Nebraksa Wage Payment and Collection Act: A Message for Employers on What to Know

Occasionally, I have a commercial client who experiences employee theft and moves quickly to terminate the problem employee. Sometimes, after the fact, my client would tell me they were going to withhold the value of the stolen items, sometimes even with the consent of the problem employee.

My response: “Make sure you have that in a written agreement signed by the employee.”

With the exception of payroll taxes, the Nebraska Wage Payment and Collection Act (“WPCA”), Neb. Rev. Stat. §48-122, provides, inter alia, an employer may not withhold from an employee’s paycheck without the employee’s written consent. This requirement holds true even for an employee who has admitted wrongful taking from an employer or when there was no dispute an employee failed to return the employer’s property.

Furthermore, the WPCA provides for attorney’s fees after 30 days if the nonpayment is willful. The employer may be ordered to pay two times the amount of unpaid wages.

In short, without a written agreement, employers should not withhold from a final paycheck. The option to pay and then, if necessary, file a lawsuit against the employee to recover the lost property or its value.

Of course, this could be addressed in a severance agreement, but why wait?  Employers should have this issue addressed in an employment contract and/or an employee manual, with employee consent as part of the contract or part of signing for receipt of the employee manual.

Another frequently cited provision of the WPCA regards a demand for payment of earned vacation time or commissions. The WPCA mandates earned vacation time, even when it is labeled “paid time off” or another variation, must be paid to employees upon their 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.

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

Anytime you are terminating or disciplining an employee, it is wise to consult with an attorney with experience in employment law and small businesses to avoid lawsuits and protect your legacy. If you find yourself in this situation or are looking to avoid these types of problems in your business’s future, call Pirsch Legal Services. With over 25 years of experience in law, our attorneys can help you with all your businesses needs and safeguard your future.