Unemployment Insurance Law Summaries
Nebraska, Unemployment Insurance Law Summaries
Nebraska's unemployment insurance law is located in the Revised Statutes of Nebraska, 1943, Article 6, Secs. 48-601 to 48-669, 1951 Cumulative Supplement, as amended; and in the Regulations under the Nebraska Department of Labor, Titles 219 to Title 226. The full text of the law is available at Unemployment Insurance Reports UI-NE ¶4001 .
DEFINITIONS
“Employer” means employment of one or more individuals for some portion of a day in each of 20 different calendar weeks within either the current or preceding calendar year, or payment of $1,500 or more in any calendar quarter in either the current or preceding calendar year. Generally, an employer subject to the FUTA is automatically an employer under the Nebraska law.
“Employment:” Service, including service in interstate commerce, performed for wages or under any contract of hire, written or oral, express or implied. See EXCEPTIONS, below.
Service performed for wages, including wages received under a contract of hire, constitutes “employment” unless individual is:
free from control or direction;
performing such service outside usual course of employer's business or outside all places of employer's business; and
customarily engaged in independently established trade, occupation, profession, or business.
Generally, employment subject to the federal law is automatically subject to the Nebraska law.
“Wages:” Remuneration for personal services, including commissions, bonuses, remuneration for personal services paid under a contract of hire, the cash value of all remuneration in any medium other than cash, sick pay (unless paid under a workers' compensation law), and 401(k) type payments. Wages includes all tips received while performing services that constitute employment and that are included in a written statement furnished to the employer pursuant to IRC Sec. 6053(a). The term wages does not include the following:
Remuneration over $8,000 paid to an individual by employer during any calendar year. Wages paid by employer's predecessor or for employment in another state may be included. Wages in excess of $8,000 may be counted for benefit purposes. Wage base will be increased to correspond with any increase in the federal taxable wage base. The taxable wage base will increase to $9,000 in 2007, and thereafter.
Other exclusions from wages are listed below.
COVERAGE
Generally, an employer subject to the FUTA is automatically an employer under the Nebraska law.
Service, including service in interstate commerce, performed for wages or under any contract of hire, written or oral, express or implied. See exceptions listed below.
Service performed for wages, including wages received under a contract of hire, constitutes employment unless individual is:
free from control or direction; and
performing such service outside usual course of employer's business or outside all places of employer's business; and
customarily engaged in independently established trade, occupation, profession, or business.
Generally, employment subject to the federal law is automatically subject to the Nebraska law.
Agricultural and domestic employers.- Services performed in agricultural labor for an employer who employs 10 or more such workers in such services in 20 weeks in either the current or preceding calendar year or pays cash remuneration of $20,000 for such services in any quarter of the current or preceding calendar year, are covered. When agricultural labor is supplied by a crew leader, the employing unit for which the services are performed is the employer of the crew members unless the crew leader is registered under the Farm Labor Contractor Registration Act of 1963, or substantially all of the crew members operate or maintain certain mechanized equipment that is provided by the crew leader. In either of these instances, the crew leader is the employer. Service by aliens prior to 1/1/84 is excluded.
Domestic service.- Domestic service in a private home, local college club, or local chapter of a college fraternity or sorority is covered if performed for an employing unit that paid wages of $1,000 or more for such services in any quarter of the current or preceding calendar year.
Government and nonprofit employers.- Coverage is mandatory for certain nonprofit organizations exempt from income tax who employ four or more individuals for some portion of a day in each of 20 different weeks within either the current or preceding calendar year. Most service performed for the state and its political subdivisions is mandatorily covered.
Nonprofit organizations, Indian tribes or tribal units, and state governmental entities have the option of financing the payment of benefits through the regular contributions method or the reimbursement method. Any state governmental entity may elect the contributions or the reimbursement method. Employers using the reimbursement method are required to make payments equal to the full amount of regular benefits plus 50% (100% for governmental entities) paid to claimant. Bills must be paid not later than 30 days after mailing.
