Unlicensed & Untapped: Removing Barriers to State Occupational Licenses for People with Records

Executive Summary

Nearly one in three U.S. adults has a record in the criminal justice system. It’s hardly uncommon, but the resulting stigma and its lifelong consequences prove devastating for many. Sonja Blake is one of the estimated 70 million people in the United States who have an arrest or conviction record.^[i] Ms. Blake, a grandmother, cared for children at her Wisconsin in-home daycare center.^[ii] After nearly a decade in business, her daycare-owner certification was permanently revoked after a change in state law, because of a 30-year-old misdemeanor conviction for overpayment of public assistance.

Ms. Blake is one of the more than one-quarter of U.S. workers who require a state license to practice their occupations.^[iii] In addition to the more typically known regulated jobs, such as nurses and teachers, many occupations in sales, management, and construction also require a state license.^[iv] Critics of licensing argue that regulating occupations does little to advance safety or quality of service and instead negatively impacts consumers and low-wage workers.^[v] Others counter that state licensing for certain jobs is necessary to maintain public safety and results in higher practitioner wages and greater respect for the profession.^[vi] Despite this disagreement over the value of licensing, common ground can be found in the call to reduce unnecessary conviction barriers to occupational licenses.

Passing a criminal background check is a common requirement to obtain a state license. In fact, the American Bar Association’s inventory of penalties against those with a record has documented 27,254 state occupational licensing restrictions.^[vii] Thousands of these restrictions vary widely among states and professions. And because the criminal justice system disproportionately impacts people of color, these extrajudicial penalties—known as “collateral consequences”^[viii]— perpetuate racial disparities in employment.

Although no national data exists as to the number of people denied licenses because of these collateral consequences, analogous data is available in the hiring context. For example, after submitting a job application, people with records on average are only half as likely to get a callback as those without a record.^[ix] And for black men with records, the impact is more severe—only one in three receive a callback.^[x] Thus, having a conviction record, particularly for people of color, is a major barrier to participation in the labor market.

The Landscape of State Occupational Licensing Barriers

This paper examines the significant flaws in state occupational licensing criminal background check requirements.^[xi] One barrier to employment that regularly appears in state occupational licensing laws is the blanket ban, which automatically disqualifies people with certain records. As a gauge for the frequency of blanket bans in licensing laws across the nation, the ABA Inventory reports over 12,000 restrictions for individuals with any type of felony and over 6,000 restrictions based on misdemeanors.^[xii] In addition, the ABA Inventory reports over 19,000 “permanent” disqualifications that could last a lifetime^[xiii] and over 11,000 “mandatory” disqualifications, for which licensing agencies have no choice but to deny a license.^[xiv]

Another aspect of the barriers facing workers with records is the prevalence of overly broad criminal record inquiries. The rationale for far-reaching inquiries is ostensibly compelling—licensing agencies seek robust information to advance public safety and health. No research, however, supports the persistent misconception that a workplace is less safe if an employee has a past record. Thus, even seemingly rational inquiries frequently operate as overly broad bans against anyone with a record.

License applicants with records face additional challenges presented by a lack of transparency and predictability in the licensure decision-making process and confusion caused by a labyrinth of different restrictions. Requirements for a single occupation vary widely across states, as do the standards applied to evaluate past offenses. Further complicating matters, the statutory language and procedures governing individual, or classes of, professions often differ from more general state licensing statutes.

The common use of vague statutory terms, such as a “good moral character” requirement or restrictions against offenses of “moral turpitude,” leaves workers without clarity as to whether their past conviction is a disqualification. Without any procedural safeguards, guidelines, or limits on discretion, this opaque process may shroud automatic denials.

Recommendations for Fairer State Licensing Laws

In response to this maze of barriers, we recommend a comprehensive overhaul of licensing laws to incorporate standards that promote greater transparency and accountability—ultimately producing fairer, more consistently applied licensing laws. We provide a Model State Law in the Appendix, which incorporates our Recommendations. In addition, we have analyzed the general licensing laws of 39 states and the District of Columbia that, to some degree, restrict most licensing boards’ consideration of arrest and conviction records.^[xv] Only 11 states lack any form of such general laws.^[xvi] Although the quality and effectiveness of the laws vary widely, these overarching laws largely aim to ensure some basic level of fairness for applicants with records. To identify areas for improvement, NELP compared the 40 laws across four criteria:

1. Does the law prohibit the blanket rejection of applicants with conviction histories?
2. Does the law incorporate “EEOC factors,” which include consideration of whether a conviction is occupation-related and how much time has passed since the conviction?^[xvii]
3. Does the law limit the scope of record inquiry or the consideration of certain types of record information?
4. Does the law require consideration of rehabilitation?

