Local businesses preparing for Nebraska minimum wage increase in 2026

LINCOLN, Neb. (KLKN) — On January 1st, 2026, Nebraska’s minimum wage will increase to $15 an hour.

This is part of an initiative voters passed in 2022 to raise the minimum wage by $1.50 per year through 2026.

Many small businesses in the capital city are preparing for a significant adjustment.

David Chapin, owner of Willmar Electric, said while it doesn’t affect his business, it could lead to changes in the job market.

“The chance for someone else who wants to get a job, and is not just looking at it for the wages,” he said. “They’re looking at getting the opportunity to work alongside that one-to-one mentorship, or one-to-two mentorship. Those things get to be harder and harder.”

The cost of living will also increase starting in 2027, which could lead to the minimum wage rising alongside it.

Although beneficial for some employees, Chapin said it can negatively affect small businesses just starting out.

“As the wage keeps going up and up, I think what you’re going to find is the smaller guy is going to have a harder time competing,” he said. “Getting off the ground as a business, more and more of that will fall onto one person.”

Tipped employees will continue to earn $2.13 per hour, and employers will be responsible for ensuring that the combined wage and tip rate equals the new minimum wage.

Chapin adds that he is already hearing from others about this change, and it could lead to fewer jobs.

“I hear people talk about ‘I can’t afford to pay people $1.50 more an hour, so I have to look at how to cut costs in other ways, ‘” he said. “Sometimes, cutting costs means reducing hours for people and the proprietor themselves stepping in to do more work because the trade-off is just not worth it.”