California enacts modest occupational licensing reform
On September 30, 2018, California Governor Jerry Brown signed into law AB 2138, making California the twelfth state this year to enact occupational licensing reform. This flurry of legislation will make it easier for people with a criminal record to obtain occupational and professional licenses. (As discussed in recent posts, the Institute for Justice’s model occupational licensing act and the National Employment Law Project’s model state law have influenced this legislative trend.) However, California’s take on licensing reform is relatively tepid compared to more extensive reforms in states like Indiana, Kansas, New Hampshire, Tennessee, and Wisconsin.
In California, nearly 30 percent of jobs require licensure, certification, or clearance. When AB 2138 takes effect in 2020, it will prohibit licensing boards from denying a license based on certain acts not resulting in conviction, or certain less serious convictions after seven years. The law will require boards to consider rehabilitation evidence for any conviction (not just misdemeanors, as under existing law), to establish more detailed criteria for evaluating convictions, and to issue annual reports.
While a more robust version of the bill first passed the California Assembly, it was weakened in the California State Senate, and ultimately, the Senate’s version prevailed. The legislative process and bill’s provisions are discussed in more detail below.
Legislative Process: AB 2138’s purpose is to reduce recidivism and provide economic opportunity for all California residents. A more robust version of AB 2138, passed in the California Assembly, had a number of provisions that would have made it easier for people with a criminal conviction to get licensed and back into the workforce, and would have gone into effect immediately. However, the Senate rolled back a number of key provisions, resulting in a watered-down bill, which preserves more barriers to licensing, and delays the bill’s implementation until July 2020.
First, the Assembly version would have only permitted denial, suspension, or revocation of a license for a crime “directly and adversely related” to the qualifications or duties of the occupation. However, the final bill only requires the conviction to be “substantially related” to qualifications or duties, reverting to the existing standard in California law, under which more applicants are likely to be disqualified. See Cal. Bus. & Prof. Code. § 480(a)(1). Second, the original Assembly version would have only permitted boards to deny, suspend, or revoke a license based on a conviction from the previous five years, with the exception of violent felonies. The Senate, opting for a longer period in which most convictions can be grounds for denial, expanded the time limit from five to seven years. The Senate version also excludes from any limit a broader class of convictions: serious felonies as defined by California Penal Code section 1192.7, convictions requiring sex offender registration under California Penal Code sections 290(d)(2) or (d)(3), and financial crimes “directly and adversely” related to certain occupations. The Senate version also does not impose any time limits for considering convictions for the purposes of suspending or revoking licenses.
Grounds for Denial: While the final version of AB 2138 is not as robust as the earlier Assembly version or those of other reform states, it will narrow the grounds on which a board may deny a license based on a criminal record to only include a conviction or formal professional discipline. The bill will remove from boards the broad discretion they currently possess to deny a license based on “any act involving dishonesty, fraud, or deceit” for self-benefit or harm to others. The new law will prohibit a denial based on an arrest that resulted in a disposition other than a conviction—including an infraction, citation, or juvenile adjudication—and it will only permit a denial based on a criminal conviction or professional discipline. (Unlike alleged conduct or an arrest, a conviction or formal professional discipline is generally subject to procedural protections and due process.)
The language in the bill regarding grounds for denial based on a prior conviction provides that a board may deny a license only if:
The applicant has been convicted of a crime within the preceding seven years from the date of application that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, regardless of whether the applicant was incarcerated for that crime, or the applicant has been convicted of a crime that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made and for which the applicant is presently incarcerated or for which the applicant was released from incarceration within the preceding seven years from the date of application.
However, no time limitation will apply to a denial based on: a “serious felony” as defined by California Penal Code section 1192.7, a crime requiring sex offender registration under California Penal Code sections 290(d)(2) or (d)(3), or, for certain licenses, a financial crime that is currently a felony and is “directly and adversely related” to the fiduciary qualifications, functions, or duties of the occupation.
Next, a board will be able to deny a license based on professional discipline, but only if the applicant “has been subjected to formal discipline by a licensing board in or outside California within the preceding seven years from the date of application based on professional misconduct that would have been cause for discipline before the board for which the present application is made and that is substantially related to the qualifications, functions, or duties of the business or profession for which the present application is made . . . .”
In addition, under AB 2138, a person may not be denied a license because of a conviction if that person was granted clemency or a pardon, made a showing of rehabilitation for a felony conviction (misdemeanors are already covered under existing law), or had the conviction dismissed or set aside under California Penal Code section 1203.42. Finally, a board may deny a license on the basis that an applicant knowingly made a false statement of fact required to be revealed in the application, but not based solely on an applicant’s failure to disclose a fact that would not have been cause for denial of the license had it been disclosed.
Under the bill, each board must develop more specific criteria—and publish a summary online—for how it determines whether a crime is substantially related to the qualifications, functions, or duties of an occupation in deciding whether to deny, revoke, or suspend a license. Such criteria must include: (1) the nature and gravity of the offense; (2) the number of years elapsed since the offense occurred; (3) the nature and duties of the profession; and (4) any evidence of rehabilitation submitted by an applicant. If a board denies a license in part or whole based on a conviction history, it must notify the applicant in writing of the applicant’s right to appeal, any procedure by which the decision can be challenged, and how to request a complete conviction history.
Preliminary Determination: Most of the other states that have enacted licensing reforms in 2018 include a provision for a preliminary determination, a key feature of the Institute for Justice’s model licensing laws, including the Collateral Consequences in Occupational Licensing Act. Such a provision allows individuals to seek a preliminary determination of whether their criminal record will be disqualifying before investing time and money in the licensing process, and to be advised what remedial action they may take. However, a preliminary determination process is conspicuously absent from California’s bill.
Another proposed California bill, AB 2409, would have specifically permitted such a preliminary determination, providing that a person could petition a licensing board “at any time” for a determination of whether their criminal record would be disqualifying. And a criminal record would only be disqualifying if the person had a conviction for a felony or violent misdemeanor and if the board determined—by clear and convincing evidence—that the offense of conviction was substantially related to the state’s interest in protecting public safety, that having the license would put the person in a position of being more likely to reoffend, and that the person reoffending would cause greater harm than the denial of the license. AB 2409 also would have allowed individuals to petition licensing boards to review and rescind their regulations. In April 2018, AB 2409 failed in an Assembly committee along a party-line vote, with Democrats in opposition, a result that a Reason.com writer attributed to the influence of special interests who benefit from maintaining high barriers to employment.
Reporting: AB 2138 includes an annual reporting requirement, which could provide data to support future reforms. But because the law goes into effect in 2020, the data will not be available until 2021 at the earliest. Each board will be required to make an annual report publicly available that details the number of applications received for each license, the number of applicants requiring inquiries into criminal history, as well as the final disposition and voluntarily submitted demographic information of any applicant with a criminal record who: (1) received a denial or disqualification; (2) provided evidence of mitigation or rehabilitation; or (3) appealed a denial or disqualification.
Covered Boards: AB 2138 applies to occupational and professional licensing boards within California’s Department of Consumer Affairs, but the bill exempts from most of its provisions the State Athletic Commission, Bureau for Private Postsecondary Education, and Horse Racing Board.
Also of note, as reported by Nick Sibilla in USA Today, the California Department of Forestry and Fire Protection, under California legislation signed in June, may now certify former prison firefighters as “emergency medical responders,” which qualifies them for some state firefighter jobs in lieu of an EMT license.
Disclosure: I was a clinical student in 2017 at the East Bay Community Law Center, which was one of the writers of AB 2138, but I had no involvement in AB 2138.