10 states have enacted major occupational licensing reforms since 2019
After an uncheckered growth, a positive trend has gained traction in the occupational licensing world. More and more states are enacting reforms loosening occupational licensing laws. Since 2019, 10 states have taken major occupational licensing reforms since 2019. Here is a summarization of those reforms by the Badger Institute.
Missouri: Missouri’s bill, signed in July 2020, is particularly enterprising. First, it eliminates the requirement that someone must live in Missouri before applying for licensure recognition, so someone can begin the process prior to moving. It also eliminates the condition that the originating state’s license be “substantially similar.” As long as someone has held an out-of-state license for at least one year, they can apply for that same license in Missouri. The legislation also includes provisions that make it easier for people with criminal records to secure a license. Read the bill here.
Iowa: Signed in June 2020, Iowa’s bill was the first licensure recognition legislation in the nation to factor in work experience when considering one’s qualifications for licensure. If someone moves to Iowa from a state where their occupation is not licensed but worked in a field for three or more years “with a substantially similar scope of practice within the four years preceding the date of the application,” the applicant may be eligible for an Iowa license without undergoing additional training. The bill also waived licensing fees for low-income workers and expanded opportunities for ex-offenders. The bill text can be found here.
Colorado: Signed by the governor in June of 2020 after passing the Legislature almost unanimously, Colorado’s bill allows for applicants with “substantially equivalent experience or credentials” to obtain a Colorado license. It also requires licensing boards to reduce unnecessary barriers for certification, registration and licensure applicants. Read the legislation here.
Florida: “The Occupational Freedom and Opportunity Act” passed in June 2020 allows for universal licensure recognition of barbers and cosmetologists moving from other states and requires regulators to identify other professions that should be considered for similar reciprocity. The bill also eliminated a handful of occupational licenses, including those for hair braiders, nail technicians and boxing match timekeepers; replaced the interior design license with a registration; and reformed or reduced licensing requirements for a handful of other occupations. It passed with significant bipartisan support. Read the bill here.
Idaho: Idaho’s legislation, signed into law in March 2020 goes much further than occupational licensure recognition and expands opportunities for people with criminal records, implements a sunrise review process to examine proposed new licenses and allows applicants from other states to receive a temporary license while they complete subsequent requirements in Idaho, if necessary. Read the bill here.
Utah: Also signed into law in March 2020, Utah’s legislation allows new residents to obtain a license if they’ve held a license in another state for at least one year and are in good standing. The bill also expands opportunities for those with a criminal record and allows professionals to easily and temporarily practice in Utah during a natural disaster or other crisis. Read the bill here.
New Jersey: One of the early adopters of universal licensure recognition in 2019, New Jersey requires applicants to have worked in the occupation within the last five years in their previous state, be in good standing in that state, pay applicable fees and agree to a background check, if required. Read the bill here.
Pennsylvania: Pennsylvania’s bill was signed into law in July 2019 and gives licensing boards increased authority to determine whether someone’s experience and training relates to the corresponding requirements in the state. Applicants need at least two years of experience in a field before receiving a Pennsylvania license, but the bill still streamlines the process for new residents. Read the bill here.
Arizona: Arizona passed full universal licensure recognition in April 2019. The law requires applicants to have been licensed (in good standing) in their profession for at least a year, pay fees and meet residency and other requirements. In less than a year following its passage, 751 people benefitted from this reform. The legislation can be found here.
Montana: Montana’s recognition bill, which became law in March 2019, provides a pathway for someone to obtain a license if the state where they were previously licensed requires standards that are “substantially equivalent to or greater than” those required for that license in Montana. The bill is available here.
This a good sign that states are recognizing the harmful effects that occupational licensing brings. Unfortunately, no similar developments have been made by the state of Minnesota. This, despite the fact that Minnesota’s breadth and burden of licensure have been increasing at a higher rate compared to the majority of states.
American Experiment has long argued for the reversion of this trend. And the coronavirus induced recession makes the need for reform even more urgent. If the state of Minnesota does not follow other states and enact some reform loosening licensing laws, we risk losing out on all the benefits that follow a freer labor market.