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What Is an Occupational License?

An occupational license is a credential that the government—most often states—requires a worker to hold in certain occupations. Aspiring workers must meet state-specific educational, training, testing and other requirements to practice in a licensed profession. Occupational credentials are mandatory in the relevant jurisdiction and are intended to set professional standards and ensure safety and quality of work. Licenses can span across many industry sectors from health care to cosmetology to legal or real estate occupations.   

Demographic and Economic Information

Research from the Bureau of Labor Statistics shows that among all people with criminal records, communities of color face higher levels of discrimination while seeking employment. While Blacks make up 12.6% of the population, they constitute 27% all arrests. Black males between the ages of 18 and 19 are 11.8 times more likely to be incarcerated than white men of the same age. Black females are twice as likely to be imprisoned than white females.   

The economic impact of barriers to employment for those with criminal records is another area of active research. The American Bar Association Journal of Labor and Employment Law notes that young offenders' employment rates may not recover to pre-incarceration rates until up to five years after release. These same offenders earned approximately one-and-a-half times less than those not incarcerated. An NYU Law report estimated a loss of approximately $372.3 billion per year if grouping the losses of incarcerated individuals. Further, white individuals with conviction records suffered an average lifetime earnings loss of $267,000, while Black individuals suffered an average loss of $358,900 and Latinos suffered an average loss of $511,500 over their lifetimes.  

Impacts of Occupational Licensing

Obtaining a job and staying employed is a critical step for formerly incarcerated individuals to cultivate a sense of purpose, foster prosocial connections and build financial resources. Research from the Harry S. Truman School of Public Affairs at the University of Missouri uses data from the Missouri Department of Corrections to demonstrate the relationship between correction education, employment and recidivism. The research from the project shows that recidivism rates are nearly cut in half for returning citizens who have full-time jobs compared with those who are unemployed. However, occupational licensing requirements can be among the most difficult barriers faced by people with criminal records seeking to enter the workforce.   

The National Inventory of Collateral Consequences of Conviction is a database which documents the restrictions that prevent "people convicted of crimes from accessing employment, business and occupational licensing, housing, voting, education, and other rights, benefits, and opportunities." The Inventory reports that there are more than 13,000 collateral consequences on “occupational and professional licensure and certification” for those who have been convicted of a crime.  

Policy Barriers to Employment

Overarching Bans    

Many state licensing laws include some type of automatic or blanket disqualification that include prohibitions for people with criminal records—particularly for felony convictions that are deemed violent or serious offenses. This means that boards have no discretion to grant a license or forego imposing a license penalty if an individual has a disqualifying conviction. 

For many state leaders, a statute that creates an automatic lifetime ban against anyone with a violent felony or a sex offense for an occupational license may seem reasonable. However, even assuming one’s record is accurate, such categories and labels can be misleading if licensing boards do not use due diligence to examine the nature of the offense. For example, seeing an “assault” on a person’s criminal record may imply a propensity for violence but without knowing the circumstances of the offense—such as age, frequency or context—an automatic denial could unfairly exclude strong applicants.   

“Good Moral Character” clauses   

While public health and safety dictate that some criminal convictions should disqualify applicants for certain kinds of jobs, in many cases, a criminal conviction of any kind can be an obstacle to licensure. Licensing regulations often refer broadly to “good moral character” as a requirement for holding a license, and in practice this has, in many cases, been interpreted to ban individuals with any criminal record. 

Licensing authorities in these instances are left to analyze what constitutes “good moral character” without much guidance. This may lead to a licensing process that lacks transparency, predictability, and consistency, making it harder for workers to determine if their past conviction may be disqualifying for a certain profession. People with criminal records might take on a substantial risk if they invest their time and money to train and meet the required educational parameters for an occupation, only to be barred in the licensing process.  


The financial cost of occupational licensing requirements is heightened for people who were formerly incarcerated. Individuals and their families experience loss of income during the incarceration period and are faced with a lack of income to support themselves upon release. Many formerly incarcerated people struggle with homelessness due to their inability to obtain stable employment and certain housing restrictions placed on people with criminal records. A 2023 study from Duke Law determined that the rate of homelessness among formerly incarcerated individuals is 10 times higher than that of the general population, 50% higher for justice-impacted Black individuals than for justice-impacted white individuals. 

The pursuit of obtaining an occupational license requires a financial investment on top of the other requirements. A person who wants to pursue a career as a licensed barber, for example, may have to pay between $70 and $165, have over a year of education and experience, and complete an average of two exams. Because all 50 states and Washington, D.C., require a license to work as a barber, moving across state lines does not offer relief from these restrictions to licensure in many cases.  

Policy Options to Reduce Barriers

Reforms to expand access to licensure for individuals with criminal histories are generally known as "fair chance licensing policy." These policies focus on the twin goals of seeking to encourage rehabilitation of criminal offenders while also protecting public safety. The policy options reviewed below focus specifically on those relevant to this population, but it is important to note that broader reforms can also impact those without criminal records. Information on broader tools and frameworks that can be used to help refine a state’s regulatory approach are outlined in “Occupational Licensing Final Report: Assessing State Policies and Practices."   

