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LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 941
Introduced by Lippincott, 34.
Read first time January 09, 2026
Committee: Business and Labor
A BILL FOR AN ACT relating to franchises; to amend sections 48-114,1
48-116, 48-603, 48-1102, 48-1202, 48-1229, and 48-1231, Reissue2
Revised Statutes of Nebraska; to define and redefine terms; to3
exclude certain franchisors from being considered employers of4
franchisees and franchisees' employees as provided; and to repeal5
the original sections. 6
Be it enacted by the people of the State of Nebraska,7
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Section 1. (1) For purposes of this section: 1
(a) Franchise has the same meaning as in 16 C.F.R. 436.1;2
(b) Franchisee has the same meaning as in 16 C.F.R. 436.1; and3
(c) Franchisor has the same meaning as in 16 C.F.R. 436.1.4
(2) Except as provided in subsection (3) of this section, a5
franchisor shall not be considered an employer of a franchisee or a6
franchisee's employees. 7
(3)(a) A franchisor shall be considered an employer of a franchisee8
or a franchisee's employees if the franchisor exercises direct and9
immediate control over one or more essential terms or conditions of10
employment of the franchisee or franchisee's employees.11
(b) A franchisor exercises direct and immediate control over one or12
more essential terms or conditions of employment of a franchisee or13
franchisee's employees if the franchisor: 14
(i) Determines the wage rate, salary, or other rate of pay that is15
paid to a franchisee's individual employees or job classifications;16
(ii) Determines the fringe benefits to be provided or offered to a17
franchisee's employees. A franchisor does not exercise direct and18
immediate control by permitting a franchisee under an arm's length19
contract to participate in such franchisor's benefits plan, including a20
health benefits plan, pension plan, and tuition assistance;21
(iii) Determines work schedules or the work hours of a franchisee's22
employees. A franchisor does not exercise direct and immediate control23
over scheduling by establishing a franchisee's operating hours or by24
establishing minimum staffing levels to satisfy the franchise's service25
standards; 26
(iv) Determines which particular employees will be hired or which27
employees will not be hired. A franchisor does not exercise direct and28
immediate control by encouraging or recommending changes in staffing29
levels or by setting minimal recruiting or hiring standards, including30
those required by law for consumer or employee safety or for brand31
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protection; 1
(v) Decides to terminate the employment of, suspend, or discipline a2
franchisee's employee. A franchisor does not exercise direct and3
immediate control by bringing misconduct or poor performance to the4
attention of a franchisee, by expressing a negative opinion of a5
franchisee's employee, or by setting minimal standards of performance or6
conduct; 7
(vi) Consistently and directly instructs a franchisee's employees on8
how to perform work or by issuing employee performance appraisals. A9
franchisor does not exercise direct and immediate control if the10
franchisor (A) offers instructions that are limited and routine, (B) sets11
brand standards for the performance of work, (C) offers training12
materials for a franchisee to use to train such franchisee's employees,13
(D) establishes minimum training requirements for a franchisee's14
employees, or (E) provides operational support, guidance, and assistance15
to the franchisee to promote and protect the brand's goodwill and quality16
of products and services provided to a consumer; or17
(vii) Assigns particular employees of a franchisee to individual18
work schedules, positions, and tasks. A franchisor does not exercise19
direct and immediate control by offering resources and tools for a20
franchisee to consider using to direct such franchisee's employees'21
individual work schedule, position, or tasks. 22
Sec. 2. Section 48-114, Reissue Revised Statutes of Nebraska, is23
amended to read: 24
48-114 (1) The following shall constitute employers subject to the25
Nebraska Workers' Compensation Act: (a) (1) The state and every26
governmental agency created by it; and (b) (2) every person, firm, or27
corporation, including any public service corporation, who is engaged in28
any trade, occupation, business, or profession as described in section29
48-106, and who has any person in service under any contract of hire,30
express or implied, oral or written. 31
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(2) A franchisor shall not be considered an employer subject to the1
Nebraska Workers' Compensation Act unless such franchisor is considered2
an employer under section 1 of this act. 3
Sec. 3. Section 48-116, Reissue Revised Statutes of Nebraska, is4
amended to read: 5