After evaluating each state law based on the four criteria listed above, NELP combined those scores to arrive at an overall rank of the law and grouped them into five tiers, from best to worst: (1) Most Effective, (2) Satisfactory, (3) Needs Improvement, (4) Minimal, and (5) Unsatisfactory. Our detailed assessment of the laws is included in the State Report Cards in the Appendix. Based on the limited criteria considered here, only one state law was graded “Most Effective”; and only five states received a “Satisfactory” grade.

1. Most Effective (1): Minnesota
2. Satisfactory (5): Connecticut, Hawaii, Maine, New Hampshire, New Jersey
3. Needs Improvement (6): Arkansas, California, Colorado, New Mexico, New York, North Dakota
4. Minimal (18): District of Columbia, Illinois, Indiana, Kansas, Maryland, Massachusetts, Michigan, Missouri, Montana, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Virginia, Washington, Wisconsin
5. Unsatisfactory (10): Arizona, Delaware, Florida, Georgia, Kentucky, Louisiana, Rhode Island, South Carolina, Utah, Vermont

• No overarching law (11): Alabama, Alaska, Idaho, Iowa, Mississippi, Nebraska, Nevada, South Dakota, Tennessee, West Virginia, Wyoming

Whether motivated by a desire to advance economic growth and public safety, maximize human potential, or address racial bias, fairer occupational licensing laws will benefit our communities. To that end, we propose the following reforms:

1. Consistent with the EEOC guidance^[xviii] and research, remove automatic blanket bans from the laws.
2. Limit the scope of criminal record inquiry for state licenses to reduce bias in the assessment of license applicants.
3. Require assessment of candidates for licensure on a case-by-case basis, incorporating a standard that examines whether a conviction is occupation-related and how much time has passed since the conviction.
4. Mandate consideration of license applicants’ rehabilitation and mitigating circumstances prior to any disqualifications based on the record.
5. Provide license applicants notice of potential disqualifications and a fair process that allows the opportunity to respond prior to any disqualifications based on the record.
6. Eliminate any self-reporting in the licensure application process, and “ban the box” from the application.
7. Remove vague and overbroad standards, such as “good moral character” and restrictions against “moral turpitude” offenses.
8. Evaluate the state landscape of occupational licensing restrictions, and incorporate ongoing data collection to facilitate entry into professions for qualified applicants with records.
9. Promote transparency by providing clear guidance to license applicants regarding potential disqualifications for the occupation.
10. Create fairer, more uniform standards by incorporating these recommendations in a broadly applicable state licensing law that supersedes individual state licensing laws containing criminal record restrictions.

Responsible policymaking must acknowledge that licensure barriers rest on a shaky foundation—a criminal justice system born from systemic racism.^[xix] In addition, we all benefit when individuals willing to contribute to their communities and families are permitted a pathway to professional work and become more financially stable. Just as policymakers from across the political spectrum have invested in job opportunities for people with records by adopting ban-the-box policies that delay conviction history inquiries and by enacting fair-chance hiring laws,^[xx] now is the time for legislators to alleviate criminal record barriers embedded in state occupational licensing laws.

[i] Research Supports Fair Chance Policies, NELP (March 2016), www.nelp.org/publication/research-supports-fair-chance-policies/.

[ii] Facts regarding Ms. Sonja Blake’s case are derived from Appellant’s Brief, Blake v. Jossart, 868 N.W. 2d 198 (Wis. Ct. App. 2015) (No. 2012AP2578), review granted, 872 N.W. 2d 668 (Nov. 4, 2015), and from email correspondence with Sheila X. Sullivan, Road to Opportunity Project Director, Legal Action of Wisconsin (March 2016).

[iii] The White House, Occupational Licensing: A Framework for Policymakers (July 2015), at 3, www.whitehouse.gov/sites/default/files/docs/licensing_report_final_nonembargo.pdf.  The White House reports that the percentage of the workforce covered by state licensing laws has grown five-fold since the early 1950s. Id. at 17. The most recent estimates indicate that over 1,100 types of occupations are licensed, certified, or registered in at least one state. See id. at 7.  For simplicity, this report refers to “licensing” as a catch-all term and does not distinguish between licensing, certification, and registration, unless specifically noted.

[iv] See id. at 21.