EXCEPTIONS
Wages.- The term wages does not include the following:
Remuneration over $8,000 paid to an individual by employer during any calendar year. Wages paid by employer's predecessor or for employment in another state may be included. Wages in excess of $8,000 may be counted for benefit purposes. Wage base will be increased to correspond with any increase in the federal taxable wage base. The taxable wage base will increase to $9,000 in 2007, and thereafter.
Certain retirement payments.
Payments for sickness or accident disability made over six months after separation.
Payments from, to, or under trust or annuity plan exempt from federal income tax.
Noncash wages for service not in course of employer's trade or business.
Payment of employees' FICA tax without deduction from wages.
Payments made to an employee or his or her beneficiary (a) under a simplified employee pension; (b) under or to an annuity contract, other than a payment for the purchase of such contract that is made by reason of a salary reduction agreement, whether evidenced by a written instrument or otherwise; (c) under or to an exempt governmental deferred compensation plan; (d) to supplement pension benefits under a plan or trust to take into account some portion or all of the increase in the cost of living since retirement, but only if such payments are under a plan treated as a welfare plan; and (e) under a cafeteria benefits plan.
Payments for service performed in the employ of the Army or Air National Guard or as a member of a military reserve unit.
If two or more related corporations or limited liability companies concurrently employ the same individual and compensate him or her through a common paymaster that is one of the corporations or LLCs, each corporation or LLC will be considered to have paid as remuneration to the individual only the amounts actually disbursed by it to him or her and will not be considered to have paid such amounts that were actually disbursed by another of the corporations or LLCs.
Employment.- The term employment does not include the following:
Service not in the course of employer's trade or business, unless cash wages are $50 or more a quarter and employee works on 24 days or more in that or preceding quarter.
Insurance agents or solicitors solely on commission basis.
Newspaper and shopping news carriers under 18, and newspaper and magazine vendors, deliverers, and distributors whose remuneration consists of difference between purchase and sale price and who have contracts stating that their services are not covered.
Organizations exempt from income tax, with respect to service performed in calendar quarter if remuneration is less than $50.
Real estate salespersons solely on commission basis.
Relatives, i.e., service performed by individual in employ of son, daughter, or spouse or by child under 21 in employ of parent.
Service by a student enrolled at a nonprofit or public educational institution in a full-time work study program. Exemption is not applicable to service performed in a program established for an employer or group of employers.
Service for a hospital by a patient of the hospital.
Service covered by federal unemployment compensation system.
Service performed for a motor carrier by a lessor leasing one or more motor vehicles driven by the lessor or one or more drivers provided by the lessor with the motor carrier as lessee.
Service performed for a business engaged in compilation of marketing data bases if such service consists only of the processing of data and is performed in the individual's residence.
Student services if performed for school, college, or university where student is enrolled and attending classes, and services by spouse of the student if spouse's employment is provided under a program of assistance to the student.
Student nurses or interns.
Volunteer research subject paid on a per-study basis for scientific, medical, or drug-related testing for any organization (other than one described in IRC Sec. 501(c)(3)) or any governmental entity.
Agricultural and domestic employers.- Service by aliens prior to 1/1/84 is excluded.
Government and nonprofit employers.- Services for nonprofit organizations and the state do not include the following:
Church or organization operated primarily for religious purposes and which is controlled by a church.
Religious duties of a minister or member of a religious order.
Patients performing services in a rehabilitation facility or sheltered workshop.
Individual receiving unemployment work-relief or work-training under program financed by a federal agency or an agency of a state or political subdivision.
Inmate of custodial or penal institution.
Elected officials.
Members of the legislative body or judiciary.
Members of the Army National Guard or Air National Guard.
Temporary employees serving in case of fire, storm, snow, earthquake, flood or similar emergency.
Individuals serving in certain major nontenured policymaking or advisory positions.
PROCEDURES
Base period.- Four completed quarters immediately preceding first day of individual's benefit year, except that the Commissioner may prescribe a base period consisting of the first four of the last five completed quarters immediately preceding the first day of an individual's benefit year.
Benefit year.- One-year period beginning with first day of first week with respect to which individual first files valid claim for benefits.
Weekly benefit amount.-
For any year beginning on or after 1/1/2008, through 12/31/2010, an individual's weekly benefit amount is 1/2 the average weekly wage rounded down to the nearest $1, but may not exceed the lesser of 1/2 of the state average weekly wage or the previous year's maximum weekly benefit amount plus $10. For 2009, the maximum weekly benefit amount is $308.
