associated legal costs—and repeat offenders can be fined up to $500.
2. Firing Employees in Nebraska
When firing employees in Nebraska, it’s important to comply with employee termination laws. Nebraska is an at-will employment state, which means that both employer and employee can terminate the relationship at any time, for any legal reason.
However, Nebraska has a notice requirement: organizations with fewer than 20 employees, who offer a group health insurance plan, must notify their separated employees of their right to continue coverage under the state’s COBRA law. This notice must be given within 10 days of separation. It should include information on the employee’s right to elect continued coverage and the form required to do so.
Employers are also obligated to include the amount of the monthly premium the employee must pay, as well as details on how, when, and to whom the election form and premium payments should be submitted.
3. Severance Agreements in Nebraska
If you’re planning to ask an employee to sign a severance agreement, you must clearly list the claims you’re asking them to release under federal and state law. Nebraska allows employees to release claims under the Nebraska Fair Employment Practices Act, Nebraska Age Discrimination in Employment Act, Nebraska Wage Payment and Collection Act, Nebraska Pregnant Workers Fairness Act, Nebraska’s minimum wage laws, and Nebraska’s leave laws. The agreement should only release claims arising prior to the agreement’s effective date.
Furthermore, employers must also remember to review applicable federal employee termination laws and guidelines. For example, the NLRB’s 2023 McLaren decision restricts the use of non-disparagement and confidentiality provisions in severance agreements.
4. Reporting Employee Termination in Nebraska
When you terminate an employee with an Income Withholding for Support Order (“IWO”), you should report the employee’s termination as soon as possible to the child support agency, court, or attorney that issued the IWO. To expedite the reporting, register for online reporting with the Federal Office of Child Support Enforcement here.
You may opt to report an employee’s termination by completing the Notification of Employment Termination or Income Status section of the IWO. Fax or mail it to the child support agency that issued it. You will need the following information:
- Employee Name
- Employee Case Identifier
- Last Known Home Address
- New Employer Address (if known)
- Date of Employee Separation
5. Withdraw Registration to do Business in Nebraska
When separating from your last Nebraska employee and ceasing business operations in the state, your organization may wish to withdraw its business registration. The type of form you’ll need to submit depends on your company’s legal structure. For-Profit Corporations and Non-Profit Corporations must file a Certificate of Withdrawal. Limited Liability Companies (LLCs) must file a Notice of Cancellation. Forms for each structure can be accessed via the Nebraska Secretary of State’s website.
Stay Compliant with Nebraska Employee Separation Requirements
Staying current with Nebraska Employee Separation Agreement rules helps employers ensure regulatory compliance, honor employee rights, and mitigate legal risks.
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