Occupational licenses—government permission slips to work—come with steep costs, often involving thousands of hours and dollars worth of training. Without these licenses, workers can face stiff fines or even risk jail time—even when the work they want to do is perfectly safe.
It is widely recognized that occupational licensing restricts job opportunities, hinders innovation, and raises prices for consumers—without increasing the quality of services. There is overwhelming agreement across the political spectrum, from the left and the right, that licensing hurts workers and needs to be reduced. By one estimate, licensing means 2.85 million fewer jobs each year. The most common beneficiaries? Industry insiders—typically, the schools who benefit from tuition costs and free labor from students or trade groups that benefit from less competition. These are not costs we can continue to bear, especially when we have declining entrepreneurship and millions of people who need to get back to work.
Unfortunately, Nevada has some of the most burdensome occupational licenses in the country. To remedy this and let Nevadans work, there are practical steps policymakers can take to scale back licensing to create jobs while ensuring the public’s health and safety.
Problem:
All contractors in Nevada must obtain variations of the same license, regardless of the complexity or safety hazards inherent in the trade.
Minimum requirements to qualify as a contractor include, among other things:
- Four years of relevant experience, both in the specific trade and in business administration.
- At least one exam, and often two (a trade exam and a business administration exam).
- Approximately $1,000 in fees ($300 application fee, $600 license fee, and miscellaneous fees paid to third parties for exams).
However, painting walls or manicuring lawns and trees does not require the same level of expertise—nor pose as many potential health and safety risks if done improperly—as, for example, wiring a commercial building or constructing multi-story housing. These lower-skilled trades are excellent job opportunities for people without formal education, English language learners, new immigrants, and other people on the first rungs of the economic ladder.
Most states allow a certain amount of “handyman” type work to be done without a contracting license. Nevada’s exemption applies to any work that does not require a permit and worth less than $1,000 in combined parts and labor. Idaho’s exemption is $2,000 and Utah’s is $3,000. But given the inherent safety in this type of work—such as hanging shelves, patching broken drywall, and repairing a fence, which most lay people are capable of doing for themselves if they are so inclined—as well as rising costs of labor and materials, Nevada should expand the ability to perform it without a license.
Solution:
We recommend Nevada become a national leader and increase its handyman exemption to $10,000.
Problem:
Currently, Nevada will not waive the 4 year experience requirement if a contractor has merely been investigated for misconduct in another state.
Licensing reciprocity allows workers who are licensed in other states the freedom to move to Nevada without incurring the incredible burden of having to go through the licensing process again. Nevada should more broadly recognize the licenses of other states and reduce/eliminate the barriers to transferring one’s out of state license to a Nevada license.
Solution:
This language should be changed to include only a finding of guilt and/or sanction leveled against a contractor by the relevant licensing authority to be disqualifying, not merely the allegation or investigation thereof.
Further, the nature, age, and magnitude of the infraction should be considered when determining whether or not a contractor’s experience will be recognized.
Problem: Nevada places extremely high licensing burdens on aspiring cosmetologists.
Nevada requires 1,600 hours of education (also a combination of classroom hours and practical experience) to become licensed. This is near the top of the list nationally, with states’ required hours ranging from 1,000 to 2,100 hours.
Solutions:
- Reduce the requirement for a full-service license to 1,000 hours.
- Reduce the 1,000-hour “hair designer” license to 500 hours.
- Allow unlicensed hair stylists to work under the supervision of licensed cosmetologists.
- Exempt blow-dry styling from the hair designer license. Most people blow dry their own hair at home—it shouldn’t require a special license to do it for pay.
- Consider exempting other niche beauty services, such as nails and eyebrow threading, from full cosmetology license.
Problem: It is harder to get a barbering license in Nevada than it is in any other state.
Nevada requires aspiring barbers to complete 1,500 hours of education (200 classroom hours and 1,300 practical hours cutting hair at the barber school), followed by an 18-month, full-time apprenticeship. Only two other states require an apprenticeship, and the required duration is much shorter.
Solutions:
- Reduce the education requirement to 1,000 hours, a proposal supported by the Future of the Beauty Industry Coalition. The FBIC points out that hair is hair—there is no reason why the education and experience requirements should vary so much between states.
- Allow aspiring barbers to fulfill their 1,000 hours through a combination of school and apprenticeships simultaneously. Students should have the opportunity to complete their practical hours either through their barbering school or through an approved apprenticeship, whichever they prefer.
- Eliminate statutory language that requires apprenticeships to be structured as 40 hours per week jobs (NAC §643.030). Many aspiring barbers want to be able to fulfill their required hours while working other part- or full-time jobs so they can financially support themselves and their families.