[v] See e.g., Morris M. Kleiner, Reforming Occupational Licensing Policies, The Hamilton Project (Jan. 2015), at 13. The Hamilton Project estimates that such restrictions eliminate as many as 2.85 million jobs nationwide and raise consumer expenses by $200 billion per year. Id. at 6.

[vi] For example of discussion of benefits of licensing, see supra note 3 at 11.

[vii] Am. Bar Assoc., National Inventory of the Collateral Consequences of Conviction, www.abacollateralconsequences.org (accessed March 28, 2016) (hereinafter “ABA Inventory”). The inventory includes information for all 50 states, the District of Columbia, and all U.S. territories. Note that the inventory codes disclosures of backgrounds or background check requirements as freestanding entries in some cases, which may or may not include a specific restriction. See ABA Inventory, User Guide, Question and Answer 10. The “occupational and professional licenses and certification” includes most professional licensure requirements, among other licenses. The category “business licenses and other property rights” licenses to operate certain facilities and to engage in specific industries. The user guide for the ABA Inventory cautions that the “difference between professional and business licensure will not be clear, and a comprehensive search should select both categories.” See ABA Inventory, User Guide, Question and Answer 13. We followed this recommendation for the purposes of the estimate and included both the professional and business licensure categories for all jurisdictions in the United States available for the search, except for “federal.”

[viii] See Margaret Colgate Love, Jenny Roberts, & Cecelia Klingele, Collateral Consequences of Criminal Convictions: Law, Policy and Practice (Thomson West, 2013). This volume is a comprehensive resource for practicing attorneys, judges and policymakers on the legal restrictions and penalties that flow from a conviction beyond the court-imposed sentence. See Collateral Consequences of Criminal Convictions: Law, Policy and Practice Offers Roadmap to the Restoration of Rights After Conviction, Nat’l Ass’n Criminal Def. Lawyers (Feb. 21, 2013), www.nacdl.org/News.aspx?id=26526.

[ix] Devah Pager, The Mark of a Criminal Record 108 Am. J. Soc. 937, 960 (2003).

[x] Id. at 959.

[xi] Although many of the pitfalls and potential solutions discussed here also apply to the federal context, we focus on the universe of state laws.

[xii] Search of nationwide “any felony” offenses resulted in 12,669 restrictions in occupational and professional licenses and business licenses categories in the ABA Inventory; search for “any misdemeanor” offenses resulted in 6,372 restrictions. ABA Inventory (accessed March 24, 2016).

[xiii] ABA Inventory, User Guide, Question and Answer 7.

[xiv] Search of nationwide “permanent” offenses resulted in 19,786 restrictions in occupational and professional licenses and business licenses categories in the ABA Inventory; search for “mandatory/automatic” offenses resulted in 11,338 restrictions. ABA Inventory (accessed March 24, 2016).  Definition of “mandatory” provided in ABA Inventory, User Guide, Question and Answer 2.

[xv] NELP identified a total of 40 jurisdictions that have enacted overarching licensing statutes and regulations. In preparing this analysis, we began by reviewing pre-existing research addressing state occupational licensing restrictions. See, e.g., Margaret Colgate Love, Nat’l Ass’n Criminal Def. Lawyers Restoration of Rights Project, http://ccresourcecenter.org. We analyzed the text of the laws, reviewed case law, and then contacted state legal advocates, where possible, regarding both our statutory interpretation and any relevant context or laws. Despite our efforts, we recognize that some relevant laws or case law may have been overlooked. We are grateful for any corrections; please contact Michelle Natividad Rodriguez at mrodriguez@nelp.org.

[xvi] Ala., Alaska, Idaho, Iowa, Miss., Neb., Nev., S.D., Tenn., W. Va., and Wyo.

[xvii] EEOC factors are derived from the U.S. Equal Employment Opportunity Commission’s Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (Apr. 25, 2012), at 11, 16, www.eeoc.gov/laws/guidance/arrest_conviction.cfm (hereinafter “EEOC Guidance”).

[xviii] Id.

[xix] See, e.g., Michelle Alexander, The New Jim Crow: Mass Incarceration in the Age of Colorblindness (The New Press, 2010).

[xx] Michelle Natividad Rodriguez & Beth Avery, Ban the Box: U.S. Cities, Counties, and States Adopt Fair-Chance Policies to Advance Employment Opportunities for People with Past Convictions, NELP (April 2016), www.nelp.org/publication/ban-the-box-fair-chance-hiring-state-and-local-guide/.