A century ago, individuals could perform engineering work without providing proof of competency. This, of course, put people at great risk. In order to protect public safety, health, and welfare, the first engineering licensure law was enacted in Wyoming in 1907. Today, states regulate the practice of engineering to ensure public safety by granting only Professional Engineers (PEs) the authority to sign and seal engineering plans and to offer their services to the public. The PE is responsible not only for their work but also for the work of those they oversee.
Some government and private industry engineering positions are staffed by Professional Engineers. But, for many companies, the task of staffing projects with Professional Engineers is not required due to the “industrial exemption.”
In an industrial exemption, a Professional Engineer is not required to oversee a project and provide their seal of approval. Instead, the company assumes liability for the project. These exemptions are intended to apply to companies with internal processes and safeguards in place that provide supervisory oversight to all engineering projects. These engineering projects are thus able to circumvent state professional licensing laws. Because the company is assuming responsibility for the projects, the seal of the Professional Engineer is not required.
Many states allow industrial exemptions with certain stipulations.
- The engineer must be an “employee of a public utility, state agency, or manufacturing company.”
- The engineering work must be incidental to the products or non-engineering services of the engineer’s employer.
- The engineer must not be offering services to the general public.
The Enigma of Engineerings Industrial Exemption to Licensure: The Exception that Swallowed a Profession, published by the Liberty University School of Law, posits that the industrial exemption arose in the 1940s when leaders of public utilities and industrial firms launched a counterattack against the rise of state licensing laws. Instead of seeking a repeal of the licensing laws, these entities sought exemption of industry employees. Instead of the engineer taking responsibility for the plans, the firm took responsibility for their engineer’s work and was liable for any negligence.1
There are those that support industrial exemption. The industrial exemption policies exclude industrial employers from requirements to hire only engineers who hold professional licensure in the states in which they are employed. Companies that operate in several states point to the lack of uniformity in licensing laws and regulations among the states. Thus, they argue that the requirement of multiple licenses becomes an unnecessary burden to the engineers and companies.
Manufacturing in the United States has taken a hit over the years. Those that argue for industrial exemption assert that it would be a hindrance to create additional obstacles to job creation and mobility. They also assert that, especially within the manufacturing industry, it brings down industry competitiveness within the global marketplace. And, that properly insured entities have a vested interest in protecting the safety and welfare of their employees, facilities and the general public. Because, they argue, companies that receive exemption have certified that they have in place procedures and safeguards to comply with the laws. Some companies also emphasize that they offer additional in-house training.
Joseph Cramer, the past Director and former Head of Technical Programming for the American Industry of Chemical Engineers, argues that chemical engineers tend to be very mobile geographically and across industrial sections. In a 2014 press release, he noted, “While it might seem like a simple solution to just require all engineers to obtain and maintain a P.E. license in order to practice engineering, the current situation is very fractured with more than 50 licensing boards across the U.S., each with a different set of licensing rules and regulations that establish who can practice engineering and where.”2
Those that argue against industrial exemptions stress that the purpose of licensing engineers is to protect the public. The Professional Engineer should possess the education and experience to take personal responsibility over the design and safety of the project. Thus, providing a loophole that eliminates the requirement of a Professional Engineer overseeing the project leads to increased risk to the public. Exemptions place individuals and organizations performing engineering services outside of the licensing system and projects carried out are not subject to the same legal and ethical requirements.
If a Professional Engineer were in place, the risk to their reputation and career would insist that they pay very close attention to the details of the project. Industries where a Professional Engineer is extremely important involve those projects that directly and drastically impact the public and the environment, including deep-water oil and gas drilling, nuclear power generation, pharmaceuticals and bioengineered food. In the May 2011 issue of Professional Engineering Magazine, Executive Director of the National Society of Professional Engineers, Larry Johnson, stated: “If PEs were required by state and federal government to sign and seal documents, I submit they’d be much more careful about approving designs, much more protective of the public, and much less likely to be pressured by the economic needs of their employers.”3
The National Society of Professional Engineers has been vocal about the application of industrial applications. The entity is adamant about their policy, stating, “all engineers who are in responsible charge of the practice of engineering as defined in the NCEES Model Law and Rules in a manner that potentially impacts the public health, safety, and welfare should be required by all state statutes to be licensed professional engineers. NSPE recommends the phasing out of existing industrial exemptions in state licensing laws.”4 The NSPE has worked with a number of organizations to insist that projects are staffed by Professional Engineers. In response, the EPA issued two rules that require a PE: a PE must be the final rule on emissions related to municipal solid waste landfills, as well as the insistence that a PE be involved with all oil and gas sector projects. The NSPE also worked with the House of Natural Resources Committee to require a provision that insists a PE prepares and seals documents related to cleanup of abandoned mines.
