Momentum for Licensing Reform Is Growing Nationwide

In recent years, occupational licensing reform has gained momentum at the state and federal levels. While some reforms have aimed at rolling back specific licensing barriers, others have sought to improve licensing practices more generally.

One dramatic example of rolling back barriers is the growing number of states that now permit African-style hair braiders to work without obtaining expensive, time-consuming and irrelevant cosmetology or barber licenses. To date, 23 states have exempted braiders from licensure—12 of them since 2014. ¹

Some states have also outright repealed licenses. For example, in 2017, Connecticut eliminated several licenses that had no educational or training requirements, including those for swimming pool builders, shorthand reporters, itinerant vendors and athlete agents. ²   Other states, including Arizona and Michigan, have also removed or reduced licensing barriers, while New Mexico’s contractor licensing board has eliminated licenses for a handful of building trades. ³

Beyond removing licensing barriers, reformers have also sought to reduce anticompetitive occupational regulations and make it easier for people with criminal records to find work and rejoin society.

At the federal level, legislation has been introduced that would bring state licensing boards under the direct supervision of the legislative and executive branches and reduce the risk of federal antitrust lawsuits. The Restoring Board Immunity Act would require states to enact a policy of implementing the least restrictive means available to promote public health and safety and then choose one of two paths for ensuring that they follow that policy. States would have to either 1) establish “active supervision” over licensing boards and conduct periodic review of them, or 2) provide for more meaningful judicial review of licensing laws. ⁴

At the state level, a 2017 Mississippi bill created a commission charged with reviewing regulations proposed by licensing boards to ensure that they “increase economic opportunities … by promoting competition” and use “the least restrictive regulation necessary to protect consumers.” ⁵ Such independent active supervision also reduces the state’s liability under federal antitrust law.

Also in 2017, Arizona passed a “cause of action” bill enabling people to go to court to challenge barriers to entry that the state has failed to show are necessary to protect the public. ⁶   Unfortunately, the bill exempts from challenge occupational regulations created by statute—which is most of them. ⁷

Meanwhile, Arizona Gov. Doug Ducey has been trying to rein in excessive occupational regulations. In 2015, he declared a moratorium on regulatory rulemaking by state agencies. ⁸   Two years later, he issued an executive order requiring the state’s licensing boards to report their minimum requirements for licensure and justify any that exceed national averages in “specific reference to potential harm” to state citizens. ⁹   The order also requires boards to report whether a criminal record is an automatic disqualification for licensure, as well as the number of applicants denied a license “due to character concerns,” including a prior conviction. ¹⁰

A 2017 Kentucky law also addresses licensing barriers facing people with a criminal record. It bars licensing boards from disqualifying applicants solely because of a criminal conviction and requires that they grant applicants a hearing before disqualifying them. ¹¹   Boards also bear the burden of proof to show that there is a direct relationship between a prior conviction and a particular occupational license. ¹²

These efforts have the potential to improve the lives of many Americans. They also show that, where there is political will, occupational licensing reform is eminently possible.