Removing Overarching Bans  

Many states have removed the mandatory barriers that apply to specific violent or serious disqualifying offenses. Overarching bans still exist, but they have often become discretionary measures that licensing boards may or may not impose. This allows the licensing entity to evaluate other factors such as age, frequency or context of the criminal conviction and the rehabilitation status of the individual instead of issuing an automatic denial.   

The Council of State Government's Justice Center displays an interactive map of various fair chance licensing reforms, including the removal of automatic disqualification. By clicking on the reform types, the map will show the states who have policies that are fully implemented, partially implemented or not implemented.   

Idaho has implemented its own version of this policy by providing discretionary approval to the licensing entity as well as providing a conditional license option to candidates who are in the process of completing probation. The conditional license may be used for one year while the candidate completes all probational conditions, after which they will be issued a full, unrestricted license. Other states like DelawareIndiana and Maryland have all removed automatic disqualifications and provide discretionary approval to licensing bodies.   

Relevancy limitations   

Another common policy mechanism aims to assess whether convictions have a “direct, rational, or reasonable relationship” to the duties of an occupation. These reforms are often known as relevancy limitations. Prohibiting “blanket bans” in favor of fair evaluations and individualized consideration allows licensing entities to examine each application on its merits and promote qualified applicants. Proponents reason that it may also allow people with criminal records to explain inconsistencies in background checks, including arrests that did not lead to a conviction.   

According to Institute for Justice's nationwide study on occupational licensing barriers for ex-offenders, 45 states have established a standard level of relationship/relevance between an applicant's criminal record and the license they wish to obtain. However, the level varies state-to-state. For example, some states might require a "directly related" standard, while others use a "substantially related" status or a "rational relationship."  

In the case of a denial or revocation of a license, Illinois requires its Department of Financial and Professional Regulation to provide an explanation of how the conviction "directly relates to and prevents the person from effectively engaging in the position for which a license, registration or certification is sought." Similarly, Idaho amended its original Occupational Licensing Reform Act to stipulate that a licensing authority shall not deny, suspend, revoke or discipline a license before evaluating the following factors:   

  • The nature and seriousness of the crime for which the individual was convicted. 
  • The relationship of the crime to the ability, capacity and fitness required to perform the duties and discharge the responsibilities of the occupation. 
  • The passage of time since the commission of the crime. 
  • Any evidence of rehabilitation or treatment undertaken by the individual.  
  • Any other relevant factor.

Time Limits   

Return-to-prison rates have dropped considerably in recent years. The Council on Criminal Justice measured the likelihood of returns to prison of those released in 2005 to those released in 2012. "During the first year following release, data showed 19.9% of the 2012 group returned to prison compared with 30% of the 2005 cohort. Their analysis found that the three-year prison return rate—the most commonly used metric to measure recidivism—fell from about 50% to 39%." This significant reduction persisted throughout their five-year study.   

To account for lower rates of recidivism after a period of years, licensing reforms have included time limits on the consideration of certain criminal records. Some states, such as California and Maine have blocked licensing boards from considering a criminal record older than a range of three to 10 years from the date of conviction or release. In Delaware, the board of massage therapy may not consider a conviction where more than 10 years have elapsed since the date of conviction, with the exception of a conviction for any felony sexual offense.   

In contrast to providing an exact number of years as a standard, some states have opted for a broader condition. These broader conditions merely require agencies to consider "the time elapsed since the crime was committed" before denying an applicant access to licensure. For example, Arizona mandates license agencies must consider the passage of time since the crime prior to determining disqualification. These measures prevent workers from continuing to face barriers to work after a significant time has passed since their last involvement with the justice system.   

Establish Prequalification Standards   

Some states have mandated that licensing entities allow people with criminal records to petition the board for a “pre-qualification” opinion. Prequalification allows an applicant to petition a licensing board for a determination on eligibility before going through the licensing application process and taking on the associated fees. Licensing boards are also required to explicitly list disqualifying offenses and notify applicants if their offense will disqualify them from licensure. This process helps ensure that people with criminal records can devote their time and resources to occupations that will lead to gainful employment.   

According to The Council for State Governments, at least 24 states have implemented a pre-qualification standard to alleviate the risk assumed by potential applicants. Louisiana requires licensing entities to inform the individual whether, based on the criminal record information submitted, the individual is disqualified from receiving or holding a license. The licensing entity must provide this information no more than 45 days after receiving a request. Similarly, Connecticut passed legislation in 2022 which created a process for individuals convicted of a crime to find out if their conviction disqualifies them from practicing these occupations. This process involves applicants providing information about their conviction to the relevant licensing entity, which must respond within 30 days with a determination.   

Some states, such as Wyoming and Kansas provide that these prequalification determinations are non-binding. Therefore, individuals with criminal records must still proceed with caution even after establishing eligibility in one occupation.  

Clearing Criminal Records  

One recent legislative trend is to provide applicants with a fair chance at employment through the clearing of criminal records. This means removing conviction and arrest history questions from job applications and delaying background checks until late in the hiring process (also known as “Ban the Box” policies).   

