Key Takeaways
• Nebraska’s minimum wage rises to $13.50 per hour on January 1, 2025.
• Training wage of 75% applies for workers under 20 for their first 90 days.
• From 2027, minimum wage adjusts annually based on inflation via the CPI.
Nebraska’s Minimum Wage Set to Rise to $13.50 Per Hour on January 1, 2025
Nebraska’s minimum wage will increase to $13.50 per hour starting January 1, 2025, marking a significant step in the state’s multi-year plan to raise pay for low-wage workers. This change, approved by voters in a 2022 ballot initiative, affects thousands of workers and employers across Nebraska. The new rate is part of a scheduled series of increases designed to boost earnings for the state’s lowest-paid employees while giving businesses time to adjust.
This article explains what the minimum wage increase means, how it will work, who it affects, and what both workers and employers need to know as the new rate takes effect.
Minimum Wage in Nebraska: What’s Changing and Why
Who is affected?
All employees in Nebraska who are paid by the hour and not exempt under state or federal law will see their minimum wage rise to $13.50 per hour as of January 1, 2025. This includes workers in retail, hospitality, food service, and many other industries.
What is changing?
The minimum wage is the lowest hourly pay that employers can legally give to most workers. On January 1, 2025, Nebraska’s minimum wage will increase from $12.00 per hour (the 2024 rate) to $13.50 per hour. This is part of a phased plan that will continue with another increase to $15.00 per hour on January 1, 2026.
Why is this happening?
In November 2022, Nebraska voters approved a ballot measure to gradually raise the minimum wage. The goal is to help workers keep up with the rising cost of living and ensure fair pay. The law also aims to give businesses time to plan for higher labor costs.
Where does this apply?
The new minimum wage applies across the entire state of Nebraska. No city or county in Nebraska can set a higher or lower minimum wage than the state rate, so the law is uniform statewide.
How will it work?
Employers must pay at least $13.50 per hour to most workers starting January 1, 2025. There are some exceptions for tipped employees, young workers in training, and certain other groups, which are explained below.
A Closer Look: Nebraska’s Minimum Wage Schedule
Nebraska’s minimum wage law sets out a clear schedule for increases:
- January 1, 2024: $12.00 per hour (previous rate)
- January 1, 2025: $13.50 per hour (new rate)
- January 1, 2026: $15.00 per hour (scheduled increase)
- January 1, 2027 and beyond: Annual increases based on the Consumer Price Index (CPI), which measures inflation
This schedule was created to help workers earn more while giving businesses time to adjust their budgets and payroll systems.
Special Rules for Tipped Employees
Many workers in restaurants and other service jobs receive tips from customers. Nebraska follows federal rules for tipped employees:
- Minimum cash wage for tipped workers: $2.13 per hour
- Tip credit: Employers can count tips toward meeting the full minimum wage
- Total earnings: If a worker’s tips plus the $2.13 wage do not add up to at least $13.50 per hour, the employer must pay the difference
For example, if a server earns $2.13 per hour in wages and $10 per hour in tips, their total is $12.13 per hour. The employer must pay an extra $1.37 per hour to reach the $13.50 minimum wage.
Employers must keep accurate records to show that tipped workers are earning at least the minimum wage. Failure to do so can lead to penalties and back pay claims.
Training Wage and Other Exceptions
Nebraska law allows some exceptions to the standard minimum wage:
- Training wage for young workers: Employees under age 20 can be paid 75% of the federal minimum wage (currently $5.44 per hour) for their first 90 calendar days of work. After 90 days, they must be paid the full state minimum wage.
- Student learners and certain agricultural workers: Some students in approved training programs and certain farm workers may be exempt from the minimum wage under specific rules.
- Workers with disabilities: Individuals in certified training programs for people with disabilities may also be paid less than the minimum wage, but only under strict guidelines.
These exceptions are designed to help young people and those in special programs gain work experience, but they are limited in scope.
