Nebraska Overtime Laws

April 8th 2024

When it comes to employment, understanding the regulations that govern an employee’s rights is essential. In Nebraska, employees are protected by Nebraska Labor Laws that outline various aspects of employment, including overtime pay. Overtime laws ensure that employees are fairly compensated for their extra hours of work beyond the standard 40-hour workweek.

This article will provide information to successfully navigate Nebraska’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

Nebraska Overtime Rates

In Nebraska, overtime rates refer to additional compensation that employees may be entitled to receive when they work beyond their regular working hours. Employees who work over 40 hours per week are entitled to overtime pay at time-and-a-half (1.5) for every additional hour worked. 

Since the regular minimum wage in Nebraska is $12.00 per hour, this means Nebraska’s overtime minimum rate is $18.00 per hour. 

Overtime Entitlement in Nebraska

According to federal and Nebraska overtime laws, overtime pay is required for any non-exempt employees. 

Employees in non-exempt industries who make less than $684 per week ($35,568 annually) are entitled to overtime compensation.

However, an employee’s overall eligibility for overtime pay is based on job duties or business they are involved in.

Read more about Overtime Exceptions and Exemptions in Nebraska.

Overtime for Tipped Employees in Nebraska

The overtime rate for tipped employees is 1.5 times their regular wage for every overtime hour worked. It is important to note that tipped employees in Nebraska are subject to a lower minimum wage per hour instead of the regular state minimum wage.

The use of a “tip credit” system, which allows employers to pay tipped employees a reduced minimum wage, is permitted by both state and federal legislation. However, a tipped worker must accumulate enough tips to total up to the regular state minimum wage. If their wage, including tips earned, falls below the regular minimum wage, their employer must make up the difference.

That being said, an employer cannot include that tip credit in the calculation of overtime pay. This means that the entire minimum wage must be considered when calculating overtime pay.

Overtime for Salaried Employees in Nebraska

In Nebraska, only certain salaried employees have the right to receive overtime pay. A salaried employee is an individual who receives a predetermined salary, regardless of the actual hours worked. This means that even if they work more than the hours their salary compensates for, they are still entitled to additional compensation for their extra hours.

To determine a salaried employee’s overtime rate, an employer must first determine their employee’s hourly rate by dividing the salary by the number of hours that salary compensates for.

Then, take the hourly pay rate to calculate the overtime rate for salaried employees using the following formula:

Hourly pay rate x Overtime Hours x Overtime Rate (1.5)

It is important to note that if an employee’s salary covers less than 40 (hours) in a workweek, their regular rate will be added for every subsequent hour working up to the 40. Only after 40 hours will time-and-a-half be counted.

If an employee’s salary covers 40 (hours) in a workweek, then time-and-a-half will be paid for any hours over 40.

Calculating Overtime with Commission in Nebraska

In Nebraska, employees who may receive commissions are still entitled to overtime pay although the rate may differ.

If an employee receives weekly commissions, the commission will be combined with the employee’s weekly wage to get the total earning for the week. The amount is then divided by the total number of hours worked in the week to determine the regular hourly rate for that week. For any hours worked beyond 40 per week, the employee must be paid additional compensation at a rate of half of the regular hourly rate.

For example, let’s say an employee works 45 hours a week at a rate of $12.00/hour (Nebraska minimum wage) and receives $50 in commissions for that week. 

(Total hours x Hourly Rate) + Commission

= (45 x $12.00) + 50

= $590 (total earnings for the week)

Then, divide that by the total hours worked in the week.

= $590 / 45

=$13.11 (new regular hourly rate)

To determine the overtime rate for the commissioned employees, we need to take that new regular hourly rate and halve it.

$13.11 / 2

= $6.56

Since the employee worked an extra 5 hours in the week, that makes his overtime compensation $32.8 ($6.56 x 5 hours).

The amount will vary according to the hours worked, hourly rate, and commission earned.

Overtime Exceptions and Exemptions in Nebraska

In Nebraska, the federal Fair Labor Standards Act (FLSA) governs employees who are exempt from overtime pay. The following are among the exempted:

  • Executives, administrators, and other professionals earning at least $684 per week
  • External salespeople
  • Computer-related workers
  • Independent contractors
  • Transportation workers
  • Certain agricultural and farm workers
  • Some live-in employees such as housekeepers

Statute of Limitations For Unpaid Overtime Claims in Nebraska

In Nebraska, the statute of limitations for an employee to recover unpaid overtime wages is two years from the date of the violation. For example, an employee who files a lawsuit today can seek the recovery of overtime back wages for only the previous two years. This statute of limitations can be extended to three years if an employer has wilfully or knowingly violated overtime regulations. 

Legal Cases Relating to Overtime Compensation in Nebraska

Below, we present law cases relating to fair overtime compensation for employees in Nebraska: 

1. Exotic Dancers Seek Overtime Compensation After Being Misclassified as Independent Contractors

In the case of Grove v. Meltech, Inc., Andrea Grove and Chrystina Winchell filed a lawsuit against Meltech, H&S Club Omaha (H&S), Shane Harrington, and Brad Contreras. Grove and Winchell claimed that they were misclassified as independent contractors while working as exotic dancers at Club Omaha, and as a result, they were denied minimum wage and overtime pay.