48-116 (1) Any person, firm, or corporation creating or carrying6
into operation any scheme, artifice, or device to enable him or her,7
them, or it to execute work without being responsible to the workers for8
the provisions of the Nebraska Workers' Compensation Act shall be9
included in the term employer, and with the immediate employer shall be10
jointly and severally liable to pay the compensation herein provided for11
and be subject to all the provisions of such act. 12
(2) This section, however, shall not be construed as applying to (a)13
an owner who lets a contract to a contractor in good faith, or a14
contractor, who, in good faith, lets to a subcontractor a portion of his15
or her contract, if the owner or principal contractor, as the case may16
be, requires the contractor or subcontractor, respectively, to procure a17
policy or policies of insurance from an insurance company licensed to18
write such insurance in this state, which policy or policies of insurance19
shall guarantee payment of compensation according to the Nebraska20
Workers' Compensation Act to injured workers or (b) a franchisor except21
if such franchisor is considered an employer under section 1 of this act.22
Sec. 4. Section 48-603, Reissue Revised Statutes of Nebraska, is23
amended to read: 24
48-603 As used in the Employment Security Law, unless the context25
clearly requires otherwise, employer shall mean: 26
(1) Any individual or type of organization, including any27
partnership, limited liability company, association, trust, estate,28
joint-stock company, insurance company or corporation, whether domestic29
or foreign, or the receiver, trustee in bankruptcy, trustee or successor30
thereof, or the legal representative of a deceased person, which for some31
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portion of a day but not necessarily simultaneously in each of twenty1
different calendar weeks, whether or not such weeks are or were2
consecutive, within either the current or preceding calendar year, and3
for the purpose of this definition, if any week includes both December 314
and January 1, the days up to January 1 shall be deemed one calendar week5
and the days beginning January 1 another such week, has or had in6
employment one or more individuals, irrespective of whether the same7
individuals are or were employed in each such day; all individuals8
performing services for any employer of any person in this state, who9
maintains two or more separate establishments within this state, shall be10
deemed to be employed by a single employer; any artifice or device,11
including any contract or subcontract, by an employer for the performance12
of work, which is a part of such employer's usual trade, occupation,13
profession, or business, entered into for the purpose or with the intent14
of evading the application of this section to such employer, is hereby15
prohibited and declared to be unlawful; 16
(2) Any employer of any person in this state who in any calendar17
quarter in either the current or preceding calendar year has paid wages18
for employment in the total sum of fifteen hundred dollars or more;19
(3) Any individual or employer of any person in this state which20
acquired the organization, trade, or business, or substantially all the21
assets thereof, of another employer which, at the time of such22
acquisition, was an employer subject to the Employment Security Law;23
(4) Any employer of any person in this state, which acquired the24
organization, trade, or business, or substantially all the assets25
thereof, of another employer of any person in this state, not an employer26
subject to such law, and which, if subsequent to such acquisition it were27
treated as a single unit with such other employer, would be an employer28
under subdivision (1) or (2) of this section; 29
(5) Any employer of any person in this state which, having become an30
employer under any provision of the Employment Security Law and which has31
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not, under section 48-661, ceased to be an employer subject to such law;1
(6) For the effective period of its election pursuant to section2
48-661, any other employer of any person in this state who has elected to3
become fully subject to the Employment Security Law;4
(7) Any employer of any person in this state not an employer by5
reason of any other subdivision of this section (a) for which services in6
employment are or were performed with respect to which such employer is7
liable for any federal tax against which credit may be taken for8
contributions required to be paid into a state unemployment compensation9
fund; or (b) which, as a condition for approval of the Employment10
Security Law for full tax credit against the tax imposed by the Federal11
Unemployment Tax Act, is required, pursuant to such act, to be an12
employer under the Employment Security Law; 13
(8) The state or any political subdivision thereof and any14