For years after 1/1/2011, an individual's weekly benefit amount is 1/2 of the average weekly wage rounded down to the nearest $1, but may not exceed 1/2 of the state average weekly wage.
Maximum total benefits.- Whichever is lesser of (a) 26 times benefit amount or (b)
of wages for each employer per base period quarter.
In addition, during certain periods of high unemployment, payment of extended benefits at a claimant's weekly benefit rate.
Benefit eligibility; Requirements.-
Total wages of $2,500, effective January 1, 2006, in base period, of which at least $800 was paid in each of two quarters (subsequent to filing the claim that establishes the previous benefit year, the individual must have insured work of at least six times his or her weekly benefit amount for the previous year, effective January 1, 2006;
Be able and available for work;
Serve one-week waiting period; and
participate in reemployment services if so required.
Individuals in approved training courses are considered available for work and cannot be denied benefits if otherwise eligible, notwithstanding the disqualification for failure to apply for or accept suitable work.
Disqualifications Period.-
Voluntary leaving without good cause, discharge for misconduct connected with work-week of voluntary leaving or discharge for misconduct, plus 12 additional weeks. Gross, flagrant, and willful misconduct or misconduct that was unlawful-cancellation of wage credits earned prior to discharge for such misconduct. Where a claimant is separated under conditions that would disqualify him or her under these provisions, claimant's total benefit amount based on that employment is reduced by the amount of the disqualification, regardless of the time he or she files a claim; but, with respect to voluntary leaving disqualification, benefit amount based on employment with any employer cannot be reduced to less than one benefit unit.
Voluntarily leaving for sole purpose of accepting previously secured, permanent, full-time, insured work, which the claimant does accept and which offers a reasonable expectation of betterment of wages or working conditions, and at which the individual does earn wages-week of voluntary leaving and not more than one additional week.
Failure to apply for or accept suitable work or return to self-employment-week of occurrence plus 12 weeks; in addition, total benefit amount is reduced by number of weeks of disqualification times weekly benefit amount.
Labor dispute-duration.
Receipt of wages in lieu of notice; dismissal or separation allowance; temporary disability payments under workers' compensation law; primary social security benefits; retirement or retired pay, pension, annuity, or other similar payment under a plan maintained or contributed to by a base period or chargeable employer; gratuity; bonus based on prior length of service paid by employer; or such payment for disability not compensated under workers' compensation law-week for which received, unless less than benefits otherwise due, in which case benefits reduced by amount of such payments. Certain payments to disabled veterans and retirement pensions representing return of payments made by claimant are not deductible.
Receipt of unemployment benefits under other state or federal law -period for which payments are made.
Full-time student attending school-week of unemployment. (Attendance for approved training purposes not disqualifying; also, not disqualifying if major portion of wages during base period were for services performed while actually attending school.)
Failure to disclose earnings for weeks benefits claimed, or failure to disclose or falsification of fact affecting eligibility or disqualification for benefits-all or part of benefit rights based on uncharged wage credits prior to such act canceled.
Instructors, researchers, and principal administrators for an educational institution-disqualified during school vacation periods and paid sabbatical leaves based on service with such an institution.
Nonprofessional employees of educational institutions -disqualified for periods between academic years or terms if reasonable assurance of reemployment in second year or term; retroactive payment of benefits if work not actually offered in second year or term.
Similar disqualifications apply during established and customary school vacation periods and holiday recesses and to employees performing services in an educational institution while employed by an educational service agency.
Professional athletes-disqualified for period between two sport seasons if there is a reasonable assurance that individual will perform services in both such seasons.
Illegal aliens-disqualified for any week of unemployment unless the alien was lawfully admitted to U.S. for permanent residence at the time services were performed, was lawfully present to perform the services or was permanently residing in the U.S. under color of law.
WHAT THE EMPLOYER MUST DO
Pay the standard rate.- 2.5%. No employee tax.