The debate continues about industrial exemptions. With powerful organizations on both sides, it remains unclear about what the future holds for industrial exemptions.
1Spinden, Paul M., “The Enigma of Engineering’s Industrial Exemption to Licensure: The Exception that Swallowed A Profession” (2015). Faculty Publications and Presentations. Paper 72. http://digitalcommons.liberty.edu/lusol_fac_pubs/72
2AICHE Affirms Strong Support. https://www.aiche.org/about/press/releases/05-07-2014/aiche-affirms-strong-support-both-licensure-and-industrial-exemption
3Industrial Exemption or Exclusion? https://www.nspe.org/resources/pe-magazine/may-2011/industrial-exemption-or-exclusion
4NSPE Makes Progress Campaign Against Exemption https://www.nspe.org/resources/blogs/nspe-blog/nspe-makes-progress-campaign-against-exemptions
Do you have any comments on this interesting subject? Add them in the comments section below.
Industry is where the jobs are in mechanical engineering. I obtained a PE license early in my career and have maintained it for over 40 years. I have needed to sign and seal plans about 4 times total. Most of my work has not required it, and I have been responsible for multi-million dollar projects. Web processing and material handling equipment can be safely designed without licensure.
we all know why the exemption came about. private enterprise was being defensive against the concept of “public knowledge” both from a competitive and liability perspective.
in my opinion, exemption should not trump public safety. for example. if non PEs are designing or maintaining something upon which the general public depends or which could affect the general public in some negative way if it goes awry. then the burden of that public safety requirement should apply. how far we take that interpretation is another matter.
1. If the industrial exemption is discontinued, responsibility for licensing must be removed from the individual states and placed under federal jurisdiction, as almost all companies now are multistate in sales if not operations.
2. Most “engineering” within most companies is for internal projects, little of it affects services to the public.
3. I do take issue with employees of governments automatically being granted P.E. status, as happens in NY, where I reside. Only individuals with demonstrated education and experience should be P.E.s no matter whom their employer.
The problem is that some of these exemptions cover employees that don’t even have a the minimum BS in engineering. This has always bothered me because I have had to fix problems for some of these projects.
I think the licensing should be more uniform. I am registered in 18 states and the costs are very high. A company in several states that works in several states should have to pay for the license. Having consulted to firms like this, as a PE, most of them will not pay for all those fees.
The NCEES holds me to a high standard, making sure I am getting my required PDH credits. That is also an expensive proposition. The cheap classes are too shallow, in my opinion, and sometimes the expensive classes aren’t much better. For license fees and classes I have spent almost $1,200 at this point in 2024. That will most likely double by December, 2024.
I have a small consulting business and that adds to my expenses.
That said, the industrial exemption is fine with me until the states, NSPA and NCEES can develop an accepted method.
I may be cynical but this question sounds like a “solution” in search of an actual problem. The reasons for a person or persons asking this can usually be traced to money, and their making lots of it off the backs of engineers and their companies to “help” “ensure” “public safety” if they get their preferred solution set into law.
I believe part of the issue is risk and reward. PE’s working for consulting firms don’t bear financial responsibility for their work – their firms do, and the principals get rewarded handsomely for it. Engineers working for industry are salaried and can hardly be expected to take financial responsibility for multi-million dollar projects for mere salary, unless their employment contracts were to exclude it. That said I agree with past comments that licensing attains and maintains a higher degree of competency.
I have been licensed since 92.
Estimates are that only 10 to 20% of engineering graduates become PEs.
It is not easy to obtain and retain your license . There are many reasons that most graduates don’t become licensed. Some graduates simply cannot pass the tests, others don’t see the value in licensure, and do not invest the time required to assemble all the documents required. Unless we significantly lower the bar there will not be sufficient PEs to fill all the engineering positions in America
However, even though most engineering graduates are unlicensed, I don’t see the case for universal requirements for a PE stamp. How many deaths are caused each year by unlicensed engineers that would have been prevented if we had required a professional engineer in that position?
The failures that come to mind (the KC Skywalk, the Miami Bridge. etc.) all had PE stamps on the documents. The current mess at Boeing is not due to their engineers not having a license. We have plenty of problems to sort out before we create more with an unjustified requirement for licensure.