instrumentality of any one or more of the foregoing;15
(9) Any organization for which service in employment as defined in16
subdivision (4)(b) of section 48-604 is performed;17
(10) Any individual or employing unit for which service in18
employment as defined in subdivision (4)(c) of section 48-604 is19
performed; 20
(11) Any individual or employing unit for which service in21
employment as defined in subdivision (4)(d) of section 48-604 is22
performed; and 23
(12)(a) In determining whether or not an employing unit for which24
service other than domestic service is also performed is an employer25
under subdivision (1) or (10) of this section, the wages earned or the26
employment of an employee performing domestic service shall not be taken27
into account; and 28
(b) In determining whether or not an employing unit for which29
agricultural labor is also performed is an employer under subdivision30
(11) of this section, the wages earned or the employment of an employee31
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performing services in agricultural labor shall not be taken into1
account. If an employing unit is determined an employer of agricultural2
labor, such employing unit shall be determined an employer for the3
purposes of subdivision (1) of this section; and . 4
(13) A franchisor only if such franchisor is considered an employer5
under section 1 of this act. 6
Sec. 5. Section 48-1102, Reissue Revised Statutes of Nebraska, is7
amended to read: 8
48-1102 For purposes of the Nebraska Fair Employment Practice Act,9
unless the context otherwise requires: 10
(1) Person shall include one or more individuals, labor unions,11
partnerships, limited liability companies, associations, corporations,12
legal representatives, mutual companies, joint-stock companies, trusts,13
unincorporated organizations, trustees, trustees in bankruptcy, or14
receivers; 15
(2) Employer shall mean a person engaged in an industry who has16
fifteen or more employees for each working day in each of twenty or more17
calendar weeks in the current or preceding calendar year, any agent of18
such a person, and any party whose business is financed in whole or in19
part under the Nebraska Investment Finance Authority Act regardless of20
the number of employees and shall include the State of Nebraska,21
governmental agencies, and political subdivisions, but such term shall22
not include (a) the United States, a corporation wholly owned by the23
government of the United States, or an Indian tribe , or (b) a bona fide24
private membership club, other than a labor organization, which is exempt25
from taxation under section 501(c) of the Internal Revenue Code, or (c) a26
franchisor if such franchisor is not considered an employer under section27
1 of this act; 28
(3) Labor organization shall mean any organization which exists29
wholly or in part for one or more of the following purposes: Collective30
bargaining; dealing with employers concerning grievances, terms, or31
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conditions of employment; or mutual aid or protection in relation to1
employment; 2
(4) Employment agency shall mean any person regularly undertaking3
with or without compensation to procure employees for an employer or to4
procure for employees opportunities to work for an employer and shall5
include an agent of such a person but shall not include an agency of the6
United States, except that such term shall include the United States7
Employment Service and the system of state and local employment services8
receiving federal assistance; 9
(5) Covered entity shall mean an employer, an employment agency, a10
labor organization, or a joint labor-management committee;11
(6) Privileges of employment shall mean terms and conditions of any12
employer-employee relationship, opportunities for advancement of13
employees, and plant conveniences; 14
(7) Employee shall mean an individual employed by an employer;15
(8) Commission shall mean the Equal Opportunity Commission;16
(9) Disability shall mean (a) a physical or mental impairment that17
substantially limits one or more of the major life activities of such18
individual, (b) a record of such an impairment, or (c) being regarded as19
having such an impairment. Disability shall not include homosexuality,20
bisexuality, transvestism, transsexualism, pedophilia, exhibitionism,21
voyeurism, gender-identity disorders not resulting in physical22
impairments, other sexual behavior disorders, problem gambling,23
kleptomania, pyromania, or psychoactive substance use disorders resulting24
from current illegal use of drugs; 25
(10)(a) Qualified individual with a disability shall mean an26
individual with a disability who, with or without reasonable27
accommodation, can perform the essential functions of the employment28
position that such individual holds or desires. Consideration shall be29
given to the employer's judgment as to what functions of a job are30
essential, and if an employer has prepared a written description before31