New rate calculations effective in 2006.- Effective January 1, 2006, an employer’s combined tax rate for employers other than employers engaged in the construction industry shall be assigned to one of 20 rate categories with a corresponding experience factor. Eligible experience rated employers shall be assigned to rate categories from highest to lowest according to their experience reserve ratio with category one being assigned to accounts with the highest reserve ratios and category 20 being assigned to accounts with the lowest reserve ratios.
The state’s reserve ratio shall be calculated by dividing the amount available to pay benefits in the Unemployment Trust Fund and the State Unemployment Insurance Trust Fund as of September 30, 2005, and each September 30 thereafter, less any outstanding obligations and amounts appropriated therefrom by the state’s total wages from the four calendar quarters ending on such September 30. For purposes of this section, total wages shall mean all remuneration paid by an employer in employment. The state’s reserve ratio shall be applied to determine the yield factor for the upcoming rate year.
Once the yield factor for the upcoming rate year has been determined, it is multiplied by the amount of unemployment benefits paid from combined tax during the four calendar quarters ending September 30 of the preceding year. The resulting figure is the planned yield for the rate year. The planned yield is divided by the total taxable wages for the four calendar quarters ending September 30 of the previous year and carried to three decimal places to create the average combined tax rate for the rate year.
The average combined tax rate will be assigned to rate category 12. Rates for each of the remaining 19 categories are determined by multiplying the average combined tax rate by the experience factor associated with each category. Employers that are delinquent in filing their combined tax reports as of the date of rate computation shall be assigned to category 20.
Category
|
Combined Tax
|
|---|
1
|
0.00
|
2
|
0.31
|
3
|
0.50
|
4
|
0.57
|
5
|
0.63
|
6
|
0.75
|
7
|
0.82
|
8
|
0.88
|
9
|
1.01
|
10
|
1.13
|
11
|
1.19
|
12
|
1.26
|
13
|
1.32
|
14
|
1.38
|
15
|
1.51
|
16
|
1.70
|
17
|
1.95
|
18
|
2.26
|
19
|
3.44
|
20
|
5.40
|
Beginning January 1, 2006, all nonconstruction industry employers who are not eligible for experience rating will be assigned a tax rate equal to the state’s average tax rate (category 12 on the rate table) or 2.5%, whichever is less. All construction industry employers who are not eligible for experience rating will be assigned a tax rate equal to the highest tax rate (category 20) for the year. These rates will be recalculated each year so an employer cannot expect to have the same rate each of the two years it takes to qualify for experience rating.
Voluntary contributions.- Employers are allowed to make voluntary contributions in order to qualify for a lower tax rate. A voluntary contribution form will be included with the rate notices that are mailed each year. The form will show the amount of voluntary contribution required to qualify for a lower rate. These will only go to employers who are not already at the lowest tax rate and who are not delinquent with any tax reports. Voluntary contributions will be accepted until March 10 each year. This is a change from previous years. In the past years, rate notices were mailed in February, and the voluntary contribution was due March 10. Employers will only be allowed to reduce the tax rate by one step through a voluntary contribution.
SUTA dumping.- If the Commissioner determines that a substantial purpose of a transfer of trade or business was to obtain a lower combined tax rate, then the experience rating accounts of the employers involved shall be combined into a single account and a single rate assigned to such account. If a person is not an employer at the time of the transfer, the employer’s experience account of the acquired business shall not be transferred to such person if the Commissioner finds that the business was acquired solely or primarily for the purpose of obtaining a lower combined tax rate. Instead, such person shall be assigned the new employer combined tax rate.
If a person knowingly violates or attempts to violate the SUTA dumping provisions and the person is an employer, such employer shall be assigned the highest combined tax rate assignable for the rate year during which the violation or attempted violation occurred and for the three rate years immediately following such rate year. However, if the person’s business is already at the highest combined tax rate or if the amount of increase in the combined tax rate would be less than two percent, then a penalty combined tax rate of two percent of taxable wages shall be imposed for the rate year during which the violation or attempted violation occurred and for the three rate years immediately following such year.
