N.H. becomes first New England state to grant universal license recognition

Two weeks after New Hampshire posted a record-low unemployment rate of 1.9%, Gov. Chris Sununu signed two bills to make it easier for licensed professionals from other states to work here. 

New Hampshire requires state-issued licenses for dozens of occupations, from barbers and cosmetologists to doctors, landscape architects, and even foresters. For decades, anyone who held an out-of-state license to practice in one of these fields had to first get a separate New Hampshire license before being allowed to practice here. 

House Bill 594 ends that regulatory nightmare and grants universal recognition for occupational licenses that are “substantially similar” to New Hampshire licenses. 

The adoption of HB 594 makes New Hampshire the only state in New England with broad universal license recognition. (Vermont recognizes out-of-state licenses for some but not all occupations). 

Research on licensing recognition suggests that this should produce a noticeable increase in in-migration by licensed professionals who live in other states.

A study published in May by the Archbridge Institute found that universal license recognition produces an almost full percentage-point increase in employment in covered occupations and a 50% increase in immigration into recognition states among people who hold licenses that aren’t easily portable because the regulations vary a lot from state to state.

HB 594 allows the state Office of Professional Licensure (OPLC) to issue professional licenses to out-of-state applicants who hold a license in another state, provided that the other state’s licensing requirements are “substantially similar” to New Hampshire’s.

The “substantially similar” language is not ideal, as it often serves as a pretext for state licensing boards to reject license applications from out-of-state competitors. But HB 594 and a companion bill, House Bill 655, shift more authority from individual boards to the OPLC, which is expected to limit those anti-competitive board interventions.

HB 594 streamlines what was otherwise a tedious regulatory process for out-of-state professionals looking to work in New Hampshire. Not only did license holders have to obtain a separate New Hampshire license, but they often had to wait weeks or even months for their industry’s particular regulatory board to meet, consider their application, and vote on it. 

Now, anyone with an active license in good standing from another jurisdiction can apply directly to the OPLC and obtain permission to work in New Hampshire almost immediately. 

Once limited to only a few fields, such as medicine and hair care, occupational licensing “affects nearly 1 in 5 American workers,” research by the Institute for Justice shows.

By establishing a procedure to recognize most out-of-state licenses automatically, New Hampshire becomes a more attractive option for skilled individuals seeking to bring their talents to a new state. 

For fields in New Hampshire with critical labor shortages, such as nursing, the change could provide a desperately needed supply of new workers.

The greatest beneficiaries of universal licensure might be New Hampshire’s small businesses. Among the many trades affected by licensing in the state are tattoo artists, massage therapists, architects, barbers and cosmetologists, chiropractors, foresters, psychologists and other mental health professionals, real estate agents, occupational and physical therapists, and electricians.

An increase in skilled labor will benefit consumers too. Occupational licensing has been shown in academic studies to limit the supply of service providers and increase costs. Universal recognition won’t necessarily lower costs across the board, but it could stabilize prices in fields with serious labor shortages. And by attracting more providers to the state, it can reduce wait times and increase access to services.

The governor’s approval of the two bills was immediately noticed by policy leaders in other New England states that don’t have universal license recognition. Responding to the news, the Maine Policy Institute tweeted, “File this in the big folder of things that NH does far better than Maine.”

Massachusetts, which ranks fifth in the country for residents leaving the state, according to USPS change-of-address data from Forbes, might want to keep a particularly close eye on the number of licensed professionals who disappear from state registries in the next few years.

Nationally, New Hampshire joins only 14 other states (Arizona, Arkansas, Colorado, Idaho, Iowa, Kansas, Mississippi, Missouri, Montana, Ohio, Pennsylvania, Utah, Virginia, and Wyoming) with broad universal recognition laws, according to recent studies by the Archbridge Institute and Goldwater Institute.

Four of those states (Colorado, Montana, Pennsylvania, and Wyoming) require out-of-state licenses to be “substantially similar” to their own, like New Hampshire. But unlike five of those states (Arizona, Arkansas, Iowa, Kansas, and Mississippi), New Hampshire doesn’t require residency to receive a license to practice. This means that barbers or nurses in Massachusetts could quickly be licensed to work in New Hampshire without having to move over the border (where housing is extremely hard to find).

The companion bill, HB 655, consolidates and simplifies licensure authority within the OPLC, moving its authority to a separate location in state law and authorizing the OPLC to act with more speed and independence than in the past.

Taken together, these bills, now law, promote greater efficiency in state licensing and reduce bureaucratic barriers that never should have been erected in the first place.