Problem:
Nevada imposes the second highest time and education requirements to start a home day care center in the entire United States.
Women have traditionally used their homes to care for their neighbors’ children. Now during the national shortage of childcare, neighborhood daycares are more important than ever. Not only is home day care an accessible path to entrepreneurship for many people, especially women with children at home, but it is also a great way to ensure access to childcare.
To start a home daycare business watching more than four children must first get a Childcare license. Requirements to get a Childcare license can range from:
- An Associate’s Degree in early childhood education and 1,000 hours of verifiable experience in a childcare facility; to
- A current credential as a Child Development Associate with an endorsement for preschool-aged children, infants, or toddlers and 2,000 hours of experience.
These requirements are exceedingly burdensome for a person who, for example, wants to earn some extra income by watching their neighbors’ children after school.
Nevada does allow individuals to start small daycare businesses in their homes known as “small childcare establishments” (SCEs). An SCE is an exemption from Nevada’s childcare licensing regime that allows those caring for up to four children. This carve out is important to ensure both access to childcare for those who do not have access to a traditional daycare, but also to promote entrepreneurship.
Nevada’s strict home day care licensing laws are an outlier among neighboring states:
- In Utah, a home daycare is exempted from licensure for those who are caring for seven or fewer children.
- In California, one must watch a short orientation video to qualify to watch six to eight children as a home day care.
- In Idaho, one must simply submit to a criminal background check to provide daycare for up to six children.
- In Oregon, one must complete a short family childcare training, to provide daycare for up to ten children.
Solution:
Increase the number of children SCEs may serve from four to six children, and raise the family care license from 4-6 children to 6-8 children and the group care license from 6-12 children to 8-12 children.
Problem:
Returning citizens can obtain skills or meet education requirements for licensed occupations and professions before, during, and after their period of incarceration. Yet licensing agencies in Nevada can deny a license simply because of an individual’s criminal record — even when their crime is completely unrelated to the job they are pursuing.
Every year, thousands of returning citizens in Nevada finish their serving sentences with hopes of returning to society and plans for their future; and for returning citizens, one key factor to success is finding a job. Jobs provide security and purpose for all citizens and can also lead to lower incarceration and recidivism rates.
A study published by the Institute for Justice found that Nevada has almost no legal protections for licensing applicants with criminal records. In fact, Nevada is one of only six states that earned an “F.” The report finds that despite the state having a predetermination process to allow returning citizens to learn whether their criminal record is disqualifying before satisfying licensing requirements, current law explicitly states that licensing entities are “not bound” by those determinations and may rescind them “at any time.” These caveats completely undermine the purpose behind the petition process and render it meaningless.
Solution:
In 2023, the Nevada legislature considered AB 363, which would improve the process licensing entities use to determine whether a criminal record disqualifies a person from securing a license.
This legislative action would ensure that licensing boards are not considering old and irrelevant convictions that do not bear on a person’s ability to safely perform the duties of the occupation, and it provides people with a meaningful path for having adverse decisions reviewed.
Problem:
The severe restrictions that Nevada places on the sale of homemade food are a significant barrier for many individuals who want to start a small business but don’t have the capital necessary to obtain commercial space.
All 50 states allow the sale of homemade foods, but unfortunately, Nevada’s homemade food law is one of the strictest in the nation. Nevada only allows the sale of a limited list of shelf-stable foods, prohibits online sales and sales to retailers, and arbitrarily limits cottage food producers’ annual sales to just $35,000. These rules lay in stark contrast to the rest of the country, where most states do not limit revenue and allow more types of foods to be sold via a wider variety of venues.
This limits the ability of Nevadans—particularly women living in rural areas on modest incomes—to earn an honest living from home. It is also contrary to the national trend towards expanding homemade food sales. Currently, eight states (Arizona, California, Iowa, Montana, North Dakota, Oklahoma, Utah, and Wyoming) have what the industry calls “food freedom” laws, which allow the sale of nearly all foods from home. And recent data show that doing so is incredibly safe.
Solution:
Nevada should follow in the footsteps of its neighbors Arizona, California, and Utah by adopting similarly permissive food freedom legislation, by eliminating the arbitrary $35,000 annual cap on gross homemade food sales, allowing all types of food to be sold, and allowing foods to be sold not just from home or at farmers’ markets, but online and through the mail as well.
The Institute for Justice (IJ) is a national nonprofit organization committed to advocating for entrepreneurs across the country. In partnership with various organizations across the political spectrum, IJ is proposing legislative reforms to address burdensome occupational licensing requirements in Nevada. These reforms aim to remove unnecessary regulatory barriers and create more opportunities for Nevadans to work and own small businesses.