Legal Background: How Nebraska’s Minimum Wage Law Was Created
The current minimum wage increases are based on Nebraska Revised Statute 48-1203, which was updated after the 2022 ballot initiative. The law spells out the schedule for wage increases through 2026 and requires annual adjustments based on inflation starting in 2027.
The Nebraska Department of Labor is responsible for publishing the updated minimum wage each year. The department rounds the rate to the nearest five cents for simplicity in payroll calculations. Updated rates are usually announced in October for the following year.
Employers must follow the law or face penalties, including fines and orders to pay back wages to underpaid workers.
What Employers Need to Do
With the new minimum wage of $13.50 per hour taking effect on January 1, 2025, employers in Nebraska must take several steps to stay compliant:
- Update payroll systems: Make sure all hourly workers are paid at least $13.50 per hour starting with the first paycheck in 2025.
- Review pay for tipped employees: Check that tipped workers are earning at least $13.50 per hour when wages and tips are combined. If not, pay the difference.
- Adjust training wages: Ensure that any employees under age 20 who have worked more than 90 days are paid the full minimum wage.
- Post required notices: Display updated labor law posters showing the current minimum wage in a place where workers can see them. These posters are available from the Nebraska Department of Labor.
- Keep records: Maintain accurate payroll records to show compliance with the law.
Employers with questions can contact the Nebraska Department of Labor at 402-471-2239 or by email at [email protected]. Official guidance and resources are available on the Nebraska Department of Labor’s Labor Standards page.
What Workers Should Know
If you work in Nebraska and are paid by the hour, you should check your pay stubs in January 2025 to make sure you are receiving at least $13.50 per hour. If you are a tipped worker, add your hourly wage and your tips together to see if you are meeting the minimum wage.
If you think you are not being paid correctly, you can file a complaint with the Nebraska Department of Labor. The department can investigate and help you recover any unpaid wages.
It’s also important to know that employers cannot retaliate against workers who ask about their pay or file a complaint. The law protects your right to fair pay.
How the Minimum Wage Increase Affects Different Groups
Workers:
The increase to $13.50 per hour means higher pay for many workers, especially those in low-wage jobs. This can help families cover basic expenses like rent, food, and transportation. For tipped workers, the law ensures that total earnings meet the new minimum wage.
Employers:
Businesses will face higher labor costs as the minimum wage rises. Some employers may need to adjust prices, reduce hours, or change staffing to manage these costs. The phased approach gives businesses time to plan for each increase.
Young workers and trainees:
The training wage allows employers to hire young people at a lower rate for the first 90 days, but after that, they must be paid the full minimum wage. This helps young workers get job experience while ensuring fair pay over time.
Small businesses:
Some small business owners have expressed concern about the impact of higher wages on their budgets. They may need to find ways to increase efficiency or pass on some costs to customers. However, higher wages can also lead to lower turnover and better employee morale.
Labor advocates:
Supporters of the minimum wage increase argue that it will reduce poverty and help workers keep up with the cost of living. They point out that the law’s link to inflation starting in 2027 will help maintain the value of workers’ paychecks over time.
The Role of Inflation: What Happens After 2026
Starting January 1, 2027, Nebraska’s minimum wage will be adjusted each year based on the Consumer Price Index (CPI) for the Midwest Region. The CPI measures changes in the cost of goods and services, such as food, housing, and transportation.
This means that if prices go up, the minimum wage will also rise to help workers keep up with inflation. The Nebraska Department of Labor will announce the new rate each year in October, rounding to the nearest five cents.
By tying the minimum wage to inflation, Nebraska aims to prevent the wage from losing value over time. Workers will not have to wait for new laws or ballot measures to see their pay increase with the cost of living.
No Local Variations: Uniform Minimum Wage Across Nebraska
Unlike some states where cities or counties can set their own minimum wage, Nebraska law does not allow local governments to set a different rate. This means the minimum wage is the same everywhere in the state, making it easier for employers with locations in multiple cities to manage payroll.
