Flemming: 4,800 Vermont workers face mandatory registration and fees

By David Flemming

About half of U.S. workers need an occupational license to do their job, a huge increase from the 1 in 20 workers in 1950. 2020 Presidential hopefuls Donald Trump and Joe Biden have denounced this encroachment on labor freedom in the past several months. Yet Vermont legislators aren’t keeping with up with the times.

Our legislators were seeking to add residential contractors to the growing list of low-middle income occupations in Vermont that are license-to-work. The Vermont Senate narrowly passed the contracting bill a few weeks ago, over objections from a bipartisan group of senators.

This seems especially incongruous if we recall that many of our legislators have recently attempted to show high school graduates the value of choosing trade school over four-year college degrees that often give graduates massive debt with little guarantee of getting a job.

In 2017, Vermont had almost 4,800 residential contractors who made an average of $42,000 last year, some of whom made more than $58,000 a year. These are good paying skilled jobs that need younger workers. By imposing a certification process with an added fee, Vermont will in effect be discouraging recent graduates from considering becoming residential contractors. Or perhaps, these graduates might choose to take their talents outside Vermont.

If a contractor receives at least $2,500 to do a job such as putting in a window, he or she must register to continue legally working in Vermont. An individual self-employed worker would pay $75 every two years, while a business would need to pay $250 every two years.

In order to have their license issued or renewed, each contractor is required to have “professional liability insurance,” to cover $1 million of damages. Witnesses testified that buying this insurance would cost around $600 annually for a self-employed individual.

In an earlier version of this post, I had claimed that the bill was truly licensure: putting in place tests from the government that are necessary to do your job legally. In fact, the bill was actually mandating State Certification, the slightly less restrictive government intervention on the Institute for Justice’s “Hierarchy of Alternatives to Licensing.” In other words, the bill’s state certification component would restrict Vermonters from advertising that they are a “certified residential contractor,” unless they pay a fee to have their skills tested. So rather than the worst type of occupational licensing, we have the second most onerous. And just so we’re thorough, we’re also throwing in registration (third most onerous) and mandatory insurance (fourth most onerous). Might it make worse to try mandatory insurance before we go all in with registration and state certification?

Add this all up: A self-employed contractor without insurance would need to spend an additional $650 annually for registration and insurance. They would pay even more if they wanted to take tests for certifications. A larger contractor would cough up more overall, but less per employee.

Contractors would also be told what constitutes a legitimate contract with their customers, down to the line item.

These stipulations may just be the beginning. Rep. Marianne Gamache, R-Swanton, suggested that the contracting bill may just be “laying a base for the building industry” to pass “license rules and regulations that don’t exist now.” Let’s hope we don’t get full on licensure in the coming years.

David Flemming is a policy analyst for the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Wikimedia Commons/Public domain
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6 thoughts on “Flemming: 4,800 Vermont workers face mandatory registration and fees

  1. I want to know where you get a million dollar liability policy for $600. — I looked for one a few years ago, so i could contract directly with utilities, and there was no company that would issue one. I even asked an old high school friend who owned his own agency where to go, and there was no place that he knew of.

  2. This was done because our court system is such an abysmal failure, they can’t get deposit money back from contractors that never started the job.

    That is a classic example of how our court system in Vermont is a complete failure.

    Our state solves the problem, not by prosecuting guilty people, but by making it more difficult and expensive to earn a living in Vermont.

    You have entered the socialist zone, where your money and taxes solve everyone’s problems…dini ninu, dini ninu…..when you enter this state, and open the door into the socialist zone, where the dimension of new taxation ideas, land of taxes and unicorns where taxation imagination knows no bounds. Where the state knows all and there are not consequences for any actions. Fees and regulation solve all problems. You’ve entered the socialist zone.

  3. As if building costs weren’t high enough already, lets see if we can drive them up a little further and then fund a study to find out why there isn’t more affordable housing and why so many young workers are leaving Vermont.
    Liberals have always whined that “Republicans want to control everything that you do!!!” It would seem that liberals have cornered the market on controls yet they are still finding more to control and regulate each and every day.

  4. When you make foolish legislation you need money to fund your nonsense so who has
    the money………… yes the workers !!

    And these fools including the so called Governor can’t figure out why Vermonter’s are
    leaving the state.

    Our Progressive DemocRATs have an agenda and you’re going to fund it. Keep voting
    them in.

  5. Vt’s leftist fascist are not only NOT up with times their not cognoscent of
    the damage they do. I guess it’s much like the brain dead leading the brainless that vote them in. The numbers are there to see everything
    they touch they ruined. Maybe we should be regulating flatlanders out of
    this state. And for sure out of the government.

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