The most expansive reforms in
occupational licensing will undoubtedly take place at the state level; however,
administrative officials and federal legislators are creating new ways in which
the federal government can reduce licensing barriers nationwide, while paving
the way for states to pursue their own reforms.
On April 12, the U.S. Department of
Labor announced $7.5 million to help states “review
and streamline” occupational licensing rules. Funds will be available to states
and associations of states to review, eliminate and reform licensing
requirements and to promote portability of state licenses. Additionally, grant
funding will be available to postsecondary institutions and occupational
licensing partners to address barriers to licensure for veterans and
transitioning service members. Successful grantees should be able to objectively
analyze the relevant licensing criteria, potential portability issues and
whether licensing requirements are overly broad or burdensome.
Licensing has been a common feature
of American economic life. In 1883, the first professional dental licensure
standards were implemented. In 1889, the Supreme Court’s decision in Dent v. West Virginia, upheld West Virginia’s medical-licensing system and,
with it, ushered in an era of legal decisions that preserved licensing regimes
for a wide array of trades and occupations around the country.
Licensing requirements vary widely by
state. Both the Obama and Trump Administrations have focused on the
issue, as have governors from across the political spectrum. Occupational
licenses do not transfer across state lines, curtailing worker mobility, especially
for military spouses who move frequently.
Trade groups and schools that benefit
from the system lobby hard to keep licensing requirements in place. Often, the
judicial branch must step in to enact change, which is what happened in 2015
when the Supreme Court ruled that the North Carolina State Board of Dental
Examiners had overstepped in barring anyone but dentists from performing teeth
whitening. Nondentists had been charging less for the service, and their
licensing board issued cease-and-desist letters. In 2012, the Federal Trade
Commission felt moved to file a complaint about what they believed was anti-competitive
behavior. The court ruled that the North Carolina board was not closely
connected enough to the state government to enjoy its antitrust exemptions. The
decision nonetheless served as a warning to states to keep closer tabs on their
boards and perhaps rethink their licensing regimes.
The Labor Department under President
Obama also awarded a $7.5 million grant to the National Conference of State
Legislatures to study license portability across state lines, though this grant
is not completely new. Under this administration, the money will go to states
grantees. ADEA will continue to monitor this new grant program and keep members
up to date on how this may serve to change reform occupational licensing.