Every state has a procedure that allows some people with criminal records to clear them by petitioning a judge or court. These procedures, however, can be baffling and cumbersome. In many instances, people are never notified or instructed if, when or how their records can be cleared. Sometimes, the process is so complicated and the terminology so confusing that it requires hiring an attorney or paying expensive filing fees. State lawmakers are increasingly interested in statutory provisions that automatically clear a person’s criminal record. At least 10 states, including MichiganNew JerseyNew MexicoPennsylvania, and Utah have enacted legislation that automates the record clearing process, sometimes known as “clean slate laws.”   

Data Collection  

As states consider occupational licensing policy options, data collection can also be an important tool. Collecting applicant demographic data can help identify who is excluded from licensed work. Data collection also allows states to understand the effects of the licensing policy and identify and address any gaps that may arise. However, a significant limitation to data collection is the inability to determine who is not applying for a license due to existing regulations or uncertainty of how standards are applied. California requires boards to collect data regarding the number applicants who are denied licensure as well as applicants who appealed any denial or disqualification of licensure. Collecting this information can help states like California determine the efficacy of these policies and analyze the way formerly incarcerated individuals operate within licensing systems.  

Selected Recent Enactments in the States (2019 - 2023)






Legislation, enacted 

H.B. 2067 – Allows the court to issue a certificate of second chance to persons who have had a judgment of guilt set aside. Effectively releases the person from barriers in obtaining an occupational license that resulted from the criminal conviction, given the person is otherwise qualified for licensure.  


04/01/2021 – Signed  


Legislation, enacted 

H.B. 1098 – Requires that Department of Regulatory Agencies (DORA) to audit the occupations they regulate to determine barriers to entry for individuals with a criminal history, and specifies procedures for denying a professional license, certification, or registration. 


5/25/2022 – Signed  


Legislation, enacted   

B 63 – Enacts provisions providing for automatic expungement of certain misdemeanor and felony offenses.    

01/03/2023 – Signed    


Legislation, enacted  

H.B. 2418 – Provides for the sealing or vacation and expungement of trafficking victims’ crimes.  

06/09/2023 – Signed   


Legislation, enacted   

H.B. 1047 – Reestablishes the Criminal Records Review Committee and directs the committee to submit a final report that includes its findings and recommendations to the legislature.  


07/19/2023 – Signed    


Legislation, enacted   

S.B. 2909 – Directs the Bureau of Criminal Apprehension to maintain a computerized data system relating to certain misdemeanor and felony offenses that may become eligible for expungement.    


05/19/2023 – Signed     


Legislation, enacted 

S.B. 2 – Provides for expungement of arrest and conviction records for certain cannabis offenses. Concerns the dismissal of sentences of incarcerated persons and revises the list of criminal records that cannot be considered in an application for public employment, licensure, or other authority to practice a trade, business, or profession.  


04/12/2021 – Signed  


Legislation, enacted  

A 1029— Established provisions providing for automatic expungement for certain misdemeanor and felony convictions.  

11/16/2023 – Signed   


Legislation, enacted 

H.B. 1373 – Requires certain licensing entities to list criminal records that disqualify applicants from licensure. The criminal records must be directly related to the duties and responsibilities of the occupation.  


05/14/2019 – Signed 


Legislation, enacted   

S.B. 19 -- Provides that all public records of a person who has been charged with a misdemeanor or felony shall, upon petition by that person, be removed and destroyed without cost to that person.     


05/05/2023 -- Signed   


Legislation, enacted   

H.B. 1000 -- Provides that a person who was convicted of illegal registration or voting is eligible for expunction.    

04/28/2023 – Signed    


Legislation, enacted 

H.B. 431 – Creates a process for automatic expungement or deletion of charges for which an individual is acquitted, charges that have been dismissed with prejudice, and certain convictions. Requires identification of cases that may be eligible for automatic expungement or deletion.  


03/28/2019 – Signed  


Legislation, enacted 

S.B. 233 – Provides a pre-application determination regarding whether an 

applicant’s criminal background would disqualify the applicant from licensure. An 

applicant would pay a $25 fee for a second chance determination request, and this fee would be deducted from the license application fee if the applicant does thereafter seek licensure. 


09/23/2020 – Signed  


Legislation, enacted 

H.B. 1874 – Revises the process for an individual with a criminal conviction to request a determination of whether that criminal history is disqualifying for obtaining a professional license administered by the Department of Licensing 


03/11/2022 – Signed  


Recognizing the barriers people with a criminal history face to entering the labor market, state policymakers across the country are actively addressing the challenges through legislation and executive orders. Overarching bans, “good moral character” requirements and licensing fees can all be particularly difficult barriers for this population to overcome, which may be restricting a significant portion of workforce supply. Through “fair chance” policy options that include recent and relevant convictions, time limits on consideration of certain convictions, and implementation of prequalification standards, policymakers can reduce unintended barriers to the labor market for people with criminal records.  

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Related Resources

Highlights continued legislative interest in occupational licensing policy issues throughout 2023. Trends included enhancing license portability, streamlining licensure processes and requirements, and reducing barriers to licensure for specific groups.