Historical Context: How Nebraska’s Minimum Wage Has Changed
Nebraska’s minimum wage has increased several times over the past decade, often as a result of voter-approved measures. Before the 2022 initiative, the minimum wage was $9.00 per hour. The new law set out a clear path for increases:
- $10.50 per hour in 2023
- $12.00 per hour in 2024
- $13.50 per hour in 2025
- $15.00 per hour in 2026
- Annual inflation-based increases from 2027 onward
This gradual approach is designed to balance the needs of workers and businesses.
Expert and Stakeholder Perspectives
According to analysis by VisaVerge.com, the phased increase gives businesses time to adjust while ensuring that workers see steady improvements in their pay. Labor advocates say the new law will help reduce poverty and support families, especially as the cost of living rises.
Some business groups have raised concerns about the impact on small businesses, especially in rural areas where wages have traditionally been lower. They worry that higher labor costs could lead to job cuts or higher prices for consumers. However, supporters argue that higher wages can boost local economies by giving workers more money to spend.
The move to tie the minimum wage to inflation is seen as a way to keep the wage relevant over time. This approach is becoming more common in other states as well.
Practical Steps for Employers and Employees
For employers:
- Review all hourly pay rates before January 1, 2025, to ensure compliance
- Update payroll software and systems to reflect the new minimum wage
- Train managers and payroll staff on the new rules, especially for tipped employees and young workers
- Post updated labor law posters in the workplace
- Contact the Nebraska Department of Labor for guidance if needed
For employees:
- Check your pay stubs in January 2025 to confirm you are being paid at least $13.50 per hour
- If you are a tipped worker, add your hourly wage and tips to make sure you reach the minimum wage
- If you believe you are not being paid correctly, contact the Nebraska Department of Labor for help
Looking Ahead: What to Expect in 2026 and Beyond
The next scheduled increase will bring the minimum wage to $15.00 per hour on January 1, 2026. After that, annual adjustments based on inflation will help ensure that the minimum wage keeps up with the cost of living.
Employers and workers should watch for announcements from the Nebraska Department of Labor each October, which will set the rate for the following year. Staying informed will help everyone plan for changes and avoid surprises.
Where to Find More Information
For the most up-to-date and official information about Nebraska’s minimum wage, visit the Nebraska Department of Labor’s Labor Standards page. This site offers resources for both employers and employees, including current wage rates, required posters, and contact information for labor law specialists.
You can also call the Nebraska Department of Labor at 402-471-2239 or email [email protected] with questions.
Summary and Key Takeaways
- Nebraska’s minimum wage will be $13.50 per hour starting January 1, 2025
- Tipped employees must earn at least $13.50 per hour when wages and tips are combined
- Young workers under age 20 can be paid a training wage for the first 90 days
- The minimum wage will rise to $15.00 per hour in 2026, then increase annually based on inflation
- Employers must update payroll, post new notices, and keep accurate records
- Workers should check their pay and contact the Nebraska Department of Labor if they have concerns
Nebraska’s approach to raising the minimum wage reflects a balance between supporting workers and giving businesses time to adapt. With clear rules and a predictable schedule, both employers and employees can plan for the future. Staying informed and following the law will help ensure a smooth transition as the new minimum wage takes effect on January 1, 2025.
Learn Today
Minimum Wage → The lowest hourly pay employers can legally pay most workers in Nebraska.
Tipped Employees → Workers who receive part of their wages through customer tips, with wage regulations.
Consumer Price Index → A measure of inflation tracking cost changes in goods and services over time.
Training Wage → A reduced wage for employees under 20 during their first 90 calendar days of work.
Ballot Initiative → A process where voters approve laws directly, like Nebraska’s wage increase measure.
This Article in a Nutshell
Nebraska will raise its minimum wage to $13.50 per hour on January 1, 2025, continuing phased increases. This ensures fair pay across industries and protects workers against inflation from 2027 onward, benefiting employees while allowing businesses time to adapt to rising labor costs statewide.
— By VisaVerge.com
