Industry Insights & Trends

Trends in Occupational Licensing


Occupational licensing in the United States is a complex topic due to the fact that legislature is determined on a state-by-state basis. Various laws, requirements, and regulations for obtaining, maintaining, renewing, and validating occupational laws make it difficult for many professionals to manage their licenses, particularly if working in multiple states. To better understand this industry, three key trends have been identified below that detail patterns regarding the demographics of occupational licensees, the portability of these licenses between state lines, and the move to make this process more digital. These trends were derived from industry reports on this topic, as well as insights from state licensing organizations and national government websites. Each trend is followed by various insights that depict its relevance, priority, and impact on the occupational licensing market as a whole.

Following these trends, a few key insights were provided that provide further information regarding how occupational licenses are obtained, stored, and verified by professionals and businesses alike. As previously noted, requirements do vary significantly from state-to-state. As a result, references to the offerings available in different states were provided to better exemplify this process.

1. Demographics

  • According to both the U.S. Bureau of Labor Statistics and The State of Occupational Licensing report compiled and published by the National Conference of State Legislatures (NCSL), occupational licensing is positively correlated with gender race, and for the most part, educational attainment.
  • In terms of education, the percentages of employed individuals in the U.S. that have a certification/license based on their highest levels of education completed are as follows:
    • Less than a high school diploma: 8.1%
    • High school diploma: 14.9%
    • Some college, no degree: 21.1%
    • Associate’s degree: 33.4%
    • Bachelor’s degree: 28.5%
    • Master’s degree: 42.9%
    • Professional degree: 78.6%
    • Doctoral degree: 54.6%
  • Women are more likely to have occupational licenses than men. In 2017, the NCSL found that 25% of women and 20% of men in the U.S. held such licenses. The U.S. Bureau of Labor Statistics verified this in 2018, publishing that 21.4% of men and 27.1% of women held occupational licenses.
  • Broken down by race and gender, the percentage of employed persons in the U.S. that have an occupational license include:

2. Licensure Portability

  • More states are beginning to implement policies that permit employees with out-of-state licenses to practice, especially for occupations that are dependent on or heavily impacted by interstate factors (i.e. healthcare, construction, law).
  • Interstate portability of occupational licenses is difficult to enact due to the varying requirements for licenses between states. Each state is responsible for defining the guidelines for obtaining occupational licenses, but interstate compacts set up an agreement between states to abide by the legislation of the other under certain circumstances, such as with regard to occupational licensure.
  • In the case of natural disasters or states-of-emergency, the following states permit out-of-state workers to work without meeting state requirements:
    • Kansas
    • Mississippi
    • Ohio
    • Oregon
    • South Carolina
    • Texas
    • Utah
    • Virginia
  • Other states have implemented universal licensing laws, which allow any out-of-state professional to practice in the state so long as they meet other requirements, such as having held an occupational license for at least one year, being in good professional standings, and not having any pending allegations in their home-licensed state. These states include:
    • Arizona
    • Montana
    • New Jersey
    • Pennsylvania
    • Idaho
  • States that permit out-of-state licensed employees to work are typically verified using security paperwork, background checks, and fees. Some states also require applicants to pass a state licensing exam in order to qualify for the universal licensing laws.
  • In 2019 alone, almost 100 bills were introduced across various states regarding increasing licensure mobility and interstate compacts. A bill in West Virginia introduced in 2019 also aims to convert military experience to a state license for certain occupations, bypassing state regulations for experience.

3. Switch to Digital Licensing

  • The COVID-19 pandemic acted as a catalyst for obtaining, verifying, and inspecting business/occupational licenses digitally throughout the U.S. Some states have begun building online platforms that allow professionals and businesses alike to manage their licenses, while others have made it possible for state officials to inspect establishments remotely and look up licenses of any employee at any time.
  • According to a study conducted by DocuSign and the Center for Digital Government (CDG), 21 states in the U.S. allow professionals to apply for occupational licenses online.
  • The states of Washington and Ohio both offer a single online portal for all available occupational licenses. Other states are expected to follow suit in coming years, as it simplifies the process for licensing and standardizes benchmarks. Below are other examples of states that offer online services for obtaining occupational licenses:
    • Texas: Occupational Licensing Electronic Application (OLEA)
    • Maryland: Electronic Licensing and Online Forms

Validating & Storing Occupational Licenses

State Government Verification Portals

National Licensing & Registration Boards

State Laws for Displaying Licenses

  • Laws for whether a licensee is required to maintain a copy of and/or display their occupational license vary from state to state. However, many do require that licenses are either displayed or can be shown upon demand. These laws make it possible for anyone to look up a license trough state government websites, as the components listed on the license (i.e. license number, name, type) are the same required for online verification forms.
  • In Arizona, for example, a place of business must have a license displayed (although it can be conspicuous), and all employees must have a copy of their occupational licenses in some form at all times. This tends to be the law in numerous other states, as well.
  • In Pennsylvania, business licenses must be publicly displayed in a location that can be read without difficulty by customers. Licenses that are contained via a scannable code must be visible and accessible without assistance. At any point in time, a state representative from the Department of Permits, Licenses and Inspection (PLI) may also inspect a business and its employees to verify licenses.
  • Most states charge a small fee for professionals to obtain a paper copy of their occupational licenses. In California, a photocopy of a licensee file is $20, a print-out of a licensee record is $5, and a certification letter for an occupational license is also $5. Electronic copies, on the other hand, very in cost by occupation and license type.

Glenn is the Lead Operations Research Analyst at Simple Manifestation with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.

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