Industrial Exemption for Engineers... Fact or Fiction?

[JoeTank]

I am fairly new to this forum and have been overly impressed with the depth of passion expressed by many whenever the topic of licensing of engineers surfaces. The threads seem to never end and the topics wander all over the place. Ain't it great!

I noted with interest the phrase "industry exemption" and the fact that it was tossed around like it was a well known fact or law or policy or whatever. Well, it's not well known to me. Although I fully understand the meaning of the phrase, I would like to comment and ask a question on two fronts about the PE/PEng laws and regulations.

ISSUE #1...
COMMENT: I am a licensed PE in a flock of states and read with great interest all of the PE Board newsletters. I am especially drawn to reports on cases in which the Board takes legal action against unlicensed individuals. In all cases I am fairly confident that I have never seen any actions against an individual that had the term "engineer" on a business card, unless that person was offering (or appearing to offer) engineering services to the public. I do not recall ever reading the phrase "industrial exemption" or similar on the laws regulating the practice of engineering in any of the states in which I am licensed. I'm no lawyer, but I do recall what our house counsel told me many years ago about this issue. I worked for a steel plate fabrication firm at the time. She said that industrial firms do not practice engineering. Engineering is an adjunct to the manufacturing process. Sounded good at the time.
QUESTION: Are there any states in the Union that actually use the phrase "industrial exemption"? I don't think so, but would like to hear from the gang on this one.

ISSUE #2...
COMMENT: I have never investigated becoming licensed in Canada, so I am totally ignorant about the laws governing a PEng. Based on all of the threads about the licensing issue, I think I have picked up on the fact that one cannot even use the title of "engineer" on a business card unless you are a PEng. However, there is a specific legal exemption for engineers that are working in industry. In other words, the "industrial exemption" is actually written into the law. I believe that this was cited as a law in Ontario by one of the forum members.
QUESTION #2: Is there an "industrial exemption" written into the Federal or Provincial laws of Canada?

LAST COMMENT... I seems like the PE/PEng laws may be very similar. In the US, only engineers offering services to the public are regulated. There is no need for a specific mention of an industrial exemption as these positions are not regulated by the law. Further, I am understanding from the comments on this forum that in Canada all engineers are regulated, but that the guys in industry receive and exemption. Sounds like it ends up at the same point.

Wow, this ended up a whole lot longer than intended. I'm really just trying to obtain an understanding of the differences, if any, between the PE and PEng laws.

Thanks.


Steve Braune
Tank Industry Consultants

http://www.tankindustry.com

 

[JAE]

Steve,
I am licensed in about 21 states and I do not recall the direct phrase "industry exemption" but I do believe that if you look into a number of your state's license regulations you may see commentary/laws about the difference between offering services to the public and working within an industry setting where you are not required to seal any documents - for a building permit per se.

Canada - I would see if you could seek out a regular member of Eng-Tips called dik. He is an engineer in Canada and could probably give you the info you need here.

 

[IRstuff]

This is from the California Professional Engineers Act:

6747. Exemption for industries
(a) This chapter, except for those provisions that apply to civil engineers and civil
engineering, shall not apply to the performance of engineering work by a manufacturing, mining,
public utility, research and development, or other industrial corporation, or by employees of that
corporation, provided that work is in connection with, or incidental to, the products, systems, or
services of that corporation or its affiliates.
(b) For purposes of this section, “employees” also includes consultants, temporary
employees, contract employees, and those persons hired pursuant to third-party contracts.

TTFN

 

[CanEngJohn]

From the Professional Engineers Act as legislated by the Government of Ontario .. (where I am licensed)

Licensing requirement

12. (1) No person shall engage in the practice of professional engineering or hold himself, herself or itself out as engaging in the practice of professional engineering unless the person is the holder of a licence, a temporary licence, a provisional licence or a limited licence. R.S.O. 1990, c. P.28, s. 12 (1); 2001, c. 9, Sched. B, s. 11 (16).

Certificate of authorization

(2) No person shall offer to the public or engage in the business of providing to the public services that are within the practice of professional engineering except under and in accordance with a certificate of authorization. R.S.O. 1990, c. P.28, s. 12 (2).

