State Policy Network
Iowa removes barriers to jobs and economic opportunity through occupational licensing reform

Iowa has faced a shortage of skilled workers for years. One of the reasons why the state struggles to attract talent is its onerous occupational licensing regulations, which drive skilled workers away and limit job opportunities for Iowans.  

An occupational license is a permission slip from the government to work. You need an occupational license for all sorts of professions—cosmetologist, barber, manicurist, emergency medical technician, and school bus driver. Like most states, Iowa doesn’t accept the occupational licenses of another states, making it harder for workers who move to Iowa to earn a living.

On June 14, 2020, the Iowa Legislature passed occupational licensing reform to remove these barriers to meaningful work. For several years, the Tax Education Foundation of Iowa (TEF Iowa) has been encouraging policymakers to take this step, explaining how it would expand economic opportunity for workers and make Iowa a place where more people want to live and do business.

The new law grants universal recognition of out-of-state licenses. As a result, individuals who are licensed in another state can continue practicing their profession in Iowa without having to repeat the expensive, time-consuming process of applying for another license. This solution follows the 2019 lead of Arizona, the first state to recognize occupational licenses universally. Since adopting universal recognition, Arizona and professionals hoping to thrive there have benefited greatly. Likewise, this policy will help Iowa attract more skilled workers and increase job opportunities as the state recovers from the economic fallout from the coronavirus.

The new law also relieves the financial strain the licensing process can levy on Americans. It waives the initial application and background check fees for Iowans whose household income is at or below 200 percent of the federal poverty level. For low-income Iowans who already struggle to make ends meet, hefty fees shouldn’t prevent them from earning a living and provide for their families.

Finally, the law creates a more standard and fair review process for people with a criminal record. Rather than disqualifying the individuals from work, this process now creates second chances for those whose criminal records aren’t current and who are striving to be productive citizens.

TEF Iowa Deputy Director Walt Rogers observed: “Iowa leaders have been concerned about a skilled worker shortage for many years. With the passage of this historic occupational licensing reform, Iowa will become a more open state for anyone who is willing to put their skills to use.”

Learn more about TEF Iowa’s work to help Iowans at tefiowa.org