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
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If a consultant designs a frame in an industrial plant she needs to be licensed; if an employee of the plant’s company designed the frame why would she not be held to the same requirement?
Of course the NSPE wants to phase out the industrial exemption. It allows the vast majority of engineers in industry to escape their grips and stay free range.
I did all sorts of engineering work in my industrial career, for products, processes, testing and anything else my employer needed and I could reasonably and competently perform. I never once stamped a drawing.
I think the requirement for PE continuing education is an unnecessary barrier for many, particularly as nearly any continuing education qualifies, even if not related to an engineer’s work area. The requirement seems more an aid to selling continuing education materials than to protect anything. Especially absurd is the requirement for two hours of ethics training every two years. If an engineer isn’t ethical, two hours of training won’t help.
In the last several decades, many professions raised their requirements: physician assistant, physical therapy, occupational therapy, pharmacy, etc. Friends and family in those professions said it just made the education process longer, more expensive and more difficult. None said it produced better-quality results for patients and clients. It was more about limiting the number of practitioners – lowering supply against a constant demand. In a word, protectionism.
I don’t think engineering should purse a similar path.
Toss it
My engineering department is staffed with 25 persons with Engineer in their title. Only about half actually have an Engineering degree and I am the only one with a PE license. My multiple state board (3) all have various requirements for continuous education. I have used this requirement to find seminars that are directly related to my current job requirements at company expense.
If all the engineers had to take similar course work it would be a significant increase to the company.
I personally believe that the the title of Engineer MUST be maintained by only those with engineering degrees.
I did work for a large industrial facility that offered public tours. As a consultant, I was required to be licensed even when working for them because they were outside of my engineering company. Thier engineers never had to be licensed PEs with one exception, where the public was allowed to go.
While they tried to maintain code compliance, many of them did not fully understand the code completely as they were never inspected.
When does and employee does not deserve the same level of safety as them being in the public?
I worked for most of my career for engineering and construction companies as a chemical engineer in the industrial sector. Only structural work typically required a PE stamp. I have worked the last 15+ years in the municipal sector where stamping of all documents is required. I have not seen any difference in the level of competence in the two sectors and the QA/QC procedures in the two sectors are identical. If you are not a sole practitioner the corporate entity is the entity that has legal liability and is the “deep pocket” and is ultimately incentivized to maintain the quality of the work. They are also incentivized to hire and retain competent work forces. The licensing requirement is a burden that provides very little benefit. This is a solution in search of a problem.
I worked in the federal government on military aviation projects. Less than 5% of the engineers who worked for me had PEs. I’ve had one for 40 years.
I suspect the majority could not obtain a PE at this stage on their careers (by exam), and would only qualify if grandfathered.
I have an ongoing issue with the government excluding themselves from the rules and laws they put in place, this completely defeats the purpose and half the time, the entity that needs the laws the most is the entity that is putting those laws in place. The arguments to keep the “Industrial Exemption” in place is the same argument that could be made by all entities, the cost and timeframe to do so is counterproductive to the economic benefits and world competitiveness and all entities have an invested interest to protect the public because a public outcry would be devastating to their business. This does not eliminate the need for checks and balances by having drawings stamped by engineers who are held to ethical not financial obligations. I would agree that when engineering processes, such as machinery, or systems, that seems reasonable. However, when we are talking about roadways on a mine site, or disposal of hazardous waste, or the office building that is built on private mining land, these should not be designed or engineered by the mining companies’ staff, they have various entities that can and will be effected if they are negligent, therefore, they must comply with all the same laws that the general public must follow. Some process should be made to allow an internal PE to be licensed to be responsible for all decisions that department makes at utility companies, basically a self-approval process where they are audited from time to time but not every project has to be submitted for a permit.
What are the requirements for other professions working within a corporate veil? If a corporation has in-house legal counsel are they required to have passed the Bar exam in their state? If a corporation has a medical doctor who gives employee physicals is that doctor required to be board certified in the state where he or she works? The same standard should apply to engineers, in view of the duty of engineers, like medical doctors, to hold public safety paramount.
I see no reason to change. I worked as a non-licensed engineer before sitting for the exam and worked side-by-side with non-licensed engineers for most of my 54 years (and counting). If a company wants to accept the liability, let them do so.
In my 35+ years of experience it has often been case that when the stuff hit the fan it was the old non-licensed, non-degreed engineer that saved everyone’s bacon because he had years of real world experience and common sense that a degree or license can not give. A degree and a license do not assure competence, they only assure others that the degree/license holder has jumped through the correct hoops.
