Nebraska
Workers' Comp Exemption

Nebraska’s general employer trigger is one employee

Neb. Rev. Stat. §48-106 says the Act applies to resident employers and nonresident employers performing work in Nebraska when they employ one or more employees in the employer’s regular trade, business, profession, or vocation, subject to the statute’s listed exceptions.

The Nebraska Workers’ Compensation Court likewise tells workers that most Nebraska employers must have workers’ compensation insurance. An owner’s own excluded status does not erase this rule for employees who work for the business.

For a small business, the practical first question is whether anyone besides an excluded owner is an employee. If the answer is yes, the employer generally needs insurance or another authorized way to secure compensation under §48-145.

Individual employers, partners, and LLC members elect in rather than filing an exemption certificate

Section 48-115 identifies an individual employer, partner, LLC member, or self-employed person who is actually engaged in the business on a substantially full-time basis as someone who may elect to bring themself within the Act. The election is written and filed with the workers’ compensation insurer.

That structure means the owner is not waiting for the state to issue a generic exemption card. The owner begins outside the statutory employee definition in the qualifying fact pattern and chooses personal workers’ compensation coverage through the insurer when protection is desired.

The company’s employees remain separate. An LLC member can stay outside personal coverage while the LLC insures employees; a sole proprietor can elect personal coverage while also maintaining the employee policy that the business already needs.

The 25% corporate ownership line changes an executive officer’s default status

Nebraska draws a clear line for corporate executive officers. An executive officer who owns less than 25% of the corporation’s common stock is an employee under the Act. An executive officer who owns 25% or more is not an employee unless that officer elects coverage.

For the 25% or greater officer, the written election is filed with both the corporate secretary and the workers’ compensation insurer. The election becomes effective when the insurer receives it.

Because stock ownership controls the default status, capitalization changes matter. An officer who falls below 25% can move into employee status even though the title remains unchanged, while an officer who crosses above 25% should review whether personal coverage is still intended.

Nebraska owner elections follow the insurer until they are terminated or coverage ends

Section 48-115 states that a qualifying owner election remains effective for the current policy and subsequent policies issued by the same insurer. It continues until the owner terminates the election in writing or the insurer ceases to provide workers’ compensation coverage for the business.

This is not an annual certificate-renewal system. A new policy with the same insurer can carry the election forward, while a carrier change is a natural point to verify whether the election is still documented correctly.

For a corporate executive officer, a termination is also filed with the corporate secretary. Where a professional employer organization and master policy are involved, the statute adds filing rules that make it even more important to preserve the actual election record rather than relying on an informal owner memo.

Agriculture is a real exception, but the employee-count conditions are specific

Nebraska’s one-employee rule has statutory exceptions. Section 48-106 excludes certain agricultural employment, including an agricultural employer with only related employees and, under specified conditions, an employer with unrelated agricultural employees who stays below the statute’s ten-unrelated-full-time-employee test for thirteen calendar weeks.

That exception is narrower than saying “farm workers are exempt.” The statute contains detailed conditions and notice consequences, so an agricultural business should apply the actual text to its workforce rather than importing the ordinary business rule or assuming every farm is outside the Act.

For a construction, retail, service, or other non-agricultural business, this agriculture exception generally does not supply a workaround. The normal one-employee rule remains the starting point.

The first hire, stock change, or insurer change are Nebraska reset events

An owner-only sole proprietorship, partnership, or LLC can move into mandatory employer coverage when it hires its first covered employee. The owner’s own election status and the company’s obligation to cover that worker should be reviewed separately.

A corporation should monitor stock ownership of executive officers because the 25% line changes default employee status. A change in title without a stock change may have no effect, while a stock transaction can change workers’ compensation treatment immediately.

Finally, review owner elections whenever the insurer changes. Nebraska’s statute ties continuation to policies issued by the same insurer, so a carrier replacement is not the time to assume an old election simply follows the company without verification.

What willfully failing to insure actually costs in Nebraska

Nebraska reaches past the business entity itself and can put the individual who controlled the decision on the hook personally, in addition to fining the company.

A willful failure to secure required coverage can draw a monetary penalty of up to $1,000 per violation, and each day of continued failure counts as a separate violation. The court may also enjoin the employer from doing business in the state until it complies.

If the employer is a corporation, LLC, or LLP, any officer, member, manager, or partner who had the authority to secure coverage and willfully failed to do so is individually guilty of a Class I misdemeanor, and is personally liable — jointly and severally with the company — for any compensation that accrues under the Act.

• Willful failure: up to $1,000 per violation, with each day counted separately
• Court can enjoin the business from operating in Nebraska until it complies
• Responsible officers/managers/members personally liable and individually guilty of a Class I misdemeanor