Exceptions

(3) Subsections (1) and (2) do not apply to prevent a person,

(a) from doing an act that is within the practice of professional engineering in relation to machinery or equipment, other than equipment of a structural nature, for use in the facilities of the person's employer in the production of products by the person's employer;

(b) from doing an act that is within the practice of professional engineering where a professional engineer assumes responsibility for the services within the practice of professional engineering to which the act is related;

(c) from designing or providing tools and dies;

(d) from doing an act that is within the practice of professional engineering but that is exempt from the application of this Act when performed or provided by a member of a class of persons prescribed by the regulations for the purpose of the exemption, if the person is a member of the class;

(e) from doing an act that is exempt by the regulations from the application of this Act;

(f) from using the title "engineer" or an abbreviation of that title in a manner that is authorized or required by an Act or regulation. R.S.O. 1990, c. P.28, s. 12 (3); 2001, c. 9, Sched. B, s. 11 (17).

Items 3a & c are the "industrial exemption" usually explained as the responsibility to the public is held by the corporation and that the services the Engineer is offerring is not to the public but to the corporation. Hence the Engineer does not need to be licensed since he has no direct liability.

Now this changes slightly if you are dealing with Health and Safety Signoffs on equipment (known as section 7s) which are given to OHSA the government regulatory body.

 

[IRstuff]

Seems that California's exemption is broader than Canada's by quite a bit.

TTFN

 

[CanEngJohn]

It would be curious how they would actually compare in practise. There are other exemptions listed past that one but it is a ton of room to post.

Also this is for Ontario. In Canada the acts are provincially regulated similar to how the US lets the individual states control their requirements.

In Ontario there is a series of legal documents which cover Professional Engineering including Ethics and Professional Misconduct. If anyone is interested you can go to

http://www.peo.on.ca

and look under publications and hit Professional Engineers Act for the series of publications.

 

[EddyC]

The types of activities that are covered under the "Industrial Exemption" can become grey sometimes. There are companies that manufacture shelters (essentially small prefabricated buildings) for telecommunication facilities. Even though they are products that are manufactured in quantity, they are required to be PE stamped.

Also, I have a friend that worked for a major manufacturer of military electronics. Under certain circumstances, his employer had to provide PE stamped drawings of their products, even though the products were manufactured items.

In addition, I worked under the "Industrial Exemption" category for 10+ years. I only became aware of its existence after I became a PE and became familiar with the state laws. Most MEs, EEs and ChemEs will spend their entire careers working in the "Industrial Exemption" category and will not even know it.

 

[stevenal]

Just for comparison, from Oregon:

(6) The performance of engineering work by a person, firm or corporation, or by full-time employees thereof, provided:
(a) The work is in connection with or incidental to the operations of the persons, firms or corporations; and
(b) The engineering work is not offered directly to the public.

Here the exemption doesn't even cover part time employees.

 

[JoeTank]

EddyC,
Regarding the PE stamping of manufacturing drawings, I suspect that was customer requirement. When I went to work in 1974 it was just starting to become a common practice for the owners or the owner's consultant to ask for all drawings and calcs to be signed and sealed by a PE. I worked for a company that designed, fabricated and erected water storage tanks for municipal clients. It was a real pain for my company because very few engineers were PEs. This drove the need for a PE license among the engineering staff. By 1980 there were lots of us on board.

The moral of the story is that the "industrial exemption" did not matter, the client's requirement did. The clients needs became a driver toward encouraging otherwise exempt engineers to become PEs.

Even before this trend toward in-house PEs in industry, most of the sales staff were already PEs! Since their "clients" were typically municipal consulting firms, the PE on their business card gave them more credibility. They were purceived as a cut above the other vendors / peddlers.

Steve Braune
Tank Industry Consultants

http://www.tankindustry.com

 

[jetmaker]

CanEngJohn,

Being a PE myself, my understanding of the code is that unlicensed engineers/industrial exempt can be used in any industry in Canada as long as the firm/corporation holds a Certificate of Authorization (C of A).

What I am not sure of is the following: does the corporation sign off the drawings and hence accept liability for any consequences? Or is a senior licensed engineer still required to sign off the work?

Also, an example of industry exempt is in the aircraft industry. Drawings/analysis does not need to be stamped, as the regulations are governed by another body, and the corporation assumes all liability.

