ADEA Washington Update

U.S. Department of Labor Supports Occupational Licensing Reform

(Education, Federal Court, Licensure) Permanent link   All Posts

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. 

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