The court certified a collective action for other individuals who worked as exotic dancers at Club Omaha and were also classified as independent contractors. This collective action allowed other individuals to opt into this lawsuit. After this certification, both parties engaged in a settlement negotiation and reached an agreement that included all individuals who had opted into this lawsuit.

The settlement agreement allowed for an award of attorney’s fees and costs in the amount of $50,000. Grove and Winchell were offered service awards of $2,000 and $3,000 respectively. Moreover, Grove was offered $10,000 in exchange for the dismissal of her claims. Additionally, both Grove and Winchell were set to receive $5,000 each for the retaliation claims they had asserted in the case.

The court considered the settlement agreement to be a reasonable compromise and approved it as a fair resolution of the dispute.

Key lessons from this case:

  • Employees who have been misclassified as independent contractors are entitled to overtime back wages that they did not receive.
  • To avoid a lengthy trial, employees and employers can choose to negotiate a settlement agreement that benefits both parties.
  • Similarly situated employees can opt-in to an overtime claims lawsuit if the court grants a conditional certification for a collective action.
2. Employer Seeks to Dismiss Overtime Pay Claims Made by Employee

In the case of Midgett v. Werner Enterprises, Inc., Christopher Midgett filed a lawsuit against Werner Enterprises (Werner) for allegedly improperly classifying him and other truck drivers as independent contractors instead of employees. Midgett claimed that Werner failed to pay them minimum and overtime wages, which violated the Fair Labor Standards Act (FLSA) and the Nebraska Wage Payment and Hour Act (NWHA). 

This lawsuit consisted of drivers classified as independent contractors who transported Werner’s truckload shipments between specific dates using trucks purchased from Werner or other sources. Werner filed a motion to dismiss the NWHA claim. They argued that Midgett lacked standing to assert the claim because he was a Georgia resident and did not state that he worked in Nebraska. Werner contended that the NWHA did not apply to non-residents who did not work in Nebraska. 

In response, Midgett submitted evidence, which included deposition testimony, the Werner owner-operator agreement, and settlement statements, showing that he made trips in Nebraska and that Werner’s headquarters, senior management, and data servers were located in Nebraska.

The court considered the evidence and found that Midgett had standing to prosecute the Nebraska law claim. The court also noted that Midgett had worked in Nebraska, had a contract governed by Nebraska law, and had a business relationship with Werner based in Nebraska. The court concluded that Midgett’s connection to Nebraska was sufficient to establish standing and denied Werner’s motion to dismiss.

Key lessons from this case:

  • Even though employees may reside elsewhere, they are subjected to the laws of the state in which their employment contract is based.
  • Improper classification of employees can lead to lawsuits of overtime back wage claims.
  • If the complainant (employee in this case) presents a valid argument for their claims, motions to dismiss an overtime lawsuit are not applicable.
3. Department of Labor Filed a Complaint Against the Company for Unlawful Overtime Wage Practices

In the case of Pizzella v. Cilantros Mexican Bar & Grill, LLC., Patrick Pizzella, Acting Secretary of Labor for the United States Department of Labor, filed an amended complaint against Cilantros Mexican Bar & Grill, LLC, Managua, LLC, and Alegria LLC (collectively referred to as “Defendants”). The complaint alleges that the Defendants violated the Fair Labor Standards Act (FLSA) provisions.

The court issued a judgment without contest, permanently enjoining and restraining the Defendants from violating the mentioned provisions of the FLSA. The judgment included requirements for the Defendants to pay their employees who were engaged in commerce or the production of goods for commerce at the applicable minimum wage rates and to compensate employees at a rate of 1.5 for every overtime hour worked. The judgment also instructs the Defendants to maintain accurate records of employees’ hours and wages and to categorize employees as exempt from overtime and minimum wage requirements only if they meet the specified exemption criteria.

Additionally, the judgment imposes financial obligations on the Defendants. They were ordered to pay a sum of $19,247.55, which represented the alleged unpaid minimum wages and overtime compensation for specific employees listed in Exhibit A (refer to the case). The payment should be made to the United States Department of Labor. Furthermore, the Defendants are required to pay an FLSA Civil Money Penalty of $1,750.00.

The judgment also imposed various measures, which included the prohibition of coercion or solicitation of employees to return or offer money previously due to them. The Defendants were also required to ensure proper compensation for all work and maintain accurate records. As extra safety measures, they must post FLSA Minimum Wage posters at their establishments, and provide employees with reference guides and fact sheets related to the FLSA.

Key lessons from this case:

  • Employees involved in commerce businesses are still subject to the overtime pay provisions of the FLSA.
  • The Department of Labor has the authority to initiate a lawsuit on behalf of employees against an employer who is found to be violating overtime laws.
  • Employers may be required to implement enhanced compliance measures, such as accurate recordkeeping, displaying labor law posters, and providing educational materials on the FLSA to employees.

Learn more about Nebraska Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.