A Guide to Nebraska PEO Services

Navigating Nebraka’s labor and employment laws can be challenging for businesses aiming to scale and grow. A professional employer organization (PEO) lets you outsource HR and payroll tasks, enabling you to allocate more resources to expansion.

Keep reading to discover how a PEO partnership works and the impact it could have on your business operations.

The role of PEOs in Nebraska

PEO services manage functions like HR, payroll, and benefits administration on your company’s behalf. This frees up your team to focus on growing the business and high-level strategy.

While PEOs are often referred to as a service, it’s more of a partnership. The provider enters into a co-employment relationship with your company, making them jointly responsible for your workforce. However, you retain complete control over your staff and daily operations.

Nebraska regulates PEOs operating within the state. All providers must register under the PEO Registration Act and meet its terms to offer their services to client companies. The Nebraska Department of Labor (NDOL) keeps a list of all currently registered PEOs for employers to reference.

PEOs operating in Nebraska are liable for many aspects of HR and payroll compliance. For example, they’re required to administer state-mandated benefits such as workers’ compensation and unemployment insurance. NDOL assesses each provider’s financial stability during registration to ensure they can fulfill their commitments to clients.

Benefits of partnering with a Nebraska PEO

Outsourcing to a PEO helps streamline operations, mitigate risks, and improve worker satisfaction. Here’s a closer look at the benefits you can expect from the partnership:

Greater efficiency

A PEO can save you time and money, making your company more efficient. You can rely on their resources to run complex operations instead of investing funds into building out departments before your business is ready.

For example, PEOs have a team of professionals you can count on to handle all of your HR and payroll operations. This saves you from hiring additional staff for low-impact roles. PEO providers often cover multiple states, enabling you to easily expand into different regions.

Additionally, PEOs give you access to advanced HR and payroll technology. You can use this to automate time-consuming processes and gain deeper insights into your operational performance.

Access to expertise

Nebraska has intricate labor, payroll, and employment laws. Without the right expertise, you may find you keep missing opportunities or encountering unexpected obstacles.

Partnering with a PEO gives you instant access to specialist local knowledge and resources. You have a team of specialists on standby to help you navigate situations, ensuring you can always make the most informed decision.

Affordable employee benefits plans

PEOs enable you to offer more comprehensive benefits at a lower cost. They can pool their aggregate workforce to negotiate volume discounts, securing better rates for plans like health insurance and workers’ compensation.

Small to medium businesses can use PEOs to gain an edge in the market. As they can’t negotiate lucrative deals alone, they’ll find it harder to attract and retain top talent through their benefits plans. The PEO service can help them level the playing field and avoid losing workers to larger competitors.

Compliance

Outsourcing compliance can shield your business against significant risks while letting your team focus on core processes.

As your co-employer, the PEO is responsible for HR and tax compliance. They must identify and resolve potential issues and ensure you stay updated with all the relevant state regulations. This could spare your in-house team from hours of researching local laws and legal terminology.

With your PEO’s expert guidance, you can mitigate your work of violating laws and incurring penalties or legal action. As Nebraska publicly lists employers with citations against them, you can also protect your company against reputational harm.

Payroll, labor, and employment laws in Nebraska

Nebraska requires employers to follow a mix of federal and state laws. When you work with a PEO, they ensure your business complies with all of the relevant legislation.

