September 19, 2014
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Wage Theft and Paystub Bill Advances for Final Reading

Nebraska Employers should be aware that the 2014 Nebraska Unicameral Business and Labor Committee has advanced LB560 for “Enrollment and Review for Engrossment.” The bill would significantly alter the Nebraska Wage Payment and Collection Act, addressing wage theft, mandating new wage itemization, and authorizing investigations with penalties.

If passed suspected wage theft could result in an investigation by the Department of Labor, complete with subpoena power for witnesses and records.  Employers would face a civil penalty of $500 for a first offense and up to $5,000 for subsequent offenses. Citations and penalties could be contested within 15 days through the administrative process.

Employers would also become obligated to provide non-exempt employees with an itemized statement listing their wages and deductions on each payday. Employers would generally not be required to provide such information for employees exempt from overtime under the Fair Labor Standards Act unless the employer had a practice or policy of paying bonuses or overtime based on hours worked.  Failure to do so would lead to an infraction under Neb. Rev. Stat.  § 29-436, meaning fines of up to one-hundred dollars for a first offence, three-hundred dollars for a second offence within a two year period, and up to five hundred dollars on a third or subsequent conviction within two years.

The significance of the Enrollment and Review of this bill stems from the fact that the bill is prepared for final reading after having been advanced from Select File. The bill was a carryover from 2013, and this year several amendments have been adopted or rejected, and it is generally considered ready for final preparation and a vote. Employers should therefore pay close attention as this bill appears on track to becoming law.

Nebraska Legislature – Proposed Bills Could Affect Employers Withholding Wages

Two Nebraska bills have been proposed which would hold employers more accountable for withholding employee wages and provide employees with more protection. The Business and Labor Committee held hearings on LB 177 and LB 560 on February 4 and has not yet taken further action.

Senator Jim Smith introduced LB 177 which proposes to allow the Commissioner of Labor to seek enforcement of the Nebraska Wage Payment and Collection Act by investigating employers who have violated the act and could assess a civil penalty up to $1,000. This bill gives the Commissioner the power to:

• investigate
• hold hearings and
• subpoena records and witnesses.

If an employer willfully violated the Act, then the Commissioner could hold the employer liable to the affected employee for waiting time damages. These damages would be 50 percent of the wages owed.

This bill would give employees a different avenue to recover unpaid wages. Currently employees can only recover unpaid wages if they bring a civil suit after 30 days of a missed pay day.

In addition the Commissioner would be obligated to report a noncompliant employer to the county attorney. A violation would be Class IV misdemeanor. Under the current law, only a fine can be levied against employers who fail to provide an employee with an itemized statement, if a request was made.

During the hearing Sen. Smith offered an amendment to the proposed bill which would drop the Labor Commissioner’s ability to issue a $1,000 penalty.

The second bill, LB 560 introduced by Senator Heath Mello, proposes amendments to several acts. The bill would amend the Nebraska Fair Employment Act, the Wage and Hour Act, the Nebraska Wage Payment and Collection Act, and the Employee Classification Act.

LB 560 would amend the Nebraska Fair Employment Act to give the Commissioner of Labor the power to hold hearings and subpoena witnesses. It would also require every employer and labor organization that is subject to Fair Employment Act to keep and maintain employment records for five years.

The Nebraska Wage Payment and Collection Act would be amended to require employers give a 30-day notice to an employee before altering the employee’s wages. Currently the Act only requires a 30-day notice before altering an employee’s regular paydays. Also, the bill would require employers to provide an itemized statement detailing wages and the deductions made. This is different from the current rule which requires an employer to only supply an itemized statement after a request from an employee. Senator Mello’s bill would also give the Commissioner of Labor power to investigate and subpoena records and

witness related to enforcement of the Act. It also requires the county attorney to prosecute violators.

LB 560 would also prohibit retaliation by employer against an individual for participating in any investigation or hearing under the Nebraska Wage and Payment Act, The Wage and Hour Act, and the Employee Classification Act.

Several groups supported the two bills during the hearings, while each bill received a letter in opposition. The Labor Commissioner took a neutral position on both bills because more employees would need to be hired to carry out the investigations. A fiscal note is attached to both bills and estimates a cost between $149,148 and $165,345 for each of the next two years.

While LB 560 contains very similar amendments as LB 177, no formal discussions about combining the bills have taken place.

Nebraska employers should keep an eye on these proposed bills, as their effect on employment laws could be severe.

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