I say keep it the way it is.
I agree Dave’s comment of regarding the NSPE.
As far as continuing education, it is a waste of precious time out of my life. The last time I checked neither the second law nor Newton’s law of cooling has changed.
I have yet to find any value in the “continuing education” required to keep my license. And speaking with many other engineers over the years, I have yet to find anyone who has. They are compelled to waste time and money to keep their license so that they can practice the profession that provides for them and their families.
There aren’t enough PE’s to handle all the work that is involved in Industrial Facilities. Just because you have a PE doesn’t mean you are qualified.
I worked as an engineer for 23 years before I was incentivized by my employer to get licensed. My work was not better after taking the test. In fact, the problems I had to work on the PE exam had little to do with real world problems I had encountered. In fact, I thought the application that I filled out to take the test was much more difficult than the test itself.
There’s also the problem of a manufacturing company that sells products all over the United States. Of course, we all take the same test. But, what if I design an electrical panel for a custom or modified standard product that ends up in Oregon? Do I need to be licensed in Oregon? If this exemption was dropped, we’d have to switch to a national license. I bet the states wouldn’t like missing out on all the licensing fees.
Also, there wasn’t a continuing education requirement when I was initially licensed. Now there is. Do I take courses that help me perform my job better? Usually not. I already know how to do my job. If I need a new skill to do something, I study up on it with vendor information and online data.
And the Ethics requirement is ridiculous. Some politician voted to have me take a course on ETHICS!!!! That’s laughable!! Do politicians take Ethics training with a test?? I absolutely don’t want anyone to be injured or killed because of something I did wrong, and that’s all the ethics I need to do my job.
My understanding is that the industrial exemption derives from the interstate commerce clause of the Constitution, so objects in interstate commerce, such as manufactured products, are limited as to the authority of state regulation, i.e. Tesla does not have to get a county permit to build a car. The federal government is not allowed to license most professions; that is left to the states, under the division of powers clause, except for certain professions inherently in federally regulated interstate commerce, like merchant mariners and aircraft pilots.
That means engineers fall into a bit of a crack unless they are offering services to the general public in that state or for systems not in interstate commerce, like buildings. Some states even allow consultants to firms to be exempt under “de minimus non curate lex”; the details of a contract between an individual and a firm is not significant to the law of product safety. So the industrial exemption is essentially required in some form. I have no idea if this is correct though. I am not a majority of justices on the Supreme Court, nor have I passed the bar in any state, so take my “understanding” for what it’s worth.
I am a P.E. in naval architecture, which is even more complicated, because ships and boats are inherently in interstate commerce, and federally regulated, so the states cannot regulate boats themselves at all, but the federal government can’t regulate engineers.
How much of a concern is this really in today’s world. During my 45 years as a licensed engineer, (almost entirely with one engineering /construction firm), the number of design contracts we won from industrial clients continually grew as industrial clients tightened their budgets by dropping their in-house engineering departments in favor of using outside firms. The few engineers that were left were tasked with managing the work contracted out to engineering firms with licensed PE’s. That was my experience.
Toss it. Use of the term “Engineer” by unlicensed, sometimes non-degreed corporate employees or contractors, even within a
private reservation is misleading and violates the intent of Board Rules and relevant statutes. Any entity utilizing the term “engineer” or Engineering” and/or offering “engineered products” or “engineering services” to the public must be able to show that such work or products were prepared by currently licensed professional engineers.
Keep it.
Industry has a keen interest in assuring product design is safe to use and to minimize liability exposure. While I am registered in two states I have worked for industry (manufacturing) for my entire professional life. My position and responsibilities are site specific and deal with plant engineering (building, grounds, lifting devices, bridge cranes, structural, ventilation, pump systems, etc) and process designs. I have never sealed any plans or drawings, nor do I need to carry liability or professional errors/omission insurance, standard expenses for an engineering firm.
The industrial exemption makes no sense with the 3rd stipulation. “The engineer must not be offering services to the general public.” Virtually every public utility, state agency, or manufacturing company provides services or products directly or indirectly to the general public. Why would producing a mass-produced product with a faulty design NOT require a PE but providing services to a separate company/entity always requires a PE? They both impact the health, safety, and welfare of the general public. It should be worded “The engineer must not be offering products or services to the general public.”
