Colorado has been a prized destination for people moving to advance their career or to enjoy nature. This session, the legislature has a chance to make it easier to welcome new residents to this great state with SB 22-116.
The Red Tape Reduction Act, currently under review in the Senate, is designed to make it easier for people to move to Colorado and begin working. For many jobs this isn’t an issue — people can move and immediately begin working on their start date. But if your job requires a professional license, then moving to a new state will force you to spend time and money to obtain a new license and begin working. Professionals often must take exams, pay fees and even undergo education and training again. This hassle is high enough to prevent people from moving.
Why do these barriers exist for some professions? States pass occupational-licensing laws to protect consumers from harm and ensure a minimum level of quality. State licensing boards monitor professionals in an effort to uphold standards of practice. Because they are passed by states, when professionals move to a new state, they are forced to demonstrate their ability again. Most states lack a mechanism to easily do that, so moving can be more difficult for licensed professionals.
But this is beginning to change. Since 2019, ten states have passed laws universally recognizing licenses from other states. Universal recognition laws reduce barriers for licensed professionals who move to a new state. Colorado passed a version of this reform two years ago and is looking to make the reform work more smoothly.
Licensing is one of the most important labor market institutions. Around 20% of the labor force must obtain a license to able to legally work. Research has found that individuals in licensed professions move between states at a 7% lower rate. So finding a way to reduce the licensing burden should help encourage people to move to a new state.
With the rise in remote work, removing unnecessary regulatory hurdles is important. You don’t want to miss out on remote workers moving to Colorado because their spouse has trouble transferring their license and can’t afford to take three months off of work.
Universal recognition would simplify and streamline the re-licensing process. The proposed bill would accept the license for any professional licensed in another state for at least a year without disciplinary actions. This is an improvement over current law that slows the process down with unnecessary bureaucracy.
Consumer protection is not undermined by universal recognition. It still requires that professionals demonstrate their skills and ability. What universal recognition does is trust other states’ professional regulations making it easier for professionals to move to Colorado. Occupational licenses are meant to ensure competence. Whether they are issued by Colorado or another state should not matter.
SB 22-116 goes even further with another important reform. It would also accept relevant military training toward meeting licensure requirements. Licensing laws rarely accept military training, even when that training exceeds the licensing requirement. As a result, veterans are forced to enroll in educational programs despite their training and experience or forego employment in that profession. Veterans have difficulty transitioning back to civilian life and finding meaningful employment without licensing laws adding unnecessary complications.
Accepting relevant military training would help veterans find work using the experience gained from their services. It would also help consumers, who would have access to more quality professionals right in their community.
Colorado has the chance to join the growing movement for reforming licensing laws to make it easier for professionals to move to a new state. Since Arizona passed the first universal recognition law in 2019, more than 4,600 professionals took advantage of the new simplified process. The same can happen in Colorado.
Moving to a new state is difficult, but occupational licensing laws can make it even more complicated. Colorado is a great place to live and work. And by passing universal recognition, we can make it that much easier for talented professionals to move and start working.