Occupational licensure reform: 2019 and beyond


Janet Haebler MSN RN                                                                                                             

The 2018 midterm elections clearly got voters’ attention with reportedly the highest turnout since 1952 which ushered in a flood of new faces to state legislatures nationwide. More than 23 percent of state legislative seats will be filled by new policymakers, including record numbers of women. New governors were also elected in nineteen states. What might this mean for policies in 2019?

As different as the political and social landscape may be from state to state, commonalities exist. Stimulating the economy is a consistent priority. While many states boast they’ve experienced a recovery from the 2007-2008 recession, increasing revenues and limiting expenses is important for continued investment in business and workforce growth. Policymakers as well as employers face challenges in identifying what the workforce needs will be for the future and how to sustain growth, while simultaneously putting out fires regarding current needs. Healthcare is a prime example that has seen regional shortages, changes in practice delivery, and a widespread desire to increase diversity. As such, it seems logical that barriers and opportunities for entry into the workforce should be examined, a discussion which inevitably touches on the question of occupational licensure.

Currently one in four occupations in the US necessitates a license and requirements can vary significantly from state to state. One quarter of all licensed workers are in health care. The acceleration of licensure requirements in the past several decades has drawn criticism for creating unnecessary challenges to enter the job market while limiting mobility between states. Licensure has been justified by legislators and advocates as essential to protect the public from low quality services and/or potential health risks. But studies have been inconclusive that licensing has increased quality. Some have argued that licensure has not only created a barrier for certain populations to entering the workforce but has also limited competition and resulted in increased costs for the consumer.

A 2015 report entitled Occupational Licensing Framework for Policymakers from the U.S. Council of Economic Advisers and Departments of Labor and Treasury spurred a number of states to introduce legislation that would lessen barriers to entry caused by occupational licensing, find the least restrictive form of regulation, and continue to ensure the health and safety of the consumer. The report noted that current licensure rules impose burdens on workers, employers, and consumers, and “too often are inconsistent, inefficient, and arbitrary.”

Triggered by the 2015 report, the Department of Labor’s Employment and Training Administration awarded funding to the National Conference of State Legislatures, in partnership with The Coun­cil of State Governments and National Governors Association Center for Best Practices, to launch a three-year project that would: 1) ensure that existing and new licens­ing requirements are not overly broad or burdensome and don’t create unnecessary barriers to labor market entry; and 2) im­prove portability for selected occupational licenses across state lines. The national partners are convening state policymakers and experts in the field of occupational licensing, producing research, including a report, and delivering technical assis­tance to states.

Supporters for de-regulation contend licensure growth can negatively influence wages and increase cost to the consumers. It is suggested that the cost to attain and maintain a license can be transferred to the consumer with higher charges for services. Licensure processing can lead to a delay in employability, while varying licensure requirements between states can restrict mobility across state borders.

Nursing is not an occupation that’s included in the current grant-funded research, but there are potential impacts for the profession as interest in occupational licensure reform increases. Nursing practice is still not well understood by the public. While the physical skills and tasks are recognized, the cognitive function is least appreciated. A lack of understanding of the intricacies of an occupation can lead to decisions with unintended consequences.

For example, removing licensure requirements or modifying licensure standards for other healthcare workers can influence nursing practice and care, as well as services delivered. We have seen state legislation to support military members transitioning to civilian life. Specific to nursing, veterans with healthcare experience are awarded credit in lieu of completion of a nursing education program for eligibility to take the National Council Licensure Examination (NCELX). Removing the licensure requirement for nursing assistants, medication aides and/or similar healthcare workers has caused mixed reactions for the healthcare worker, the employer, and patients/consumers.

At the center of these discussions are state policymakers, who establish most occupational licensure requirements and for whom the goals of consumer protection and economic opportunity and growth are of interest. As with any proposed policy change, it’s critical to consider the potential unintended consequences. Regardless of your perspective, it’s in everyone’s best interest to actively join our elected officials in these conversations.

Preliminary findings of the grant project can be found here.

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