State lawmakers and governors around the country took action on occupational licenses as the 2019 legislative sessions got underway. This week, the Way canvases the topic and takes a closer look at the impact of occupational licensing on industry, the economy, and state administrative bodies.
KNOW HOW FAST YOU WERE GOING?
Researchers at Utah State University estimate that one-fifth to one third of all U.S. workers now require a license to legally work. The U.S. Census Bureau’s 2016 Current Population Survey (CPS) finds that, among employed civilians, 22.3 percent held an active license in 2016, compared to 4.5 percent in the 1950s. The Institute for Justice at the University of Minnesota’s Humphrey School of Public Affairs reports that licensing laws cost the economy nearly 2 million jobs and up to $184 billion, a figure that has resonated with both the prior Obama administration and the Trump administration.
In Ohio, Governor John Kasich signed a bill requiring the state legislature to review all licensing boards at least once every six years to ensure there is a continued public need for the licensing rules. The legislature will also be tasked with determining whether “one-size-fits-all” licenses are the least restrictive form of regulation for specific professions. In terms of the scale and scope of the issue, the University of Minnesota reports that 18% of the Ohio workforce, or 935,000 Ohioans require a license to work, at an estimated cost to the Buckeye State economy of more than $6 billion.
MAKING FOR THE STATE LINE
Lawmakers in Idaho introduced legislation that would provide alternative routes to licensing inside the construction trades. Similar reform efforts are underway in Wisconsin, and Michigan. In Arizona, Governor Doug Ducey announced his plan to install universal occupational licensing that would allow licensed workers from any state to transfer their licenses there. In his State of the State address, Governor Ducey called for Arizona licensing boards to recognize occupational licenses granted in other states. This is consistent with spouses of military personnel deployed to Arizona and with a nationwide initiative of Karen Pence, wife of Vice President Mike Pence.
This summer, the Congress passed and the President signed into law the Strengthening Career and Technical Education for the 21st Century Act, which allow states to use federal education funds to identify and examine licenses or certifications that pose an unwarranted barrier to entry into the workforce. Proponents of occupational licensing reform laud the bipartisan measure, citing the value of occupational licensing policies are aligned with their public safety objectives and do not impair economic opportunity for workers throughout the United States. We’ll keep a close eye on occupational licensing issues affecting our industry this term.
Long Haul Trucking
The U.S. Supreme Court ruled this week in favor of owner-operators in a dispute about whether drivers can file class-action lawsuits against trucking firms. The case revolved around the distinction between independent contractors and employees. The unanimous decision came in a case filed by a long-haul driver who alleged the company failed to pay him and other workers the legal minimum wage and falsely classified them as contractors rather than employees to avoid labor law rules. The trucking firm contended that its drivers could not sue because they had signed contracts agreeing to arbitrate any claims privately, waiving their right to litigate.
Coalitions of independent contractors lauded the decision, citing that contractors are often not subject to statutes covering such issues as minimum wage, overtime, discrimination, sexual harassment, wrongful termination, and workplace injuries. Lawsuits over worker classification have multiplied in recent decades across varied industries, including gig economy providers. We will continue to track these evolving workplace issues.
Making Our Way Around the Country
The ongoing federal government shutdown is affecting product recalls, which are normally announced by the U.S. Consumer Product Safety Commission (CPSP). Only 20 members of the CPSC's staff of 550 are working during the shutdown. The employees are working only on recalls of products that "create a substantial and immediate threat to the safety of human life." The CPSC has taken no action on two active recalls, although the manufacturers responsible have issued recalls on their own and have engaged with government agencies in other countries. The CPSC online recall page has not been updated since December 20th and the agency’s Twitter account has not been updated since December 26th.
A rules committee of the Pennsylvania Supreme Court is considering a proposal that would undo an early 2000s rule that requires medical malpractice lawsuits to be filed in the county where the alleged injury occurred. The proposed rule would align the Keystone State’s medical malpractice rules to more traditional tort rules on venue, which allow victims to file lawsuits in any county where the defendant does business. Critics suggest the proposed rule would make it more likely for injured patients to file suit in urban centers of Pennsylvania, where most of the state’s hospitals and providers conduct business, and where juries have tended to award higher verdicts. The public comment period runs through February 22, 2019.
California now prohibits automobile insurance carriers from considering a person’s gender when assessing risk factors for car insurance. Under rules promulgated by the state’s outgoing Insurance Commissioner Dave Jones, carriers are permitted to prioritize criteria like drivers’ safety records, years of experience, and optional factors like marital status, when setting auto rates. Gender had been among the optional criteria. In announcing the change, the Insurance Commissioner said the new regulations “ensure that auto insurance rates are based on factors within a driver’s control, rather than personal characteristics over which drivers have no control.”
NOT A DROP TO DRINK
Back to our main story this week, wine aficionados are watching the U.S. Supreme Court this week, which heard arguments from wine sellers about an occupational licensing dispute in Tennessee. The Tennessee law requires a two-year residency to obtain an initial liquor retail license, and a 10-year residency for a renewal. Two lower courts ruled that this violates the Commerce Clause of the Constitution by discriminating against out-of-state businesses. The Supreme Court will rule this spring. Interesting fact—oral arguments for this case were held on the 100th anniversary of the ratification of the 18th Amendment, which banned the nationwide sale of alcohol from 1920 to 1933. Cheers!