The Nebraska Workers' Compensation Act allows for penalties, or even possible imprisonment, for employers who fail to provide workers' compensation coverage for their employees. If the employer is found to have failed to purchase workers' compensation insurance, is not self-insured, and is not a member of the risk management pool, any or all of the following penalties may be imposed:
- A civil fine of $1,000.00 for each violation. Each continued failure to secure coverage constitutes a separate violation, making this penalty potentially very costly for the employer.
- Imprisonment for up to one year.
- The employer can also be prohibited from doing business in Nebraska until it complies with the requirement to provide workers' compensation coverage.
If there is no workers' compensation coverage, an injured employee may also sue the employer for damages in district court, where damages are broader and potentially could result in greater compensation to the employee. General damages such as pain and suffering are not allowed under the Nebraska Workers' Compensation Act, but these general damages available as a claim in a district court lawsuit.