Nebraska

Buying workers’ compensation for:

Nebraska

State Fund: No

Insurance Coverage Requirements: Workers’ Compensation is compulsory in Nebraska, waivers are not permitted.

Who is Required to Purchase Workers’ Compensation Coverage?

The Nebraska Workers’ Compensation Act applies to the State of Nebraska, to every governmental agency created by it, and to every employer in the state employing one or more employees in the regular trade, business, profession, or vocation of the employer. Thus, virtually all employees are covered by the workers’ compensation law including employees of private industry, state and local government, part-time employees, minors, and employees of charitable organizations.

There are a few exceptions:

(1) Federal employees, railroad employees, most volunteers, and independent contractors are not covered under the Nebraska Workers’ Compensation Act.

(2) Household domestic servants and some employees of agricultural operations are covered under the Nebraska Workers’ Compensation Act only if the employer elects to provide worker’s compensation insurance for them.

Effective August 31, 2003, employers engaged in an agricultural operation are exempt from providing workers’ compensation insurance coverage if they employ only related employees. Agricultural employers who employ unrelated employees are also exempt unless in a calendar year they employ 10 or more unrelated, full-time employees, on each working day for 13 calendar weeks (consecutive or not). The act applies to an employer 30 days after the 13th week. An employer exempt from the act may elect to provide workers’ compensation coverage for its employees. Every exempt employer who does not elect to provide workers’ compensation insurance coverage must give all unrelated employees written notice at the time of hiring that they will not be covered by the act, that they will not be compensated under the act if they are injured on the job or suffer an occupational disease, and that they should plan accordingly. Failure to provide this notice subjects an employer to liability under the act for all unrelated employees.

(3) Self-employed individuals, sole proprietors, partners, and limited liability company members who are actually engaged in the business on a substantially full-time basis may elect to be covered under the Nebraska Workers’ Compensation Act. To elect coverage such a person must file a written election with the insurer from whom workers’ compensation insurance coverage is obtained.

(4) Executive officers of Nebraska corporations who own 25 percent or more of the corporation’s common stock are not considered employees of the corporation under the Nebraska Workers’ Compensation Act unless they elect to be covered. To elect coverage, a corporate officer must file such election in writing with the workers’ compensation insurer and the corporate secretary (not with the court).

(5) Executive officers of Nebraska nonprofit corporations who receive annual compensation of $1,000.00 or less from the corporation are not considered employees of the corporation under the Nebraska Workers’ Compensation Act unless they elect to be covered. To elect coverage such officers must file a written election with the workers’ compensation insurer and the corporate secretary (not with the court).

Factors that Impact Coverage

  • You are a sole proprietor, partner or member of an LLC: In Nebraska, you are excluded from coverage but have the option to include yourself if actively involved in the business on a full-time basis.
  • You are a corporate officer: You are included but have the option to exempt yourself if you own 25% or more stock.

Failure to Secure Compensation

Any one or more of the following penalties may be applied: for not maintaining current workers’ compensation coverage as required by law:

  1. a civil fine not to exceed $1,000.00 for each violation. Each day of continued failure to secure coverage constitutes a separate violation.
  2. imprisonment for not more than one year, a $1,000.00 fine, or both.
  3. enjoinder from doing business in Nebraska until compliance is secured.

Also, an injured employee may sue the employer for damages in district court, and the employer will lose its common law defenses.

Proof of Coverage is Required

The only posting notice required by the Nebraska Workers’ Compensation Act is for employers of certain agricultural operations. An agricultural operation no longer subject to the Nebraska Workers’ Compensation Act (or an agricultural operation that has previously voluntarily chosen to provide workers’ compensation insurance coverage for its employees) may elect to return to exempt status by posting a written or printed notice. Such notice is not provided by the Nebraska Workers’ Compensation Court. The notice must state that the employer will no longer carry workers’ compensation insurance for the employees and the date coverage will end. This notice must be posted continuously in a conspicuous place at all employment locations of the employees for at least 90 days. After the 90 day posting period has passed, the employer may then cancel the workers’ compensation policy. Failure to provide this notice voids an employer’s attempt to return to exempt status.

In addition to the notice requirements for terminating coverage, every employer who is exempt under the Act and does not voluntarily elect to provide workers’ compensation insurance coverage must give all employees the following written notice at the time of hiring:

In this employment you will not be covered by the Nebraska Workers’ Compensation Act and you will not be compensated under the act if you are injured on the job or suffer an occupational disease. You should plan accordingly. Failure to provide this notice subjects an employer to liability and inclusion in the Act for all unrelated employees.

Independent Contractors

Mistakenly classifying an employee as an independent contractor can result in significant fines and penalties.

View 20 factors used by the IRS and our independent contractor questionnaire to determine whether you have enough control over a worker to be an employer.

Other Tips

If your insured employs workers in multiple states or your insured’s employees are temporarily working out-of-state, they need to purchase insurance for all the states where their workers are located, according to each state’s laws. Call 1-800-476-2948 and let us walk you through it.

The nature of your insured’s business, number of employees being covered and past coverage and claims are all factors in how much their premium will cost.