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State Board Report

August 2015

As more than one-quarter of U.S. workers now require a license to do their jobs, the White House issued a report on July 28 on "Occupational Licensing: A Framework for Policymakers," calling for state legislators to adopt reforms that promote "a more careful and individualized approach to occupational regulation that takes into account its costs and benefits, and harmonizes requirements across State Lines." This would result in "making it easier for qualified workers to find jobs and move where they choose, increasing access to essential goods and services, and lessening heavy burdens on certain populations, such as military families, immigrants, and individuals with criminal records." The report was prepared by the Department of the Treasury Office of Economic Policy, the Council of Economic Advisers and the Department of Labor.

At NASBA’s 2015 Eastern Regional Meeting, a member of the D.C. Board of Accountancy asked what other states are doing about licensing individuals with criminal convictions. The Boards represented had varying responses. According to the White House report: "In half the States, applicants can be denied a license due to any kind of criminal conviction, regardless of whether it is relevant to the license sought or how long ago it occurred. It often takes six months to a year for some States to simply review an applicant’s criminal history and make an initial determination about whether she qualifies for a license." Bloomberg BNA reported that as of January 2015, new laws and policies had been enacted in 13 states that require employers to remove questions about whether a prospective employee has a criminal record.

About 35 percent of military spouses in the labor force are working in professions that require state licenses or certification and these people are ten times more likely to have moved across state lines in the last year than their civilian counterparts. Michelle Obama’s and Jill Biden’s request at the February 2012 National Governors Association meeting to streamline occupational licensing for service members, veterans and their families has met with success: The report finds that all 50 states had streamlined the process for spousal licensing by May 2015.

The White House report observes: "Licensing requirements often make it difficult for immigrants to work in fields where they have valuable experience and training. This deprives the U.S. market of a large share of their skills, and makes it difficult for these workers to make their full contribution to the workforce." The NASBA/AICPA International Qualifications Appraisal Board continues to consider pathways for the State Boards of Accountancy to recognize substantially equivalent non-U.S. professionals.

Although the report recognizes that licensing reform takes place at the state level, it points out: "The President’s FY2016 Budget includes $15 million in new discretionary funding at the Department of Labor to identify, explore, and address areas where licensing requirements create barriers to labor market entry or labor mobility." The first round of grants are expected to go toward developing cross-state reciprocity and another portion would go to discovering criteria that identify occupations for which licensing is not justified. A second round of grants will go to states that are working to reduce licensing barriers.

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