Nebraska Severance Pay Laws (2026): Is Severance Required?

Nebraska law does not require employers to pay severance. Severance in Nebraska comes only from a contract, a written plan or an employer policy, and even then the state's wage law generally does not treat it as wages. The official annotation to Neb. Rev. Stat. 48-1229 summarizes Eikmeier v. City of Omaha (2010) as holding that severance payments not earned through continued employment are not compensation for labor or services under the Wage Payment and Collection Act.

What changed in 2026 is notice. Nebraska enacted its own WARN Act (LB921), which requires 90 days' notice of large layoffs but gives workers no back pay when an employer skips it. For how other states handle severance and the full federal rules, see our severance pay laws by state guide.

Information last verified on October 8, 2026. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Nebraska law on severance pay: the Nebraska Wage Payment and Collection Act (Neb. Rev. Stat. 48-1229 to 48-1236), the Nebraska Worker Adjustment and Retraining Notification Act enacted by LB921 (2026), and the unemployment rule in Neb. Rev. Stat. 48-628.02, with short notes on the federal rules that apply in Nebraska. It does not cover when your final paycheck is due; see Nebraska final paycheck laws. It does not cover unemployment benefit amounts or how to file; see Nebraska unemployment benefits.

Is severance pay required in Nebraska?

No. We found no Nebraska statute that sets a severance amount or formula or requires a private employer to offer severance. We read the Wage Payment and Collection Act, the unemployment disqualification statute (48-628.02) and the full slip law of LB921, the 2026 act that created the Nebraska WARN Act.

In those laws, severance appears only in conditional ways: the case annotation to the definition of wages, the WARN Act's rule that severance can shorten the notice period, and the unemployment offset. A search of the state statutes in our corpus for "severance" returned nothing relevant. We did not run a full-text search of the entire Revised Statutes, so treat this as a finding about the laws most likely to contain a rule, not an exhaustive one.

Federal law does not fill the gap. The U.S. Department of Labor says there is no requirement in the Fair Labor Standards Act for severance pay, and that severance is "a matter of agreement between an employer and an employee."

The Nebraska WARN Act (LB921, 2026)

The Legislature passed LB921 on Final Reading 37-12-0 on April 10, 2026, and the Governor approved it on April 14, 2026. Sections 1 to 6 are the Nebraska Worker Adjustment and Retraining Notification Act. We did not check where these sections were placed in the Revised Statutes, so this page cites the act by bill section.

When it takes effect

We found no emergency clause in LB921. Under the Nebraska Constitution, art. III, sec. 27, an act without one takes effect three calendar months after the Legislature adjourns, and the agenda for the 2026 session's final day, April 17, 2026, lists adjournment sine die. Section 25 of LB921 makes the WARN sections operative on the act's effective date, and the Legislature's statute pages give that date as July 18, 2026 (for example, the LB921 amendment to Neb. Rev. Stat. 48-628). Layoffs ordered before then were not covered.

Who is covered and what triggers notice

"Employment loss" excludes a discharge for cause, a voluntary departure and retirement. It includes a layoff of more than six months and a cut in hours of more than 50 percent in each month of a six-month period. A relocation is not an employment loss if the employer offers a transfer within a reasonable commuting distance with no more than a six-month break (sec. 2(5)). Losses at one site within any 90-day period are added together (sec. 4(2)(b)).

The 90-day notice rule

An employer "shall not order such action until the end of a ninety-day period which begins after the employer serves written notice" on the affected employees or their representatives and on the Nebraska Department of Labor (sec. 3(1)(a)). If a collective bargaining agreement sets a different notice period, the agreement governs.

The notice must include the site, the expected dates, and the job titles and names of affected employees, along with the employee handbooks or policies or an online location for them (sec. 3(2)). It must also be posted conspicuously in the languages spoken by at least 5 percent of the workforce (sec. 3(3)).

Section 4 sets exceptions for a faltering company (closings only), unforeseeable business circumstances, a natural disaster, and a strike or lockout.

Severance can shorten the notice period. Under sec. 4(7), the 90-day period "may be reduced by the number of days for which severance payments or wages in lieu of notice are paid," at least at the employee's regular pay for the work days in the notice period.

No back pay for missed notice

The Nebraska Department of Labor enforces the act. An employer that violates the notice rule is "subject to a civil penalty of not more than one hundred dollars for each day of the violation," that penalty is "the exclusive remedy for any violation," and a court cannot stop a closing or layoff (sec. 5). Section 6 lets the department adopt rules; we did not find any.

How it compares with federal WARN

The federal notice period runs concurrently with any notice period another statute requires (29 U.S.C. 2105). If your employer is covered by federal WARN, that law's back-pay remedy can apply alongside Nebraska's longer notice rule. Our severance pay laws by state guide explains the federal rules.