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advertising or interviewing applicants for the job, this description1
shall be considered evidence of the essential functions of the job;2
(b) Qualified individual with a disability shall not include any3
employee or applicant who is currently engaged in the illegal use of4
drugs when the covered entity acts on the basis of such use; and5
(c) Nothing in this subdivision shall be construed to exclude as a6
qualified individual with a disability an individual who:7
(i) Has successfully completed a supervised drug rehabilitation8
program or otherwise been rehabilitated successfully and is no longer9
engaging in the illegal use of drugs; 10
(ii) Is participating in a supervised rehabilitation program and is11
no longer engaging in such use; or 12
(iii) Is erroneously regarded as engaging in such use but is not13
engaging in such use; 14
(11) Reasonable accommodation, with respect to disability, shall15
include making existing facilities used by employees readily accessible16
to and usable by individuals with disabilities, job restructuring, part-17
time or modified work schedules, reassignment to a vacant position,18
acquisition or modification of equipment or devices, appropriate19
adjustment or modification of examinations, training manuals, or20
policies, the provision of qualified readers or interpreters, and other21
similar accommodations for individuals with disabilities. Reasonable22
accommodation, with respect to pregnancy, childbirth, or related medical23
conditions, shall include acquisition of equipment for sitting, more24
frequent or longer breaks, periodic rest, assistance with manual labor,25
job restructuring, light-duty assignments, modified work schedules,26
temporary transfers to less strenuous or hazardous work, time off to27
recover from childbirth, or break time and appropriate facilities for28
breast-feeding or expressing breast milk. Reasonable accommodation shall29
not include accommodations which the covered entity can demonstrate30
require significant difficulty or expense thereby posing an undue31
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hardship upon the covered entity. Factors to be considered in determining1
whether an accommodation would pose an undue hardship shall include:2
(a) The nature and the cost of the accommodation needed under the3
Nebraska Fair Employment Practice Act; 4
(b) The overall financial resources of the facility or facilities5
involved in the provision of the reasonable accommodation, the number of6
persons employed at such facility, the effect on expenses and resources,7
or the impact otherwise of such accommodation upon the operation of the8
facility; 9
(c) The overall financial resources of the covered entity, the10
overall size of the business of a covered entity with respect to the11
number of its employees, and the number, type, and location of its12
facilities; and 13
(d) The type of operation or operations of the covered entity,14
including the composition, structure, and functions of the work force of15
such entity, and the geographic separateness and administrative or fiscal16
relationship of the facility or facilities in question to the covered17
entity; 18
(12) Marital status shall mean the status of a person whether19
married or single; 20
(13) Because of sex or on the basis of sex shall include, but not be21
limited to, because of or on the basis of pregnancy, childbirth, or22
related medical conditions; 23
(14) Harass because of sex shall include making unwelcome sexual24
advances, requesting sexual favors, and engaging in other verbal or25
physical conduct of a sexual nature if (a) submission to such conduct is26
made either explicitly or implicitly a term or condition of an27
individual's employment, (b) submission to or rejection of such conduct28
by an individual is used as the basis for employment decisions affecting29
such individual, or (c) such conduct has the purpose or effect of30
unreasonably interfering with an individual's work performance or31
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creating an intimidating, hostile, or offensive working environment;1
(15) Unlawful under federal law or the laws of this state shall mean2
acting contrary to or in defiance of the law or disobeying or3
disregarding the law; 4
(16) Drug shall mean a controlled substance as defined in section5
28-401; 6
(17) Illegal use of drugs shall mean the use of drugs, the7
possession or distribution of which is unlawful under the Uniform8
Controlled Substances Act, but shall not include the use of a drug taken9
under supervision by a licensed health care professional or any other use10
authorized by the Uniform Controlled Substances Act or other provisions11
of state law; 12
(18) Individual who is pregnant, who has given birth, or who has a13
related medical condition shall mean an individual with a known14
