2021 Initiative

Recognize licensure across state borders

Recognize licensure across state borders

Dr. James Henry Willis was a licensed psychologist in California for a decade. After retiring and relocating to rural Arizona with his wife, Henry wanted to practice part-time in his new community. Due to state licensure laws at the time, he was prohibited from doing so, despite his years of experience, including supervising clinical training . . . and his town lacking a single private practice psychologist, because he had the “wrong” psychology Ph.D. Even after Arizona adopted its landmark universal license recognition law in 2019, the Arizona Board of Psychologist Examiners was slow to give up its power and denied his application to work. But in May 2020, IJ worked with Henry to successfully pressure the Board to recognize his qualifications and secure his right to work in Arizona, giving him the ability to provide mental health services during this critical time.

Occupational licensing laws—which differ from state to state—create substantial barriers to worker mobility. Licenses often are not recognized across state lines, and even when they are, there can be significant costs—in time and money—to get them recognized. Of course, workers don’t lose their job skills just by moving across state lines, yet licensing laws often treat them as if they do.

Interstate mobility of occupational licensing laws are more important than ever before, especially as workers are rethinking where they live.

To better promote economic opportunity and interstate mobility, the Institute for Justice has co-written model legislation for universal occupational licensing recognition. Inspired by Arizona’s landmark 2019 reform, under the model bill, a state will universally recognize out-of-state licenses and government certifications if the worker is currently licensed by another state and has been licensed for at least one year. In addition, the licensed worker must not have a disqualifying criminal record, not be the subject of a pending investigation, and not have surrendered or had their license revoked due to negligence or intentional misconduct.

Unlike reciprocity agreements and interstate compacts, which exclude workers from nonparticipating states, universal license recognition is less bureaucratic, can be enacted unilaterally, and applies to all states. Moreover, reciprocity agreements and interstate compacts will have the tendency to freeze in place burdensome requirements, which make it harder for states to reform their own laws.

Although an important reform, universal licensing recognition does not address a state’s current licensing requirements, which can be quite burdensome. Check out the “Create jobs for displaced workers through licensure reform” page for more that your state can do.