South Dakota Gov. Kristi Noem signed Senate Bill 57 into law on Feb. 7, reducing unnecessary employment barriers for people with criminal records.
Research indicates that access to gainful employment is a key factor in reintegrating former criminal offenders into society and reducing the risk of re-incarceration. Yet laws and regulations in many states can make it difficult for people with criminal records to find work. Rolling back these government-imposed barriers to employment should be considered low-hanging fruit in the effort to promote employment among returning citizens. One such barrier, occupational licensing, is particularly ripe for policy reform and South Dakota has seized the opportunity.
An occupational license is essentially a government-issued stamp of approval to enter into certain regulated occupations. One in five workers in South Dakota is required to hold an occupational license to do their jobs. South Dakota issues more than 130 licenses, including licenses for many entrepreneurial occupations, like barber, cosmetologist, athletic trainer, and various construction contractor roles.
To obtain an occupational license, workers are typically required to complete training and education requirements, pay fees, and submit an application for consideration by an appointed board. Before the reforms included in Senate Bill 57, South Dakota statutes also granted licensing boards broad discretion to deny occupational licenses based on an applicant’s criminal history––even including arrests that did not result in a conviction. South Dakota was one of only five states to receive an “F” grade in the Institute for Justice’s “Barred from Working” report on licensing.
There is some research evidence that occupational licensing restrictions may lead to higher rates of property crime and reoffending by closing off work opportunities for former offenders.
Gov. Noem highlighted the need for occupational licensing reform in her 2024 State of the State address:
“Once individuals are out of custody and back into society, we want them to have the opportunity to build a career so that they can provide for themselves and their families…We need more plumbers, more electricians, more welders, and an unrelated criminal past shouldn’t stop qualified applicants from filling these roles.”
Senate BIll 57 makes several important improvements to South Dakota’s occupational licensing laws. Under the new law, licensing boards can no longer deny an occupational license unless an applicant has a prior conviction that is directly related to the duties and responsibilities of the occupation. Boards are explicitly prohibited from considering conviction records that have been sealed, expunged, or pardoned.
Now if a board intends to deny licensure based on an applicant’s criminal history, they must provide the applicant with a written notice of their intent to deny. The applicant then has the right to a hearing to present evidence of their rehabilitation. If a licensing board makes a final decision to deny licensure, the applicant has a right to request a judicial review of the decision.
Finally, SB 57 creates a petition process that enables prospective applicants to receive a determination as to whether their criminal conviction record would disqualify them from obtaining a license. This process provides clarity for prospective applicants before they expend the time, money, and effort to receive any education and training required for licensure.
South Dakota Sen. Liz Larson (D-Sioux Falls), one of the bill’s sponsors, talked to Reason Foundation about the bill’s importance.
“South Dakota has a need to strengthen support for persons with criminal history as they complete their sentences and transition back into the community. Availability of skilled work opportunities provides hope and is critical in reducing recidivism,” Larson said. “This is a bipartisan issue. Government should be looking for these pain points or bottlenecks in our communities and providing practical, low-cost, and sustainable solutions. That is exactly what the Department of Labor and the governor have done with SB 57 in this case.”
Failure to effectively reintegrate returning citizens into society contributes to mass incarceration and is a waste of taxpayer resources. In 2023, the average daily cost of incarcerating an adult prisoner in South Dakota was $82.14. The new law is a major step in the right direction in reducing barriers to employment for individuals with criminal records.