Understanding workers’ compensation regulations is important for Nebraska employers. But staying up-to-date on state law is not always easy.
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What you’ll learn
What you’ll learn
Key takeaways
- Covered Nebraska employers with one or more employees must carry workers’ compensation, though narrow exemptions apply to sole proprietors and small family farms
- Remote workers are covered if employment is localized in Nebraska, while independent contractors must clear a strict evaluation to verify their true classification
- Workplace injury disputes follow the state’s Rule 10 guidelines, which allow medical records and itemized bills into evidence without requiring live provider testimony
- Uninsured employers risk business shutdowns, civil fines up to $1,000 per day of noncompliance, and personal criminal liability for corporate officers
In this guide, we’ll cover important facts like what Nebraska businesses are required to purchase workers’ compensation insurance, what businesses are exempt, and what happens if an employee is injured on the job.
Workers’ compensation protects Nebraska employers and their employees
In Nebraska, workers’ compensation insurance shields employees from the repercussions of an on-the-job injury, providing medical care and wage replacement benefits until they’re able to return to work. On the flip side, workers’ compensation insurance also protects employers, eliminating the need to pay costly medical bills while preventing costly litigation that may result from an employee’s injury.
Now that we better understand how workers’ comp benefits employers and employees, let’s find out which companies must carry it.
Which Nebraska employers are required to have workers’ compensation insurance?
In Nebraska, nearly every employer with one (1) or more employees is required to provide workers’ compensation coverage to their employees. This includes businesses in the private sector, state and local government employers, businesses that employ part-time workers, employees who are minors, and those employed by charitable or nonprofit organizations. Agricultural companies that employ more than ten unrelated workers for at least 13 weeks in a year are also required to provide workers’ compensation insurance.
Are there any exceptions?
There are some exceptions to Nebraska’s workers’ compensation regulations. These exceptions include:
- Sole proprietors
- Partners and LLC members
- Executive officers that hold at least 25% of stock in the corporation
- Executive officers of nonprofits that earn $1,000 or less
- Railroad workers employed by companies that are engaged in interstate or foreign commerce
- Private residences that employ domestic workers
- Agricultural employers that employ less than 10 unrelated, full-time employees
- Volunteers
Any company that is exempt from purchasing workers’ compensation insurance has the option to purchase insurance voluntarily.
How much is workers’ comp insurance in Nebraska?
Workers’ compensation premiums in Nebraska depend on several factors, including the business’s industry risk, payroll size, employee job classifications, and claims history.
Premiums can vary widely by industry. For example, lower-risk jobs such as clerical or professional services typically have lower premiums, while higher-risk jobs like construction or roofing can cost more.
According to the National Academy of Social Insurance (NASI), the average employer cost for workers’ compensation in Nebraska is $0.95 per $100 of payroll. The exact premium for your business will depend on your specific circumstances, so it’s important to confirm rates with your insurance carrier or the Nebraska Workers’ Compensation Division.
Workers’ comp is just one part of the compliance puzzle. You’ll also want to make sure your hourly rates meet state and local standards, and our employer’s guide to the Nebraska minimum wage makes it easy to do so.
How are workers’ compensation insurance premiums calculated for businesses in Nebraska?
In Nebraska, workers’ compensation insurance premiums are calculated using the standard method widely adopted across the country through the NCCI system. Premiums are primarily based on the employer’s annual payroll, the applicable job classification rates, and the employer’s applicable experience modification factor.
The typical formula used by insurance carriers to calculate the base premium is:
(Payroll ÷ 100) × Classification Rate × Experience Modifier = Base Premium
Higher-risk job classifications, such as those in construction or manufacturing, have higher rates, while lower-risk jobs like office or clerical work are assigned lower rates. The final premium may also be adjusted based on factors such as premium discounts, schedule rating credits or debits, minimum premiums, and other insurer-specific adjustments.
How can Nebraska employers purchase workers’ compensation insurance?
Nebraska business owners can obtain workers’ compensation coverage in one of three ways.
- By purchasing a workers’ compensation policy from a private insurance company that is licensed in the state of Nebraska to sell workers’ compensation policies.
- By obtaining insurance through the Nebraska Department of Insurance.
- By applying to the Nebraska Workers’ Compensation Court to become self-insured. Requirements for being self-insured include a minimum of five years in business, have at least 100 employees, and have an established program in place that addresses employee safety. Once approved, businesses are required to file a surety bond.
What are the penalties for not having current workers’ compensation coverage?
If a Nebraska employer is found to be lacking adequate workers’ compensation coverage, the results can be less than ideal. Penalties can be monetary but may also prevent a business from operating.
- A civil fine of up to $1,000 for each violation, with each day that coverage is not in place constituting another violation.
- Criminal charges which can include imprisonment for up to one year, a $1,000 fine, or both.
- Employers may be prohibited from operating their business in Nebraska until workers’ compensation coverage is in place and the civil penalty paid.
In addition to the penalties assessed by the state of Nebraska, employers may be sued by the injured employee for damages resulting from their injury.
What happens when an employee is injured?
Any employee injured on the job is required to notify their employer as soon as possible. Employees should seek emergency care when necessary and inform the medical provider that the injury is work-related.
Once an employer has been given notification of the injury, they will need to file a First Report of Alleged Occupational Injury or Illness with the court within ten days of the notice of injury. Employees have up to two years to file a workers’ compensation claim from the date of the original injury or illness.
The employer is also responsible for telling the employee about their right to choose a doctor for treatment, and must provide their employee with Form 50, Choice of Doctor, giving them a reasonable amount of time to complete and return the form.
Can an employee use their own physician for a work-related injury?
In Nebraska, an employer must notify the employee about their right to choose the doctor they wish to treat their injury or illness. Employees must fill out Form 50 – Choice of Doctor to inform their employer about their choice of doctor. The employer is responsible for providing Form 50 to any employee who has notified them about a work-related injury or illness. The doctor chosen by the employee must have treated the employee or a family member in the past. If the employee does not have a doctor, the employer will choose the doctor. Once a treating physician has been chosen, whether by the employee or the employer, the doctor cannot be changed without prior written approval or by court order.
More resources for Nebraska employers
For more information, contact the Nebraska Workers’ Compensation Court via email or call 800-599-5155. In addition, mores resources from the state are listed below.
Why workers’ compensation is so important for Nebraska employers
Having a workers’ compensation policy in place makes good business sense. While serving as a safeguard for your employees should they be injured on the job, coverage can also protect your company from possible lawsuits and costly penalties, including a complete shut–down of your business. If you have any questions about obtaining a workers’ compensation policy, our team can help.
Please note all material in this article is for educational purposes only and does not constitute tax, benefits or legal advice. You should always contact a qualified tax, legal or financial professional, in your area for comprehensive tax or legal advice.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.