There is no Nebraska law that requires private sector employers to provide employees sick leave, paid or unpaid, although many employers do grant it as a popular employee benefit.
It is important to remember, however, that if sick leave is promised, an employer may create a legal obligation to grant it. Employers should regularly review statements made in handbooks or elsewhere to ensure that they accurately reflect current policies. If changes are necessary, the policy should be revised and employees notified of the changes.
Paid leave, other than earned but unused vacation leave, is not required to be paid out at the time of separation unless the employer and employee, or the employer and a collective bargaining representative, have specifically agreed otherwise.
However, where an employer combines paid vacation leave with other forms of paid leave (e.g., sick leave under a policy providing for paid time off (PTO)), such that there are no restrictions or conditions on an employee’s ability to take PTO (e.g., all PTO could potentially be used for vacation), all PTO must be paid out upon termination (NE Rev. Stat. Sec. 48-1229(4)).
The Nebraska Supreme Court has ruled that Nebraska’s Wage Payment and Collection Act requires an employer to pay an employee for his or her earned but unused PTO hours, upon separation of employment. This is true even if there is a provision in the employee manual that the employer will not pay for accrued PTO if the employee is terminated. No such rule applies to sick leave-only policies (Fisher v. PayFlex Systems, USA, Inc., and Norton v. PayFlex Systems, USA, Inc., 285 Neb. 808 (May 3, 2013)) (consolidated cases).
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