Traditional occupational licensing standards typically require that applicants achieve a certain number of hours of training, education and/or experience and pass a cumulative examination before a license is granted by a state. However, the time-based requirements that states implement can vary widely. For example, aspiring barbers can be required to complete between 1,000 and 2,100 hours of training, depending on the state, before they are eligible for a license. This variance in standards demonstrates the discretion states can take in setting regulations that seek to balance public protection with economic opportunity. While licensing is a means to safeguard public health and safety, overly burdensome regulations can exacerbate the economic costs of licensing such as lower economic outputs and fewer jobs.
Seeking to reduce the regulatory burden on workers, the state of Utah established an alternative to time-based licensing requirements by passing House Bill 226, which grants its Division of Occupational and Professional Licensing the ability to implement competency-based requirements.
Rep. Norm Thurston, the sponsor of HB226, explained that competency-based requirements “involve a person learning skills at their own pace where they are subjected to competency-based examinations along the way to prove that they have attained those skills.”
In other words, competency-based requirements allow an individual to demonstrate their achievement of a certain skill as they obtain it. Instead of an individual having to fulfill the minimum number of hours and take a cumulative examination to receive a license, they can demonstrate competency throughout their training and education. With an individual being allowed to progress at their own pace, inefficiencies and redundancies in the licensing process are lessened and thus, the economic costs of licensing standards are reduced.
Thurston said that the legislation will primarily help individuals who may experience difficulties through the traditional system.
“It advantages two types of people,” he said. “First it helps anyone who can learn the skills quicker, maybe because of prior experience, greater aptitude or better instructors. It also benefits those who struggle in the traditional testing model such as people with test anxiety or individuals with disabilities.”
The bill provides the director of Utah’s Division of Occupational and Professional Licensing the discretion to implement competency-based requirements for licensure where it is determined that it is “at least as effective as a time-based licensing requirement at demonstrating proficiency and protecting the health and safety of the public.”
Thurston said he imagines the model being used in partnership with traditional training programs through community colleges, apprenticeships programs and specialty schools, which may already be implementing this type of model but could benefit from pairing it with licensing standards.
Thurston further envisions that competency-based requirements could be used to create a licensure continuum where individuals are able receive credentials to perform certain services as they continue their education and training.
“For example, a cosmetologist may be able to pass the competency examinations to cut hair but maybe is not ready to use chemicals or color hair,” he said. “This model could allow the cosmetologist to start working and earn income as they are still learning other skills to receive further certifications.”
As states look to improve time to licensure and reduce its economic effects, competency-based requirements serve as an innovative alternative to the traditional licensing process.
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