Regards,

jetmaker

 

[PBroad]

Obviously there are several specifics that vary according to users and in Ontario the Association has downloaded its member services to OSPE an Advocacy Society so that it can focus on enforcement and discipline. CanEngJohn has detailed the specifics, however the question about a Corporation signing off on documents is void. Only a licensed engineer may sign and stamp a document. However, if a company wishes to use an unsigned drawing it does so at its own risk and under penalty of prosecution. ($10,000 fine and $25,000 for subsequent offences)

The problem in Canada is not so much the exception, which only allows mechanics to make parts for internal use without an engineer's stamp: anything leaving the plant be it a new automobile, lawn shears etc requires an engineers stamp on the design drawing. The problem is what "is the public"? More and more demand legislation Pre-start health and safety etc are demanding that co-workers and employees are also "public" which may have more effect on employers than the ire of the Association which has no intrusive powers and can only penalize through the courts after the fact as occurred on water treatment at Walkerton and other industrial accidents. Being self-regulating requires members to report infractions and many are reluctant whistle-blowers.

 

[jetmaker]

PBoard,

So a company with a C of A still needs an engineer to stamp the drawings? Can a licensed engineer offer their services directly to the public and stamp any works they performed without holding a C of A themselves? If yes, then what is the point of a C of A?

Not all products need to be stamped by an engineer. I worked in the Canadian Aerospace industry for roughly 3 years, and NEVER saw a stamped drawing. Certain industries, like aerospace, are exempt as they are governed by countries... not individual state/provinces.

Looking forward to the replies,
jetmaker

 

[PBroad]

What use is the C of A (Certificate of Authority)? Good question, and one that is often debated. It applies only in the construction industry, though is worded as any service to the public and originated in the 1950's when a shortage of engineers caused some short cuts. Employees of Federal Government are an exception as they don't fall under provincial jurisdiction. Not sure how NASA handles the issue in the US but the ability of "managers" to overrule engineers suggests that things are similar. The CofA applies in theory even to sole practioner engineers but a review is underway as we speak, but is only for services, not products so some legal loopholes.

A bigger loophole is the jurisdiction on unintentional products that leave a work place, such as pollution. Which is one of the reasons several engineers want to regain authority so that better public protection can be installed by having all engineers licensed, even employee ones. The distinction then becomes one between ethical engineers and "technologists" who merely follow "rules". In Aero-space the standards are normally high as failure is costly but as we move towards manual space travel I think some of the "exceptions" will close, if engineers can become more vocal in demanding exclusions that doctors currently own. One doesn't go to three dentists to get a quote, or to ank the radiologist to remove a brain tumor!!!

 

[patdaly]

PBroad writes:
"anything leaving the plant be it a new automobile, lawn shears etc requires an engineers stamp on the design drawing."

Lordy, we have to save the public from those unsafe things, dont we.

This is the most obvious reason I can think of to leave the US Industrial Exemption firmly in place. Lord knows we have lost enough Industrial production to third world countries. A question does arise though, just where are the Lawn Shears in your local stores made? Were they signed off by a registered P.E. in China?
Sorry to be so ornery, but there arises a time in everyones life where the absurd becomes intolerable.

 

[GregLocock]

I don't believe that an automobile manufactured in Canada would be 'signed off' by a PE.

But I am willing to hear different.

If so, I'd be very interested to learn how much the PE who signs off on the crash performance is paid, and how much his personal liability insurance is.

I am quite sure the company I work for would love to assign the responsibility and liability for safety related performance to an individual.




Cheers

Greg Locock

 

[JoeTank]

"I am quite sure the company I work for would love to assign the responsibility and liability for safety related performance to an individual." Even if done, I doubt this would solve their desire. The individual's pockets aren't deep enough. So, the firm ends up the juicy target anyway.

There is also a school of thought about personal liability insurance for an exempt PE working for an industrial firm. If one has insurance, one becomes a target for some offended/hurt person.



