Occupational Licensing in Nebraska

What is Occupational Licensing?

An occupational or professional license is a permit issued by the government that lets someone work in a particular field. In Nebraska, almost one out of every five workers must now get an occupational license before they can legally do their jobs. But many licenses don’t even improve service quality or protect the public from actual harm.

Licenses Create Barriers to Working in Nebraska

Occupational licenses often impose high barriers to entry. That makes it much harder for people to find work or to start a new business. According to the Institute for Justice’s report, License to Work, the average license for low- and moderate-income jobs in Nebraska takes 114 days of education and experience. And those required classes can be very expensive.  

For instance, cosmetology is one of the state’s most popular licenses. In Nebraska, it takes at least 1,800 hours of classes to get a license in cosmetology. On average, a cosmetology program in the state costs $19,058, while the average student takes out $9,443 in federal student loans. But despite such a hefty investment, many cosmetologists barely earn enough to get by: Half of cosmetologists make less than $24,220 a year. 

All told, the state’s licensing requirements come with heavy costs. A separate study by IJ, At What Cost?, estimated that occupational licensing costs the state’s economy $1.54 billion and leads to 15,000 fewer jobs each year. 

Sunrise Review in Nebraska 

Under “sunrise review,” whenever a new job regulation is proposed, state regulators must determine whether the regulation is needed, its potential costs and burdens, and if there are any less restrictive alternatives. Between 1985 and 2017, Nebraska regulators conducted 38 sunrise reviews across 32 different occupations. Many proposed regulations were unfounded: Only 21% of sunrise reviews recommended creating new licenses.  

Recent Licensing Reforms in Nebraska 

Working with the Institute for Justice, the Unicameral Legislature recently enacted a “sunset” review process to scrutinize licenses already on the books. As the name suggests, this complements Nebraska’s sunrise review process. Under the Occupational Board Reform Act, state regulators must analyze one-fifth of the state’s occupational regulations every year, with the cycle repeating every five years. Regulations must be the “least restrictive” and “necessary” to protect the public from the “undue risk of present, significant, and substantiated harms.” The Occupational Board Reform Act also eased licensing barriers for people with criminal records. In addition, Nebraska has exempted natural hair braiders from the state’s burdensome cosmetology license, 

Can You Get a License to Work with a Criminal Record in Nebraska? 

Denials can vary wildly across Nebraska’s different boards. The Department of Health and Human Services can only disqualify an applicant if there is a “rational connection” between the license and the criminal record. But other licensing agencies, like the Nebraska Department of Education and the Real Estate Commission, can use “any felony” to deny licenses, even if the crime committed was completely irrelevant to the occupation.  
 
However, Nebraska does require licensing boards to offer a predetermination process to let applicants see if their criminal record could disqualify them, before they invest in any costly training or classes. Overall, Nebraska received a C- for its laws in IJ’s Barred from Working report.  

How You Can Help

If you are a Nebraska resident and you want to help fight against these unfair and unnecessary licensing laws, there are a few ways you can get involved. You can donate to the Institute for Justice, sign up for our email updates, and share our message with your network. Together, we can make sure that all Nebraska workers have the economic liberty they deserve.