Occupational Licensing Reforms Must Maintain Standards to Protect the Public

As the United States works to reverse the economic downturn caused by the coronavirus pandemic, state legislatures will once again consider occupational licensing reform as a way to jumpstart the economy and get Americans back to work.

However, there is no silver bullet to this complex set of challenges. 

Lately, anti-licensing groups have set their sights on so-called “universal licensing” (proposals from lawmakers that aim to allow states to recognize professional licenses from other states) as a way of enabling people to have more flexibility to move their careers from state to state. 

Most people agree professionals should be allowed to move across state lines and earn a living with the least cost and hassle possible. Likewise, most people want to protect the public’s health, safety and welfare by ensuring they are being served by qualified professionals who have the knowledge, skills and experience for the job. This is especially true in highly technical, high-impact professions that the Alliance for Responsible Professional Licensing (ARPL) represents like certified public accountants (CPAs), architects, engineers, surveyors and landscape architects.

Here comes the rub: many of the universal licensing proposals being pitched to state lawmakers, including those put forth by the American Legislative Exchange Council (ALEC) and in Arizona, tend to focus exclusively on the first point—improving mobility—while disregarding the second—ensuring standards necessary to protect the public.

In other words, universal licensing mandates don’t consider the critical importance of substantially equivalent requirements between states. Instead, they dictate that states must accept a license issued by any state without regard for, understanding of, or any input in, the underlying minimum competency requirements behind the license.

The appeal of one-size-fits all “universal” proposals is understandable, but these proposals fall short on what is required to make interstate practice work. It’s not enough to say, “accept any license from any state.” ARPL professions have learned from decades of experience that there are certain principles that must be preserved and certain pitfalls that must be avoided.

So, how to get it right and create a strong, sound interstate practice licensing model? 

First, building trust in the quality and requirements behind a license from another state is the foundation for interstate practice. Therefore, the chief requirement for success is substantially similar licensing requirements within the profession or occupation. Case in point: during the pandemic, strong, smartly crafted licensing systems helped professionals go where their services were most needed. That was possible because states had trust that the underlying license requirements were similar and rigorous. Without these minimum basic standards and the trust they confer, the interstate practice system would be degraded, placing the public’s health and safety in jeopardy. As the old saying goes, a chain is only as strong as its weakest link. And we know from public opinion research that the issue matters to the 75% of consumers who believe it’s important to ensure qualifications for professionals in certain industries.

Additionally, the one-size-fits-all approach of universal licensing can actually create new barriers to mobility. One example of this is the inclusion of minimum residency requirements, like we saw in a recent Arizona bill. Residency requirements create a licensing limbo for newcomers and put them at a distinct competitive disadvantage because they’re arbitrary. In fact, professions like the ones represented by ARPL have license reciprocity systems that already work, so these types of provisions don’t solve any workforce issues.

A license should be based on qualification to perform the work, not the number of days a person has lived in a state. The goal is to make it easier for people to work and move; however, residency requirements are often inconsistent to the point of undermining existing licensing models without such requirements for interstate practice, creating new hurdles for license holders and doing little to ensure the public’s safety is protected. Plus, some professions have systems that have functioned and worked to protect the public for more than 100 years.

Finally, increasing mobility cannot come at the cost of oversight. If anything, there is a greater need to ensure clear jurisdiction and oversight and enforcement from professional boards. Accountability must be guaranteed regardless of where the license holder was licensed and where they practice. Current model legislation proposals do little or nothing to ensure accountability. In many states, guidance still hasn’t been provided on what the process will be or what accountability will look like after the law has passed.  

Creating sound interstate licensing models is much more complex than applying a one-size-fits-all approach across hundreds, if not thousands, of occupations and professions with widely divergent licensing systems and requirements. There are critical, nuanced elements that must be addressed if interstate practice is to serve the license holder and the public well.

Lawmakers should consider existing professional licensing models, like those used by CPAs, architects, engineers, landscape architects and surveyors, as examples of interstate practice systems that work. Indeed, the professional licensing systems represented by ARPL aren’t in need of reform. They are a model for reform done right.

Supporting strong licensing systems is not, as some critics contend, a zero-sum game where lawmakers must choose between creating jobs in a difficult economic climate or protecting the public’s physical and fiscal well-being. When done thoughtfully, good licensing does both.