Is promised severance "wages" in Nebraska?

Generally not, and that changes what you can recover. The Wage Payment and Collection Act defines wages as:

"compensation for labor or services rendered by an employee, including fringe benefits, when previously agreed to and conditions stipulated have been met by the employee"

That is Neb. Rev. Stat. 48-1229(6). The Legislature's official annotation to that section summarizes Eikmeier v. City of Omaha, 280 Neb. 173, 783 N.W.2d 795 (2010), as holding that payments under a severance agreement that were not earned and did not accrue through continued employment are not compensation for labor or services, so the employee was not entitled to attorney fees under the Act. The case involved city employees with a contractual severance agreement. Eikmeier follows two earlier Nebraska Supreme Court decisions, Heimbouch v. Victorio Insurance Services (1985) and Babb v. United Food & Commercial Workers (1989), which held that a severance payment that becomes due on termination is not covered by the Act; Babb involved severance claimed under a union's severance policy. The court in Eikmeier also rejected the argument that the payments were deferred compensation for continued work.

The act's list of fringe benefits in 48-1229(4) covers sick and vacation leave, pension and health plans and "any other employee benefit plans or benefit programs," and does not name severance. The annotation to the same section summarizes Timberlake v. Douglas County, 291 Neb. 387 (2015), as saying that list is not exclusive. Eikmeier did not separately analyze whether a severance plan could be a covered fringe benefit under 48-1229(4).

What this means for a claim

If your severance was promised only on termination, an unpaid promise is most likely a breach-of-contract claim, not a wage claim. If the severance comes from a formal company plan, federal ERISA may govern it instead, because ERISA supersedes state laws that relate to covered employee benefit plans (29 U.S.C. 1144(a)). We found no Nebraska source on how that applies to a particular plan.

How to claim unpaid wages in Nebraska

If what you are owed does count as wages, two routes exist.

• Department of Labor complaint. The Nebraska Department of Labor's Labor Standards office takes wage complaints for "past due/unpaid wages," payroll, unauthorized deductions and minimum wage violations. Its page does not say whether it accepts promised-severance claims. The Commissioner can issue citations with administrative penalties of up to $500 for a first violation and up to $5,000 for later violations (48-1234(2)).
• Lawsuit. An employee with a claim for wages unpaid within thirty days of the regular payday "may institute suit for such unpaid wages in the proper court," and an employee who wins recovers the judgment, costs and reasonable attorney fees (48-1231(1)).

Under 48-1232, a court may also order an amount equal to the unpaid wages, or two times the unpaid wages if nonpayment was willful. That extra amount goes to the State Treasurer for the school fund, not to the employee.

The sections of the Act we read state no deadline for suing. A suit on a written severance agreement must generally be brought within five years (Neb. Rev. Stat. 25-205) and on an oral promise within four years (25-206). A severance plan governed by ERISA has its own claims procedure and deadlines, so act promptly.

When must severance be paid?

Nebraska sets no deadline for severance specifically. For wages, when a private employer separates an employee, "the unpaid wages shall become due on the next regular payday or within two weeks of the date of termination, whichever is sooner" (48-1230(4)(a)). Political subdivisions follow a separate schedule tied to the governing body's next regularly scheduled meeting (48-1230(4)(b)).

If severance is not wages under Eikmeier, that deadline does not govern it, and the agreement's own terms do. For when your last regular paycheck is due, see Nebraska final paycheck laws.

Severance and Nebraska unemployment benefits

Severance generally disqualifies you from unemployment benefits for the weeks it covers. Neb. Rev. Stat. 48-628.02(1)(a) says:

"An individual shall be disqualified for benefits for any week in which he or she is receiving or has received remuneration in the form of: (a) Wages in lieu of notice or a dismissal or separation allowance"

A lump-sum payment is prorated to the weeks to which it is "reasonably attributable." If the prorated amount for a week is less than the benefit you would otherwise receive, your benefit is reduced by that amount instead (48-628.02(2)). We did not find guidance on how the department decides which weeks a lump sum covers.

The Department of Labor's Handbook for Unemployed Workers (updated August 2026) says, "We may deny or reduce benefits for any week in which you receive payments from your employer," listing severance among its examples, and tells claimants to report "any wages paid, or payable, to you while you are unemployed. This includes pay from workers' compensation, severance, or a pension." For benefit amounts and how to file, see Nebraska unemployment benefits.

What a Nebraska severance agreement can and cannot require

Apart from the unemployment rule below, we found no Nebraska statute that restricts releases, confidentiality or non-disparagement terms in a private separation agreement, or that sets a review or revocation period. That finding rests on targeted searches, not a review of the whole code; we did not read the Nebraska Fair Employment Practice Act or the workers' compensation settlement rules. We also found no Nebraska statute or case on whether a release can waive wage-act claims.

