State Government and Government & Economic Development and Government

State studies whether to reduce rules for licensed workers

August 5, 2014

State leaders are considering an overhaul of an occupational regulatory program that some experts say is out of whack.

The changes could impact some 470,000 Hoosiers, including health care workers, barbers, plumbers, social workers and others – people who face rules that critics say are far too burdensome.

In fact, one out of every seven working Hoosiers is subject to regulation by the Indiana Professional Licensing Agency. That means fees, continuing education and other rules.

“We need to have a top to bottom review,” said Nick Rhoad, executive director of the licensing agency. “Because every dollar not spent on paperwork is a dollar that can be spent in the workplace or creating jobs.”

The agency currently staffs some 38 different boards, professions and commissions with regulation of nearly 250 licenses, certifications and endorsements. That includes medical professionals such as doctors and nurses, trades such as plumbing and home inspectors, and specialists like cosmetologists and real estate agents.

But lawmakers are now questioning whether all that regulation is necessary.

Rhoad is serving as co-chair of a panel made up of state officials and legislators who are studying alternatives to traditional licensing. Among the ideas is moving some occupations to what’s called self-certification, meaning that workers who have earned professional credentials could sign up for registries that help consumers make choices about who to hire.

That’s the way the state’s interior designers are now regulated. Rather than having a license and an oversight board, the state maintains a registry – which is managed by an industry group – for designers who have earned specific educational credentials and passed a national exam.

More than 500 interior designers are now on the list – and only they can advertise as certified interior designers.

“It is working and we have not actually had any conflicts or any questioning of eligibility,” Connie Jung, president of the Interior Design Coalition of Indiana, told the panel Tuesday. “It has really flowed very easily,” she said.

But designers are the minority. The agency regulates dozens of other professions more heavily – with licenses required for many workers to do their jobs at all.

On Tuesday, the state panel heard nearly seven hours of testimony from researchers and trade groups, including some who want their professions to remain highly regulated and those who advocate something looser than a license.

John Halal, president of the Indiana Cosmetology & Barbering Association, said licenses remain important in his industry. Halal said he’s already worried about what he sees as an erosion of licensing requirements. In the past 10 years, services including shampooing, hair threading, facials and makeup have been removed from the list of items that require a license.

“Anyone now can open a salon with no licensure,” Halal said. “They can do shampooing, facials and makeup without any license, any training, without any protection for the consumer.”

But Morris Kleiner, the AFL-CIO chair of labor policy at the University of Minnesota, told the panel that certification is better than licensing for most professions, in part because it costs less for government and for workers. That’s because it doesn’t require workers to obtain education and certification but gives consumers information about those who do.

“The reality is that occupational licensing reduces employment growth… and increases costs to consumers,” Kleiner said. “Certification has none of the problems of licensure. It provides consumers with more choice at a lower price than occupational licensing.”

Experts said that’s particularly true for occupations that don’t endanger public health.

“There is a role for regulation but the regulation should not unduly interfere” with a person’s ability to choose a profession, said Dick Carpenter, professor of educational leadership, research and foundations at the University of Colorado at Colorado Springs.

Too often, he said, that’s not the case. Carpenter has studied occupational regulations across the nation and found that disparate licensing requirements have undermined the asserted need for the rules.

For example, sign language interpreters are regulated in 16 states and auctioneers in 33 states. Indiana requires licenses for both. But Carpenter said if there was truly a public interest in regulating them, he would expect to see “a dangerous epidemic” of problems caused by unlicensed sign language interpreters in the 34 states that don’t regulate them.

He told the panel that obtaining a manicurist license in Indiana requires just five days of training but more than four months in other states. And Carpenter said in Indiana, 10 occupations – including earth drillers, mobile home installers and cosmetologists – have greater licensure burdens than emergency medical technicians.

“The difficulty of jumping licensing hurdles has little do with public safety,” Carpenter said.

Rhoad said the state is not seeking to eliminate licensing for some key professionals, including physicians. Other workers, though, especially those who report to a licensed professional, may not need such strict regulations, he said.

“That’s the conversation the General Assembly needs to have,” Rhoad said.

In recent years, lawmakers have considered bills to reduce licensing for cosmetologists and other professions but the industries have fought back, leading legislators to drop most of their efforts.

On Tuesday, Rep. Jud McMillin, R-Brookville, said it’s time for lawmakers to try again.

“The effort has been victimized by the status quo before the conversation really got off the ground,” McMillin said. “It’s going to happen. But there are going to be people out there who oppose this just because it’s change.”

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