Labor Regulations and Taxes

As a business owner in Nebraska, it’s crucial to prioritize compliance with the state’s employment laws and regulations. Before hiring employees, you should thoroughly familiarize yourself with the requirements related to employment practices, taxation, workplace safety, and anti-discrimination policies. This proactive approach ensures that your business fosters an equitable environment for all workers while maintaining full compliance. To streamline this process, consider exploring the resources and guidance provided by the organizations below.

By leveraging the expertise and resources of these organizations, you can gain a comprehensive understanding of your obligations as an employer and implement appropriate measures to create a fair and legally compliant workplace.

Nebraska Department of Labor (NDOL) & Workforce Development Organizations

The Nebraska Department of Labor (NDOL) and other workforce development agencies provide a range of services related to employment, workforce development, workplace safety, labor laws, unemployment insurance, and labor market information. Explore the NDOL website to learn more about these important areas.


Unemployment Insurance Tax

As an entrepreneur operating a business in Nebraska,  familiarize yourself with Nebraska’s unemployment insurance tax obligations. This tax serves as a source of funding for Nebraska’s unemployment insurance program, which provides temporary financial assistance to eligible employees who have been laid off or terminated through no fault of their own.

To ascertain whether your business is mandated to pay unemployment insurance tax, you should consult the comprehensive guidelines on coverage requirements outlined by the Nebraska Department of Labor (NDOL). In general, most employers with one or more employees working within Nebraska are subject to this tax obligation.

For detailed information on unemployment insurance tax requirements, application procedures, and related resources, we encourage you to visit NDOL’s dedicated webpage on this topic.


Nebraska Department of Health and Human Services (DHHS)

The Department of Health and Human Services (DHHS) requires all employers to report newly hired employees to enforce child support orders and prevent fraudulent claims for benefits. As an employer, you are obligated to report specific information about each newly hired employee to the DHHS within 20 days of their hire date.


Internal Revenue Service (IRS)

Learn about employment taxes for small businesses and the different types of employment taxes that must be reported, including independent contractors. Employment taxes encompass various types of taxes that must be reported and paid to federal and state authorities. Here’s an overview of the different types of employment taxes you should be aware of:

Federal Income Tax Withholding: Employers are responsible for withholding a portion of their employees’ wages for federal income tax purposes.

Self-Employment Tax: For individuals who are self-employed or operate their own businesses, they are responsible for paying a specific tax known as the self-employment tax. This tax serves a similar purpose to the Social Security and Medicare taxes that are typically withheld from the paychecks of traditional employees.

Federal Unemployment Tax (FUTA): Employers must pay FUTA tax to fund the federal unemployment compensation program.

Independent Contractor Taxes: If you hire independent contractors, you may be required to report their earnings and withhold taxes depending on their classification and the state’s regulations. (i.e. 1099 contractors)


Social Security Administration

Both employers and employees are required to contribute to Social Security and Medicare taxes, collectively known as FICA taxes. Employers must withhold the employee’s share of these taxes from their wages and match it with an equal contribution. Employers are required to send Copy A of Form W-2 to Social Security to report the wages and taxes of their employees for the previous calendar year. Form W-2 must be given to each employee. Forms W-2 are sent to Social Security along with a Form W-3.