Combined tax emergency solvency surcharge.- If the state’s reserve ratio on September 30, 2006, 2007, 2008, or 2009, is less than four-tenths percent, then the Commissioner may, with due regard to the solvency of the Unemployment Trust Fund, after notice and public hearing, impose a combined tax emergency solvency surcharge of not more than one percent of taxable wages paid during the four calendar quarters ending on September 30 of the year that the emergency solvency surcharge is imposed.
DEADLINES
Tax.- Quarterly Wage and Contribution Report, Form UI-11, and contribution owed, are due quarterly on or before last day of following month. If due date falls on Saturday, Sunday or legal holiday, reports may be filed on next business day. Delinquent amounts incur interest at 1.5% per month. Employers must also file Forms UI-11-T and UI-11-W, additional forms in the Form UI-11 report packet, if any changes in the account have occurred. Employers operating from more than one location within the state must also file Form BLS-3020, Multiple Worksite Report, with the wage and contribution report.
Wage.- Quarterly wage reports must also be included on Form UI-11 and must be filed by the same due date for quarterly contribution reports.
ENFORCEMENT
The Nebraska Employment Security Law is administered by the Commissioner of Labor (Sec. 48-606).
If, after due notice, an employer defaults in the payment of combined taxes or payments in lieu of contributions, or interest thereon, the amount due may be collected by (1) civil action in the name of the Commissioner, with the employer adjudged in default paying the costs of such an action; or (2) by setoff against any state income tax refund due the employer (Sec. 48-655).
Should an employer fail to file a report or return required by the Commissioner for the determination of combined taxes, the Commissioner may make such reports or returns or cause them to be made, and determine the combined taxes payable on the basis of such information as he or she may be able to obtain, and will collect the combined taxes as determined together with any interest thereon due. The Commissioner must immediately notify the employer of the assessment in writing by registered or certified mail, and the assessment will be final unless the employer protests the assessment within 15 days after the mailing of the notice. If the employer protests the assessment, it will have an opportunity to be heard by the Commissioner upon written request therefor. After the hearing, the Commissioner must immediately notify the employer, in writing, of his or her finding; the assessment, if any, made by the Commissioner therein will be final upon issuance of such notice (Sec. 48-656).
Special provision is made for civil actions to collect delinquent combined taxes from nonresident employers and resident employers who subsequently leave the state (Sec. 48-655.01).
The state courts are required to entertain actions to collect combined taxes for which liability has accrued under the law of any other state or of the federal government (Sec. 48-655.02).
Records.- The Commissioner and the chair of any appeal tribunal may require from any employer sworn or unsworn reports, with respect to persons employed by it, which are deemed necessary for the effective administration of the law. Information thus obtained is confidential, except to the extent necessary for the proper presentation of a claim. All letters or other matters, oral or written, from an employer or its workers to each other, or to the Commissioner, are privileged communication and may not be made the basis of a suit for slander or libel (Sec. 48-612). The regulations provide that each employer must make such reports as are prescribed on forms issued and required by the Commissioner, and instructions accompanying any such report forms have the force and effect of regulations (DOL Regulations, Title 221).
WHO TO CONTACT
The Nebraska Employment Security Law is administered by the Commissioner of Labor, Division of Employment, 550 S. 16th St., Lincoln, Nebraska 68509-4600. Telephone (402) 471-9000.
RECORDKEEPING
Each employer, whether or not subject to the Employment Security Law, shall keep true and accurate work records, containing such information as the Commissioner of Labor may prescribe. The records shall be open to inspection and subject to being copied by the commissioner or his or her authorized representatives at any reasonable time and as often as may be necessary (Sec. 48-612(1), as amended by L.B. 265, L. 2007, effective July 1, 2007).
The commissioner and the appeal tribunal may require from any such employer any sworn or unsworn reports, with respect to persons employed by it, which he, she, or it deems necessary for the effective administration of the Employment Security Law (Sec. 48-612(1), as amended by L.B. 265, L. 2007, effective July 1, 2007).
Except as otherwise provided in Sec. 7 of L.B. 265, L. 2007, information thus obtained or obtained from any individual pursuant to the administration of the Employment Security Law shall be held confidential (Sec. 48-612(1), as amended by L.B. 265, L. 2007, effective July 1, 2007).