Here’s an overview of the main payroll, labor, and employment laws in the state:

Payroll and benefits laws

• Minimum wage: Nebraska set the minimum wage at $13.50 per hour from January 1st, 2025. The state adjusts this limit every year and they intend to increase it to $15 per hour in 2026
• Tips: You can pay service workers $2.13 per hour provided the sum of their wages and tips doesn’t fall any lower than the minimum rate
• Pay rates: Employers may reduce the pay rate as long as they inform the worker ahead of time and meet the minimum wage requirements
• Overtime: Nebraska follows federal law concerning overtime, which mandates that employees receive 1.5 times their regular rate for any time worked over 40 hours in a single week
• Supplementary pay: If you pay variable compensation like bonuses and commissions separately from regular payroll, you must withhold a fixed tax rate of 5%
• Pay transparency: There are no pay transparency laws in Nebraska, but it’s becoming common practice to include the salary range in job adverts
• Payday frequency: Nebraska is one of the few states that doesn’t set a minimum payroll frequency. Provided you pay your workers regularly, you’re free to decide how often you process wages
• Paystubs: Employers in Nebraska must provide paystubs either on paper or electronically. Every paystub must include the pay period, hours worked, and wages accrued
• Final paychecks: Nebraska requires employers to pay the final paycheck within two weeks or by the next payday, whichever is sooner. You’re not permitted to withhold wages until employees have returned company property
• State income tax: You must remit income tax from employee wages. Nebraska has a tiered system based on each worker’s salary which ranges between 2.46% and 5.84%

Labor laws

• Meal and rest breaks: Certain workers in the manufacturing industry are entitled to a 30-minute break per eight-hour shift. Otherwise, it’s your choice whether to incorporate breaks into your company policy
• Pump breaks: Nursing parents are entitled to take breaks whenever necessary to express milk for their children. You must provide a private space other than a bathroom for them to do so
• Jury duty: You must pay workers their regular wages while they’re on jury duty minus the daily rate the court pays them
• Time off: Nebraska doesn’t require you to provide paid time off (PTO) to workers. If you include it in company policy, you must pay out all PTO at the end of the work year or upon termination of the contract
• Workers comp: All businesses must secure workers’ compensation for their employees in Nebraska. This insurance must cover injuries and illnesses that arise due to both sudden events and long-term exertion or exposure in the workplace
• Workplace safety: Employers in Nebraska are subject to the federal Occupational Safety and Health Administration (OSHA). The state has a voluntary service called the On-site Safety and Health Consultation Program, which offers businesses mock inspections and consults to help them meet OSHA standards
• Unions: Employees have the right to be represented by a union. As the employer, you may not pressure anyone to either participate in or refrain from joining union activities

Employment laws

• Worker classification: Nebraska has set the Employee Classification Act (ECA) to protect the rights of construction and delivery workers. However, there are no explicit criteria mentioned in their legislature. The state uses common law to determine whether there’s an employment relationship and contractors should have access to benefits
• Contractors: Freelancers must register with the government if they work somewhere other than their own premises. While this is their responsibility, you can avoid complications by ensuring all your on-site contractors have the right paperwork
• At-will employment: Nebraska is an at-will state meaning you can terminate employment at any time provided the reason is legal. Note that this same law gives your employees the freedom to resign without notice
• Discrimination and harassment: Employers mustn’t discriminate against or provide preferential treatment to workers based on factors like race, age, and disability. The state will investigate any businesses they believe to have violated these laws
• Paid family leave: Under the Family and Medical Leave Act (FMLA), new parents who have been in your employment for a year or longer can take up 12 weeks of paid leave. You can require them to take some of their existing PTO during that time
• Catastrophic leave: Employees can donate PTO to colleagues suffering from a serious illness or injury. The colleague in question must have used up all their existing leave first
• Family military leave: The immediate family members of those on military leave can request unpaid time off to visit them. They must’ve been in your employment for at least 12 months and the service must be for 179 consecutive days

Additional requirements and enforcement

Besides adhering to the laws above, employers in Nebraska are required to pay unemployment insurance (UI). This consists of quarterly contributions and any reimbursements your former employees claim.

Nebraska determines your UI tax rate based on what’s known as your experience factor. This system gives you a rating based on the ratio of wages you’ve paid to UI insurance claims against your business. If you lay off a lot of your workforce, you’ll have a higher score and therefore a higher UI rate.

UI rates range from 0% to 5.4% according to your score. New employers must pay a fixed rate of 1.25% unless they’re in the construction industry in which case it’s 5.4%.

