Nebraska Wage Payment and Collection Act: What Employers Need to Know

One of my greatest loves at the Berry Law is helping small business clients avoid trouble. Often this involves issues of employment law. Many of my small business clients have experienced terminating a problem employee.

Recently one of my clients experienced an employee theft and terminated the employee. The employee even admitted to the crime. My client wanted to withhold from the employee’s final paycheck, with the consent of the employee.

My response: get a written agreement.

The Nebraska Wage Payment and Collection Act (WPCA), Neb. Rev. Stat. § 48-1228, et. seq., provides, inter alia, an employer may not withhold from an employee’s paycheck without a written agreement, with the exception of taxes, FICA, and similar withholdings required by law.

This requirement holds true even for an employee who steals from an employer or fails to return employer property. Furthermore, the WPCA provides for attorneys’ fees after 30 days and, if the nonpayment is willful, the employer may be order to pay two times the amount of unpaid wages.

In short, without a written agreement, you cannot withhold. Your only option is to pay the employee and then file suit against the employee to cover the lost property.

Of course, consent to withhold can be in a severance or settlement agreement, but why wait? Generally, when I draft or revise an employee manual for a client, I have an express provision the employee authorizes the employer to withhold from any final paycheck any amount necessary to reimburse the employer for lost or stolen items.

Another frequently cited provision of the WPCA by terminated employees is a demand for payment for earned vacation time. The WPCA mandates, earned vacation time, even when it is called paid time off, must be paid to employees upon discharge, just like regular wages, within two weeks or the next regular payday, whichever is sooner. This also applies to commissions that were earned, but not paid. An employer does not, however, have to pay accrued sick leave, absent an agreement to the contrary.

Additional commonly cited provisions under the act include: 1) thirty days’ notice before regular paydays are changed by the employer; and 2) employers must provide employees a wage statement showing the name of the employer, the hours worked (for non-exempt employees); the wages paid; and deductions made for the employee.

Finally, note the WPCA does not revoke the employment-at-will doctrine in Nebraska, which provides at-will employees may be terminated at any time for any reason, or no reason, provided it does not violate the law or public policy (such as terminating for race, religion, gender, call to jury duty, marital status, etc.).

Anytime you are terminating or disciplining an employee, it is always wise to consult with an attorney to avoid lawsuits. Call Berry Law for a free consultation.

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