A release in a severance agreement cannot take away your right to unemployment benefits. Under Neb. Rev. Stat. 48-645, any agreement by an individual "to waive, release, or commute his or her rights to benefits or any other rights under the Employment Security Law shall be void," and no employer shall "require or accept any waiver of any right hereunder by any individual in his or her employ."

Non-compete terms in a severance agreement

Nebraska courts enforce a non-compete only if it is reasonable (not injurious to the public, no greater than reasonably necessary to protect a legitimate business interest, and not unduly harsh and oppressive), and they will not rewrite an overbroad clause to make it enforceable (Unlimited Opportunity v. Waadah, 290 Neb. 629 (2015)).

Federal limits that also apply

If you are 40 or older, a release of federal age-discrimination claims must give you at least 21 days to consider it (45 days in a group program) and 7 days to revoke it after signing (29 U.S.C. 626(f)). Our severance pay laws by state guide covers this and the other federal limits on releases.

Reading a Nebraska severance offer

Because Nebraska law does not require severance, the written agreement, plan or policy is what sets your rights, so keep a copy of whatever describes it. Note whether the payment depends on signing a release and when it is due. If you were let go in a layoff of 100 or more at your site, ask whether your employer gave 90 days' WARN notice and whether severance was paid in place of notice days. Our severance pay laws by state guide has general guidance on reading and negotiating an offer.

Recent Nebraska changes

LB921 also amended two unemployment sections (48-604 and 48-628); the part of 48-628 we read does not concern severance, and 48-628.02 was not amended. We did not walk the full 2025-2026 bill index or check bills for the 2027 session, so check the Legislature's website for later changes.

Related

• Severance pay laws by state
• Nebraska final paycheck laws
• Nebraska unemployment benefits
• Nebraska at-will employment laws

Disclaimer: This article provides general legal information about Nebraska severance pay law (the Wage Payment and Collection Act, Neb. Rev. Stat. 48-1229 to 48-1236, the Nebraska WARN Act enacted by LB921, and Neb. Rev. Stat. 48-628.02) and the federal laws that apply in Nebraska. It is not legal advice. The information was verified on October 8, 2026. For advice about your situation, contact the Nebraska Department of Labor, a legal aid office or a lawyer licensed in Nebraska.

Last updated: October 8, 2026.

Frequently Asked Questions

Is severance pay required by law in Nebraska?

No. We found no Nebraska statute requiring an employer to pay severance. It is owed only when a contract, plan or policy promises it, and the Nebraska WARN Act (LB921, 2026) requires notice, not severance.

Does Nebraska have its own WARN Act?

Yes, since 2026. LB921 requires employers with 100 or more employees, not counting part-time workers, to give 90 days' written notice to affected employees and the Nebraska Department of Labor before a business closing or mass layoff of 100 or more employees at one site.

When does the Nebraska WARN Act take effect?

The Nebraska WARN Act took effect on July 18, 2026. LB921, approved by the Governor on April 14, 2026, has no emergency clause, so it took effect three calendar months after the session adjourned (Neb. Const. art. III, sec. 27), and sec. 25 makes the WARN sections operative on that effective date. The Legislature's statute pages show July 18, 2026 for LB921's other amendments.

Do I get back pay if my Nebraska employer skipped WARN notice?

Not under the Nebraska WARN Act. LB921 makes a civil penalty of not more than $100 for each day of the violation the exclusive remedy. Federal WARN provides back pay of up to 60 days, but only against employers covered by the federal law (29 U.S.C. 2101, 2104).

Is severance considered wages in Nebraska?

Generally not. The Wage Payment and Collection Act covers compensation for labor or services (Neb. Rev. Stat. 48-1229(6)), and the Nebraska Supreme Court has held that severance that becomes due on termination is not wages under the Act (Eikmeier v. City of Omaha, 2010, following Babb, 1989). Eikmeier did not separately analyze whether a severance plan could be a covered fringe benefit.

Can I collect unemployment while receiving severance in Nebraska?

Not for the weeks the severance covers. Neb. Rev. Stat. 48-628.02 disqualifies you for any week in which you receive a dismissal or separation allowance or wages in lieu of notice, and reduces benefits if the amount for a week is less than your benefit. Report severance when you file.

How long do I have to sign a severance agreement in Nebraska?

We found no Nebraska statute setting a review or revocation period. If you are 40 or older, federal law requires at least 21 days to consider a release of age claims (45 in a group program) and 7 days to revoke it (29 U.S.C. 626(f)).