I am an electrical engineer and I’ve had the privilege of having to sign and seal bidding documents for installing small camera systems for park & ride lots, drawings for adding 2 pumps at an existing building, as well as full electrical systems for large hospitals and mission critical data centers and plants. I’ve worked with some amazing electrical designers (many people call them non-licensed engineers) but also many careless electrical designers that punched the clock in and out at the end of the day. Ultimately, there is something about the PE license and signing/sealing that makes one really ponder the design and ethics of the design that was created. Most electrical designers I have worked with say that they are glad that I’m checking/re-checking and taking the full responsibility for the design. I don’t think I am smarter than all electrical designers by any means but it is more about the responsibility aspect. In my experience having to ponder the seal and signature takes the perceived responsibility to a different level that is hard to explain to electrical designers. As a PE I also take the ethical obligation to avoid all appearances of a conflict of interest very seriously. Most electrical designers I’ve worked with have no qualms about going on a factory tour vacation by a manufacturer (funded by the vendor trying to sell product) or many other gifts that are greater than “token value.” I’m not saying they are unethical but there is just a different level of expectation required to be above reproach in these areas because of the PE license.
I take the signing and sealing very seriously by re-doing work that electrical designers that work for me may have done incorrectly. Most of the time it worked well on time, but many projects I was the last one at work to send the project design out. Staying at work all night or on federal holidays to make sure some design is correct or worthy of being signed. To be honest if there was no PE requirement and I worked under the industrial exemption, I don’t know if this same zeal would be there to protect the health and safety of the public as I have with it. I would hope so but examples over and over show otherwise.
Look at all of the CPSC and auto recalls that have been quite serious in their ramifications to the public at large. Seat belts, emissions, shock hazards, etc…. You can’t tell me that someone practicing engineering at some furnace manufacturer, car manufacturer, municipal electric utility, or smoke detection manufacturer have job that are less impactful on the public at large than some tiny parking lot camera system I designed. Their jobs are most likely more important than those small projects I worked on and they should require the same or higher standard of certification and should not be exempt.
Ultimately, the argument for the industrial exemption is that the public won’t purchase products shoddily made. If anything in the last 2 decades it has shown quite the opposite. People are more than happy to purchase tools made poorly by a no-name manufacturer or products on Amazon that are not UL listed. All of the engineering ethics courses show that there are plenty of unlicensed people that are willing to cut corners (and even some licensed engineers). I’m generally opposed to over-regulation but this is one area where the regulation of minimally requiring a PE license just makes sense.
Georgia has an interesting limit to their industrial exemption in section 43-15-29(c): This chapter shall not be construed as requiring registration or licensing for the purpose of practicing professional engineering, structural engineering, or land surveying by an individual, firm, or corporation on property owned or leased by such individual, firm, or corporation unless the same involves the public safety or public health or for the performance of engineering which relates solely to the design or fabrication of manufactured products.
There is clearly a risk to the public safety and health for many operations conducted on the premises of an industrial site. If the consequences of a flawed engineering design can cross the fence line, I don’t know why the engineer would not have to be registered in the state of Georgia.
The industrial exemption will always be with us. First of all, PE licenses do not explicitly cover all disciplines that now exist with advancing technology. Prime example – software engineering. A software engineering exam was developed – but not enough people took it to make it worthwhile to maintain. NSPE is now working with other technical organizations to develop a CET accreditation for PE’s who direct software projects. And software (I will include AI, AR, VR, firmware, etc. under that general title) runs more and more of our technology. And it develops so quickly, that ONLY continuous education and training and work experience will allow one to remain competent. Then we have individual state requirements. CA has a requirement for seismic in their PE licenses; FL has a requirement for hurricanes in their PE licenses. That limits transportability. Some states have SE requirements, others do not; it still falls under CE for them.
I have had a PE license for the last 45 years. It is an honor, a privilege, and a great responsibility associated with stamping and sealing documents that are prepared by me or under my direct oversight. I know that I am accountable for what is produced. The issue I have with “industrial exemption” is that is assumes that the full liability for errors will be borne by the employer. But, given the legal system and how it works in the real world, that is often not the case. “Industrial exemption” engineers get the ability to pass the buck to their bosses who have a very, very low chance of bearing the full consequences of their improper decisions.
And, to respond to those who comments can be interpreted as the NSPE Code of Ethics as being too much, being ethical means a lot more than just “nobody gets killed or injured.” It is about being honorable in everything that you do, regardless of the consequences. It is a very high standard not achieved perfectly by practicing PE’s. But they can be held accountable – loss of license to practice – if they violate it.