LB507 – Eliminate the Farm Labor Contractors Act

Good afternoon, Vice Chairwoman Crawford and members of the Business and Labor Committee.  My name is Nicole Fox, and I am the Director of Government Relations for the Platte Institute for Economic Research.  I’d like to say “thank you” to Senator Albrecht for introducing LB 507.  I am here today to testify in support of this bill.

A Farm Labor Contractor is someone who recruits, solicits, hires, employs, furnishes or transports migrant and/or seasonal agricultural workers or, provides housing to migrant agricultural workers. Agricultural employers, agricultural associations and their employees are not included in the term.

Requirements for farm labor contractors are more burdensome in Nebraska than in other states.  Currently, Nebraska law requires persons hiring seasonal and migrant workers to apply for a Farm Labor Contractors license.  Nebraska is just 1 of 9 states that require licensure at the state level.  None of Nebraska’s neighboring states require this type of license. 

The Migrant and Seasonal Agricultural Worker Protection Act (MSPA) protects migrant and seasonal agricultural workers by establishing employment standards related to wages, housing, transportation, disclosures and recordkeeping. MSPA also requires farm labor contractors to register with the U.S. Department of Labor. 

Before performing any farm labor contracting activity, a farm labor contractor must register with the U.S. Department of Labor and obtain a certificate of registration.  Persons employed by farm labor contractors to perform farm labor contracting activities also must register with the U. S. Department of Labor.

Farm labor contractors and farm labor contractor employees who perform farm labor contractor activities must carry proof of registration and show it to workers, agricultural employers, agricultural associations, and any other person with whom they deal as contractors. 

Reform of occupational licensing laws to lessen burdensome regulation is an economic issue that needs to be addressed.  Nearly 200 different occupations in Nebraska require a government license, affecting nearly 1 in 4 workers.  This is negatively impacting small businesses trying to hire employees, potential entrepreneurs wanting to start a business and individuals seeking a means to earn an honest living. 

Occupational licensing laws were initially created as a means of protecting the public from negligent and unqualified practitioners, but more and more, instead of protecting the public from harm, we now understand that the patchwork of state-by-state occupational licensing rules leads to dramatically different requirements for the same occupations depending on the state in which one works. 

Licensing also poses a financial barrier to small businesses, and often the cost is passed on to consumers by raising the price of goods and services.  In Nebraska, a farm labor contractor must pay an annual fee of $750.  A study by the Heritage Foundation showed that occupational licensing reform could save Nebraska households over $900 annually.

In July 2015, the White House put out a set of best practices for state policymakers to enact reforms to reduce the prevalence of unnecessary occupational licenses that are hurting workers.  LB 507 eliminates the Farm Labor Contractor Act and saves Nebraska farm labor contractors the red tape of excessive paperwork and fees associated with applying for an occupational license that is unnecessary as current federal standards require federal registry. 

In the state of Nebraska, migrant workers have access to advocacy assistance through the Nebraska Department of Labor as well as through Legal Aid of Nebraska’s “Migrant Project.”

The Platte Institute strongly supports occupational licensing reform as a means of lessening burdens to work.  I ask that you advance LB 507 out of committee.

Thank you for the opportunity to testify today.  I am happy to answer any questions the committee may have.