limitation who, with or without reasonable accommodation, can perform the15
essential functions of the employment position that such individual16
holds, desires, or may be temporarily assigned to. Consideration shall be17
given to the employer's judgment as to what functions of a job are18
essential, and if an employer has prepared a written description before19
advertising or interviewing applicants for the job, this description20
shall be considered evidence of the essential functions of the job;21
(19) Race is inclusive of characteristics such as skin color, hair22
texture, and protective hairstyles; and 23
(20) Protective hairstyles includes braids, locks, and twists.24
Sec. 6. Section 48-1202, Reissue Revised Statutes of Nebraska, is25
amended to read: 26
48-1202 For purposes of the Wage and Hour Act, unless the context27
otherwise requires: 28
(1) Employ shall include to permit to work; 29
(2) Employer shall include any individual, partnership, limited30
liability company, association, corporation, business trust, legal31
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representative, or organized group of persons employing four or more1
employees at any one time except for seasonal employment of not more than2
twenty weeks in any calendar year, acting directly or indirectly in the3
interest of an employer in relation to an employee, but shall not include4
(a) the United States, the state, or any political subdivision thereof or5
(b) a franchisor if such franchisor is not considered an employer under6
section 1 of this act; 7
(3) Employee shall include any individual employed by any employer8
but shall not include: 9
(a) Any individual employed in agriculture; 10
(b) Any individual employed as a baby-sitter in or about a private11
home; 12
(c) Any individual employed in a bona fide executive,13
administrative, or professional capacity or as a superintendent or14
supervisor; 15
(d) Any individual employed by the United States or by the state or16
any political subdivision thereof; 17
(e) Any individual engaged in the activities of an educational,18
charitable, religious, or nonprofit organization when the employer-19
employee relationship does not in fact exist or when the services20
rendered to such organization are on a voluntary basis;21
(f) Apprentices and learners otherwise provided by law;22
(g) Veterans in training under supervision of the United States23
Department of Veterans Affairs; 24
(h) A child in the employment of his or her parent or a parent in25
the employment of his or her child; or 26
(i) Any person who, directly or indirectly, is receiving any form of27
federal, state, county, or local aid or welfare and who is physically or28
mentally disabled and employed in a program of rehabilitation, who shall29
receive a wage at a level consistent with his or her health, efficiency,30
and general well-being; 31
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(4) Occupational classification shall mean a classification1
established by the Dictionary of Occupational Titles prepared by the2
United States Department of Labor; and 3
(5) Wages shall mean all remuneration for personal services,4
including commissions and bonuses and the cash value of all remunerations5
in any medium other than cash. 6
Sec. 7. Section 48-1229, Reissue Revised Statutes of Nebraska, is7
amended to read: 8
48-1229 For purposes of the Nebraska Wage Payment and Collection9
Act, unless the context otherwise requires: 10
(1) Employee means any individual permitted to work by an employer11
pursuant to an employment relationship or who has contracted to sell the12
goods or services of an employer and to be compensated by commission.13
Services performed by an individual for an employer shall be deemed to be14
employment, unless it is shown that (a) such individual has been and will15
continue to be free from control or direction over the performance of16
such services, both under his or her contract of service and in fact, (b)17
such service is either outside the usual course of business for which18
such service is performed or such service is performed outside of all the19
places of business of the enterprise for which such service is performed,20
and (c) such individual is customarily engaged in an independently21
established trade, occupation, profession, or business. This subdivision22
is not intended to be a codification of the common law and shall be23
considered complete as written; 24
(2)(a) (2) Employer means the state or any individual, partnership,25
limited liability company, association, joint-stock company, trust,26
corporation, political subdivision, or personal representative of the27
estate of a deceased individual, or the receiver, trustee, or successor28
thereof, within or without the state, employing any person within the29
state as an employee. ; 30
(b) A franchisor shall not be considered an employer unless such31
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franchisor is considered an employer under section 1 of this act;1
