There is significant variation in the way states issue and manage occupational licenses. Beyond differences in education and training requirements to obtain a license, states also differ in how they process and issue licenses. While some states still use paper application processes, others have migrated to online centralized licensing systems for most or all occupations requiring a license. This provides applicants a place to access information about occupational license requirements as well as application and renewal instructions.
Some states host a website that includes license management while other states partner with a software company to host and manage the process. The Council of State Governments (CSG) has compiled a sample of management software used by states in implementing online occupational licensure management. See the table below to find links to licensing boards, the software options currently used and links to the online licensing portals.
Postsecondary institutions, job training programs and employers in the U.S. offer over 950,000 different kinds of credential opportunities, including professional licenses, according to Credential Engine. With this number of offered credentials, it can be difficult to determine which education and training programs will make workers competitive for employment. Moreover, it can be difficult for employers to know if a worker’s credential gives them the necessary skill set for a job.
Solutions to these realities involve making data on credentials, competencies and occupational skills fully transparent, including data on skills in greatest demand and where such skills are being taught. As more and more states work to build back a more inclusive and equitable workforce, credential transparency has come to the forefront. Particularly for licensed professions, credential transparency can provide clearer information for practitioners working to earn their license and for those already licensed professionals upskilling.
Interstate compacts have a long history in licensing portability policy. These multi-state agreements provide shortened routes to licensing for professionals approved for practice in one state but who seek to work in another.
More recently, Universal License Recognition (ULR) — laws requiring licensing bodies to grant a license to a practitioner certified in another state — have been passed in 12 states. This trend in licensing policy represents a broader goal of states to lower barriers for professionals to enter a state’s workforce, while continuing to protect public health and safety. In that effort to expand eligibility to work, the implementation of ULR, as well as interstate compacts, must address the differences among states in licensing requirements for those with past criminal convictions. There are important variations in the crafting of these licensing laws that can have a significant impact on certain practitioners looking to move into a state with a universal license recognition law.
The U.S. Bureau of Labor Statistics estimates that the number of licensed occupations has risen from 5 percent of the U.S. workforce in the 1950s to about a quarter of the workforce today. Navigating the various state licensing processes can pose a significant challenge for workers due to different rules, regulations, fee structures and continuing education requirements. This panel looked at the rising use of occupational licensure compacts, particularly in the health care sector, to achieve professional licensure portability and reciprocity and the potential impacts on America’s workforce.
On November 28-30, the states a part of the occupational licensing policy learning consortium convened for the second annual meeting in Clearwater, Florida. The state teams had the opportunity to focus on four population groups who are disproportionately affected by licensure—individuals with criminal records, veterans and military spouses, dislocated workers and immigrants with work authorization. License portability, reciprocity, and interstate compacts were also major topics. States had the opportunity to connect with and learn from fellow consortium states, as well as hear from states outside of the consortium that have taken action on occupational licensure including Nebraska and Michigan.
A commonly cited argument for occupational licensing reform states that licensing results in restricted employment growth and higher wages for licensed workers, which in turn increases consumer costs. Higher wages benefit licensed workers, but wage disparity leads to inefficiency and unfairness, including reducing employment opportunities and depressing wages for excluded workers.
Utah’s Department of Commerce issued a 2018 legislative brief that includes a comprehensive and proactive approach to reducing occupational licensing constraints and barriers. Utah is part of CSG’s occupational licensing project, which includes an 11-state consortium that includes Arkansas, Colorado, Connecticut, Delaware, Illinois, Indiana, Kentucky, Maryland, Nevada, Utah and Wisconsin.
The current economic cost of professional and occupational regulation directly impacts one quarter1 of the working population in the U.S. The number of professions or occupations requiring a government license is nearly one quarter2 of the current working population. The majority3 of this increase has been the result of the increasing number of professions or occupations requiring a license. Recent domestic evidence also shows that states vary dramatically in their rates of licensure, ranging from 12 percent to 33 percent.