All letters, reports, communications, or any other matters, either oral or written, from an employer or its workers to each other or to the commissioner or any of his or her agents, representatives, or employees which shall have been written or made in connection with the requirements and administration of the Employment Security Law, or the rules and regulations thereunder, shall be absolutely privileged and shall not be made the subject matter or basis for any suit for slander or libel in any court of this state, unless the same is false in fact and malicious in intent (Sec. 48-612(3), as amended by L.B. 265, L. 2007, effective July 1, 2007).
The records must be kept for not less than four complete calendar years (DOL Regulations, Title 221, Ch. 1).
POSTING
Every employer must post and maintain, as well as furnish to individuals who become unemployed, printed statements relative to benefit regulations (Sec. 48-629).
PENALTIES
Any employer or any officer or agent of an employer who fails to file a required quarterly combined tax report and wage schedule by the tenth day of the second month following the end of the calendar quarter must pay a penalty of 0.1% of the total wages paid during the quarter, but not less than $25 nor more than $200. The penalty may be waived for good cause (Sec. 48-656).
Any employer, whether or not subject to the Employment Security Law, or any officer or agent of such an employer or any other person who makes a false statement or representation knowing it to be false, or who knowingly fails to disclose a material fact, to prevent or reduce the payment of benefits to any individual entitled thereto, to obtain benefits for an individual not entitled thereto, to avoid becoming or remaining subject to such law, or to avoid or reduce any contribution or other payment required from an employer under Secs. 48-648 and 48-649, or who willfully fails or refuses to make any such contributions or other payment or to furnish any reports required under the Employment Security Law or to produce or permit the inspection or copying of records as required under such law, shall be guilty of a Class III misdemeanor. Each such false statement or representation or failure to disclose a material fact and each day of such failure or refusal shall constitute a separate offense. An individual employer, partner, corporate officer, or member of a limited liability company or limited liability partnership who willfully fails or refuses to make any combined tax payment shall be jointly and severally liable for the payment of such combined tax and any penalties and interest owed thereon. When an unemployment benefit overpayment occurs, in whole or in part, as the result of a violation of this section by an employer, the amount of the overpayment recovered shall not be credited back to such employer's experience account (Sec. 48-664, as amended by L.B. 265, L. 2007).
Before payment may be made on the final 3% of any contract, for the construction or repair of any public structure or improvement by the state or other governmental units therein, the Commissioner must certify that the contractor or its subcontractor has paid all combined taxes and interest arising thereunder (Sec. 48-657).
Interest.- Combined taxes or payments in lieu of contributions, unpaid on the date on which they are due and payable, bear interest at the rate of one and one-half percent per month from and after such date until payment, plus accrued interest, is received by the Commissioner. However, no interest will be charged subsequent to the date of the erroneous payment of an amount equal to the amount of the delayed payment, into the unemployment trust fund of another state or to the federal government (Sec. 48-655). Interest accrues on and after the day following the due date. For periods of less than a month, interest accrues at the rate of one-thirtieth of one percent for each day or fraction thereof, Sundays and holidays included (DOL Regulations, Title 220, Ch. 8).
Liens.- If an employer defaults in the payment of combined taxes or interest, the Commissioner may have recorded as a secured transaction, as provided in Article 9 of the Uniform Commercial Code, and in the real estate mortgage records of any county in which the employer is engaged in business or owns real or personal property, a statement under oath, showing the amount in default. This statement, when filed, will operate as a lien and mortgage on all of the real and personal property of the employer, subject only to liens of prior record, and the employer's property will be subject to seizure and sale for the payment of the contributions and interest. Such liens on the personal property may be enforced or dissolved in the manner provided by Article 9, Uniform Commercial Code. Such liens on real estate may be enforced or dissolved in the manner provided by Chapter 25, Article 21, of the Revised Statutes of Nebraska (Sec. 48-657).
Bankruptcy.- In the event of any distribution of any employer's assets pursuant to an order of any court under the laws of the state, any claims for combined taxes and interest thereon due or accrued that have not been reduced to a lien must receive the priority of a tax (Sec. 48-659).
<p>Bankruptcy.— In the event of any distribution of any employer's assets pursuant to an order of any court under the laws of the state, any claims for combined ta</p>
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