(3) Federally insured financial institution means a state or2
nationally chartered bank or a state or federally chartered savings and3
loan association, savings bank, or credit union whose deposits are4
insured by an agency of the United States Government;5
(4) Fringe benefits includes sick and vacation leave plans,6
disability income protection plans, retirement, pension, or profit-7
sharing plans, health and accident benefit plans, and any other employee8
benefit plans or benefit programs regardless of whether the employee9
participates in such plans or programs; 10
(5) Payroll debit card means a stored-value card issued by or on11
behalf of a federally insured financial institution that provides an12
employee with immediate access for withdrawal or transfer of his or her13
wages through a network of automatic teller machines. Payroll debit card14
includes payroll debit cards, payroll cards, and paycards; and15
(6) Wages means compensation for labor or services rendered by an16
employee, including fringe benefits, when previously agreed to and17
conditions stipulated have been met by the employee, whether the amount18
is determined on a time, task, fee, commission, or other basis. Paid19
leave, other than earned but unused vacation leave, provided as a fringe20
benefit by the employer shall not be included in the wages due and21
payable at the time of separation, unless the employer and the employee22
or the employer and the collective-bargaining representative have23
specifically agreed otherwise. Unless the employer and employee have24
specifically agreed otherwise through a contract effective at the25
commencement of employment or at least ninety days prior to separation,26
whichever is later, wages includes commissions on all orders delivered27
and all orders on file with the employer at the time of separation of28
employment less any orders returned or canceled at the time suit is29
filed. 30
Sec. 8. Section 48-1231, Reissue Revised Statutes of Nebraska, is31
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amended to read: 1
48-1231 (1) An employee having a claim for wages which are not paid2
within thirty days of the regular payday designated or agreed upon may3
institute suit for such unpaid wages in the proper court. If an employee4
establishes a claim and secures judgment on the claim, such employee5
shall be entitled to recover the full amount of the judgment and all6
costs of such suit, including reasonable attorney's fees. If the cause is7
taken to an appellate court and the employee recovers a judgment, the8
appellate court shall award reasonable attorney's fees to the employee.9
If the employee fails to recover a judgment in excess of the amount that10
may have been tendered within thirty days of the regular payday by an11
employer, such employee shall not recover the attorney's fees provided by12
this subsection. If the court finds that no reasonable dispute existed as13
to the fact that wages were owed or as to the amount of such wages, the14
court may order the employee to pay the employer's attorney's fees and15
costs of the action as assessed by the court. 16
(2) If an employee works for an employer that is not subject to the17
Nebraska Fair Employment Practice Act and such employee is aggrieved by a18
violation of section 48-1235, the employee may bring a suit against such19
employer in the proper court to recover the damages sustained by reason20
of such violation. If an employee prevails in a suit brought pursuant to21
this subsection, such employee shall be entitled to recover the full22
amount of the judgment and all costs of such suit, including reasonable23
attorney's fees. If the cause is taken to an appellate court and the24
employee recovers a judgment, the appellate court shall award reasonable25
attorney's fees to the employee. 26
(3) An employer who fails to furnish a wage statement under27
subsection (2) of section 48-1230 shall be guilty of an infraction as28
defined in section 29-431 and shall be subject to a fine pursuant to29
section 29-436. 30
(4) If an employee institutes suit against an employer under31
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subsection (1) or (2) of this section, any citation that is issued1
against such employer under section 48-1234 and that relates directly to2
the facts in dispute shall be admitted into evidence unless specifically3
excluded by the court. If a citation has been contested as described in4
subsection (3) of section 48-1234, it shall not be admitted into evidence5
under this subsection until after such contest has been resolved.6
(5) A franchisor shall not be liable for wages owed by a franchisee7
unless such franchisor is considered an employer under section 1 of this8
act. 9
Sec. 9. Original sections 48-114, 48-116, 48-603, 48-1102, 48-1202,10
48-1229, and 48-1231, Reissue Revised Statutes of Nebraska, are repealed.11
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