The taxable wage rate also differs across categories. Low-scoring companies only have to pay tax on the first $9,000 of employee wages whereas high-scoring ones must pay it on the first $24,000.

If you partner with a PEO, the provider assumes responsibility for UI and administers taxes under their own account. You don’t have to handle tasks like keeping records or making contributions.

Sometimes, you may find Nebraska state law overlaps with federal statutes. Employers are generally required to comply with the regulations that afford workers the most rights or benefits.

Read our guide to Nebraska payroll for more details on UI and state taxes.

How to choose the right PEO in Nebraska

Nebraska’s complex laws call for a strategic approach toward selecting a PEO. Follow these seven steps to find a provider that can manage compliance while helping you achieve business goals.

1. Define your business needs

Assess your current HR operations to identify areas for improvement. Consider where the PEO could streamline processes or eliminate redundancies to make your business more efficient.

Which PEO services are you most likely to need? Specifically focus on your payroll, benefits administration, and risk management to see where you most require support.

As your needs are likely to change, think about how you could adapt the PEO services over time. For example, will you want to expand to other states? Or potentially reduce the service to payroll and benefits administration?

2. Research PEOs with Nebraska expertise

Start by checking your PEO is registered with NDOL. This shows you that the provider is legitimate and has the resources and capabilities to support your operations.

Narrow your search to PEOs with a strong presence and history of success within Nebraska. Case studies, testimonials, and reviews can tell you what to expect from their service.

3. Evaluate the range of services and quality of benefits

Research each PEO’s offerings to check they meet your organization’s needs. In particular, ensure their benefits packages are both comprehensive and affordable.

Additionally, assess the provider’s software through free demos and trials. See whether the tools will be intuitive for your team to learn and use and if you can tailor the features to your processes and practices.

4. Assess compliance and risk management capabilities

Ask the PEO how they stay updated on state and federal regulations and communicate these changes to client companies. Leading providers take a proactive approach to compliance management. For example, Deel has a compliance hub that notifies customers of regulatory updates that affect their business operations.

5. Check customer service and support

Ensure the PEO can respond to any issues and resolve them promptly. Consider factors like their availability, contact options, and average response times.

Check whether you’ll get a dedicated customer success manager assigned to your account. Having a single point of contact will spare you from explaining your situation to multiple people, meaning you can get to the heart of issues faster.

6. Review and negotiate the contract

Thoroughly read the PEO contract to check you understand all your rights and responsibilities. It’s best to get a legal professional to check everything is in your company’s interests and negotiate for more favorable terms if not.

Check the contract clarifies your and the provider’s responsibilities in every scenario. For example, how long does your company have to commit to the service? What process must you follow when leaving the PEO?

7. Plan for implementation and transition

Once you’ve entered negotiations with the PEO, start to prepare your team for the transition. Inform your employees about the upcoming changes and explain all the benefits.

A structured timeline can help you prevent delays. Agree on what you need to achieve by different dates with the PEO and ensure all tasks have been assigned. Leading providers like Deel can recommend the most effective ways to manage the transition, including which departments to involve and what information to give us.

See also: How to choose a US PEO

Manage your Nebraska, US, and global workers with Deel

Deel makes payroll and HR management easy, whether you’re hiring in one state, across the country, or internationally.

As your PEO*, Deel takes care of HR, payroll, and benefits administration while ensuring state tax compliance and handling sensitive issues by providing:

• Expert payroll administration
• Access to benefit plans from leading carriers and benefits administration
• Robust HRIS with free IT, Finance, and PTO management
• State-specific training, HR policies, and on-demand HR support
• Advanced tax and benefits compliance
• And more

Book a demo to learn more about using Deel’s PEO in Nebraska.

*Provided by Deel PEO US, LLC, Deel Employment Services, LLC, or through Deel's partnership with licensed providers where required.