What You Need to Know About Nebraska’s Minimum Wage

Nothing in this article constitutes legal advice. Please consult a tax attorney or tax professional if you have questions about minimum wage compliance.

The minimum wage rate varies from state to state. So it’s important to understand the minimum wage rates and laws for the state you and your employees call home.

In Nebraska, there are quite a few things to keep in mind when it comes to compensating your workers. That’s why we’ve created this guide, just for you, to stay up to date with what’s going on with the Nebraska minimum.

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What is the minimum wage in Nebraska?

The minimum wage rate in Nebraska currently is $9.00 per hour, which is $1.75 more than the federal minimum wage rate of $7.25. Although the increase in the Nebraska minimum wage occurred in 2016, the rate is evaluated every year based on inflation and the Consumer Price Index.

There are a few exceptions when it comes to the minimum wage rate in Nebraska:

  • Employers can pay tipped employees a minimum of $2.13 per hour. Of course, workers can keep all their tips.
  • Student workers and interns can be paid 75 percent of the minimum wage rate, or $6.75 per hour.
  • Any new employee under the age of 20, who isn’t a seasonal or migrant worker, can be paid 75 percent of the federal minimum wage for the first 90 days of work.
  • Employees considered exempt under the Fair Labor Standards Act (FLSA) do not have to be paid minimum wage.
  • A rate of $13.50 per is overtime pay in Nebraska and comes into effect any hours worked over a total of 40 in a single work week.
  • Federal contractor employees must be paid a minimum wage of $10.80, effective January 1, 2020.

Will the minimum wage change in 2022?

The last time Nebraska minimum wage saw an increase was January 2016. Prior to that, Nebraskans voted to pass a minimum-wage ballot measure that raised the minimum wage from $7.25 to $8 in 2015, and then to $9 in 2016. Nebraska’s minimum wage was stuck at $7.25 for six years before that momentous vote. At this time, there aren’t any plans to raise Nebraska’s minimum wage rate in 2022.

Are there plans to change the minimum wage beyond 2022?

At this time, there aren’t any plans to raise Nebraska’s minimum wage rate beyond 2022. However, Nebraska lawmakers continue to present new bills to raise the state minimum wage. In August 2021, a coalition of Nebraska partners and advocates introduced a ballot initiative to raise the state mandated hourly pay rate to $15 per hour by 2026. While this bill is still in the works to gain the necessary number of signatures to be considered on the November 2022 ballot, it remains uncertain how the Nebraska minimum wage will change in the future.

How should small business owners prepare for changes to the minimum wage?

Your business doesn’t have to take a big hit during any possible increase in the Nebraska minimum wage. Here are some ways to prepare for any future changes in the minimum wage:

  • Reduce costs: You don’t have to cut payroll to make ends meet. Instead, look at how you spend company money and find ways to reduce business expenses. Updating your business tech like using Square Payroll software can help you reduce costs. You get custom payroll features like automatic payroll and simple team management, all with small business pricing in mind.

  • Evaluate your hiring practices: Hiring and onboarding new staff can be costly, so you want to make sure your new hires have staying power. Cast a wide net when looking for new additions, and once they join, make employee retention a top priority.

  • Increase prices: Maybe it’s time to consider raising your prices since the cost of employees is going up. In business, this is referred to as a market equilibrium. With paychecks getting fatter, the buying power will remain the same with new prices.

With updates on the Nebraska minimum wage and small business resources, like how to get a free EIN and more, Square is here to help your small business every step of the way.