Occupational Licensing Reform Remains Priority for State Legislators

For years now, state legislatures across the country have been focused on reforming their occupational licensing laws.

Since 2017 the National Conference of State Legislatures (NCSL), in cooperation with The Council of State Governments and the National Governors Association, has tracked thousands of occupational licensing bills, which seek to balance the competing values of consumer protection and eliminating barriers to employment.

Over the past 60 years or so occupational licensing in the United States has grown exponentially. About six decades ago 5% of U.S. workers needed such licenses. Today it’s about 25%.

States enacted occupational licensing laws for a good reason: to ensure consumers receive high quality, professional services.

But the patchwork of laws around who can work in each state as a mechanic or therapist or court reporter or land surveyor or naturopath has made it increasingly difficult for workers to move between states, a problem that was exacerbated during the COVID-19 pandemic and tight labor market.

Worse, some worry stringent and disparate licensing requirements in states create unjust, bureaucratic obstacles to employment and may even suppress wages for workers who are unable to secure licenses.

So it’s no surprise occupational licensing has been a hot topic under statehouse domes from coast to coast over the last several years. And it continues to be in 2024.

Portability Continues to Be Focus

In Louisiana, for example, the legislature has been steadily moving forward HB 933 by Rep. Michael Robert “Mike” Bayham, Jr. (R), which seeks to repeal a licensure test for florists in the Bayou State. Louisiana is the only state in the nation to require florists to pass a test in order to sell flowers.

“The current system we have right now with the testing and the licensing and the annual licensing is a barrier to entry into the marketplace,” Bayham said in an interview with KLFY-TV in Lafayette in April.

Meanwhile, in Illinois Sen. Javier Cervantes (D) is moving ahead with his SB 3740, which would make it easier for real estate brokers licensed in other states to work in the Prairie State.

“To modernize our real estate practices in Illinois, this legislation would promote greater diversity in the market for many residents to utilize,” Cervantes said in an April press release. “Allowing more brokers and managers from other states to operate in Illinynois would benefit our residents and the businesses wanting to operate in our state.”

Cervantes added: “This legislation will reduce barriers for those who want to enter the profession. Giving applicants the opportunity to take and pass a written examination limited to Illinois real estate law will provide more access to licensed real estate providers in our communities.”

The Maine Legislature recently passed HB 2140 by Rep. Lydia V. Crafts (D), which adds the Pine Tree State to a list of seven others that entered into an interstate compact to make it easier for social workers to work in new locations. Similar proposals are pending in at least 19 others states, according to the Associated Press.

“The need for mental health services in Maine is dire,” Crafts said in prepared remarks about the bill before the Joint Standing Committee on Health Coverage, Insurance and Financial Services. “We are all too familiar with commonly referenced waitlists, individuals and families in crisis, children and adults sitting in Emergency Departments for weeks and sometimes months, etc. LD 2140 seeks to address our mental health workforce needs to improve these all-too-common circumstances.”

Crafts’ went on to say: “This social work compact seeks to enhance the portability of a license to practice while safeguarding the safety of patients. This is simple and straightforward and is similar to several interstate licensing compacts your committee has supported in the past. Interstate compacts are a constitutionally authorized, legally binding, legislatively enacted contract among participating states. States joining the compact agree to recognize a valid, unencumbered license issued by another compact member state via a compact privilege, which is equivalent to a license. In terms of the social work licensure compact, licensed social workers utilizing the compact will be able to obtain a privilege in each compact state where they want to practice.”

The Illinois and Maine bills illustrate a continuing trend in state legislatures of putting forth proposals to expand the portability of occupational licenses.

“In 2023, there was a particular emphasis on developing compact laws for medical-related occupations,” NCSL reported in April. “At least 11 states have established compact laws for medical professionals, including professionals in dentistry and mental health. To name a few, Hawaii, Minnesota and Utah have legislated interstate medical licensure compacts.”

NCSL added, “Occupational licensing policy remained a priority for legislatures throughout 2023.” It appears to have remained a priority into 2024.

Since the beginning of the year, 227 bills in 40 states have been introduced containing the phrase “occupational license,” according to data from the LexisNexis® State Net® service.

More than 40 of those bills have already been enacted, including:

• Indiana SB 34, which calls for studying other states that have enacted universal occupational licensing;

• Louisiana SB 60, which allows state occupational licensing boards to issue new licenses to applicants with valid licenses in other states;

• Virginia SB 554, which requires the state Real Estate Appraiser Board, the Real Estate Board, the Board for Waste Management Facility Operators, and the Board for Waterworks and Wastewater Works Operators and Onsite Sewage System Professionals to recognize current licenses in neighboring states; and

• Vermont HB 606, which allows people who meet the state’s occupational licensing standards to receive a license regardless of their immigration status.

Occupational Licensing Hot Issue in State Legislatures

At least 29 states have enacted bills dealing with occupational licensing in the 2023-2024 legislative biennium. The measures include those easing licensing requirements for certain occupations or instituting reciprocity agreements with other states or studies of such agreements.

In 2022 the Institute for Justice wrote in the third edition of its License to Work study, “(T)here remains much room—and need—for licensing reform nationwide.” It appears state lawmakers are continuing to heed that call.

—By SNCJ Correspondent BRIAN JOSEPH

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