Steve Braune
Tank Industry Consultants

http://www.tankindustry.com

 

[DonMcC]

From Connecticut General Statutes, industrial exemption is explicitly stated:

Sec. 20-309. Exemptions. The following persons shall be exempt from the provisions of this chapter: (1) An employee or a subordinate of a person holding a license under this chapter, provided the work of such employee shall be under the responsible supervision of a person so licensed; (2) any corporation whose operations are under the jurisdiction of the Department of Public Utility Control and the officers and employees of any such corporation or any contracting corporation affiliated with any such corporation; (3) any manufacturing or scientific research and development corporation and the officers and employees of any such corporation while engaged in the performance of their employment by such corporation, provided the engineering work performed by such corporation, officers and employees shall be incidental to the research and development or manufacturing activities of such corporation; (4) officers and employees of the government of the United States while engaged within this state in the practice of the profession of engineering or land surveying for said government; and (5) architects licensed under chapter 390, in the performance of work incidental to their profession.
(1949 Rev., S. 4628, 4631; 1951, 1953, S. 2314d; 1961, P.A. 568, S. 2; February, 1965, P.A. 547, S. 5; 1967, P.A. 762, S. 4; 1971, P.A. 772, S. 1; P.A. 75-486, S. 51, 69; P.A. 77-614, S. 162, 610; P.A. 80-482, S. 175, 348; P.A. 82-370, S. 13, 16; P.A. 98-3, S. 22.)
History: 1961 act eliminated exemptions for employees of nonresidents working in this state for short periods of time and employees of newly arrived applicants; 1965 act deleted such nonresidents and newly arrived applicants from purview of section; 1967 act amended Subdiv. (b) to exempt corporations under jurisdiction of public utilities commission and their agents, contractors, and professional consultants, manufacturing corporations and their agents and scientific research and development corporations and their officers, agents and employees; 1971 act rearranged and increased Subdivs., rephrased proviso in Subdiv. (a) to require that employee of certificate holder be under responsible supervision rather than that he not have responsible charge of design or supervision, deleted reference to agents, contractors and professional consultants in Subdiv. (b) and added reference to contracting corporations, deleted reference to agents in Subdiv. (c) and added proviso in Subdiv. (c); P.A. 75-486 replaced public utilities commission with public utilities control authority in Subdiv. (b); P.A. 77-614 replaced public utilities control authority with division of public utility control within the department of business regulation, effective January 1, 1979; P.A. 80-482 made division of public utility control an independent department and removed reference to abolished department of business regulation; P.A. 82-370 replaced references to registration with references to licensure; P.A. 98-3 made technical changes.

My notes:
1) Can an individual hired by the company for a contract period to perform engineering call themselves an engineer or is this also violation of the law?
2) Can't I just call myself a "designer" to the public and still perform the same functions as an engineer?
3) If that fails, can't I just form my own corporation for $300, and then use the "industrial exemption" clause to present myself to the public as an engineer?
4) Can't I just call myself an engineer? After all, who really cares? I know I could get away with it for quite sometime in Connecticut because there is no system for reporting violations. If everyone does it, it must be OK.

 

[JoeTank]

DonMcC,
I don't think there is any law broken when referring to one's self as an engineer... either by introduction, business card, loan application or bumper sticker. Offering to provide engineering services to the public and not being properly licensed is where the violation starts.

Steve Braune
Tank Industry Consultants

http://www.tankindustry.com

 

[IRstuff]

California's PE Act is pretty clear:

6734.1. Practice of electrical engineering
Any person practices electrical engineering when he professes to be an electrical engineer or is in responsible charge of electrical engineering work.


So, calling yourself an engineer violates the act, unless you're either licensed or exempt.

TTFN

 

[JoeTank]

IRstuff,
Thanks for the specifics about CA. I am licensed in CA, but am guilty of not reading all the rules closely.
Notwithstanding what the CA law says, I do not recall seeing anyone prosecuted for calling themselves an engineer, except in the context of offering services or actually performing work on public works. There are many unlicensed engineers with the word "engineer" on their business cards that are not prosecuted. I have been a PE since 1978 and I am licensed in 16 states, so I see a lot of PE Board newsletters every year. Not once have I seen unlicensed engineer prosecuted unless the offer of services to the public was involved. I plan to go back and thumb thru the CA newsletters.

Steve Braune
Tank Industry Consultants

http://www.tankindustry.com