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# Industrial Exemption for Engineers... Fact or Fiction?

## Industrial Exemption for Engineers... Fact or Fiction?

(OP)
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...
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
www.tankindustry.com

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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.

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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.

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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

TTFN

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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.

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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.

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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.

### RE: Industrial Exemption for Engineers... Fact or Fiction?

(OP)
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
www.tankindustry.com

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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.

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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!!!

### RE: Industrial Exemption for Engineers... Fact or Fiction?

"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.

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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

### RE: Industrial Exemption for Engineers... Fact or Fiction?

(OP)
"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
www.tankindustry.com

### RE: Industrial Exemption for Engineers... Fact or Fiction?

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. ### RE: Industrial Exemption for Engineers... Fact or Fiction? (OP) 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 www.tankindustry.com ### RE: Industrial Exemption for Engineers... Fact or Fiction? 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 ### RE: Industrial Exemption for Engineers... Fact or Fiction? (OP) 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 www.tankindustry.com ### RE: Industrial Exemption for Engineers... Fact or Fiction? I think that the modus operandi is "no harm no foul." Unless the engineer in question has, as you indicated, offered public services or actually been involved in some harm to the public, most people are too ignorant of the law to worry about such things. TTFN ### RE: Industrial Exemption for Engineers... Fact or Fiction? In Ontario, people do get reprimanded for the use of the word "engineer" when they are not so license. It is most often in a letter to simple stop using the term, with the appropriate section of the code attached. Actions are then taken if the offender does not cease to use the word. ### RE: Industrial Exemption for Engineers... Fact or Fiction? There are many people who omit to put money in parking meters, but it is illegal too. The law of averages says you may not be caught the first time but don't expect your luck to continue. ### RE: Industrial Exemption for Engineers... Fact or Fiction? I seem to recall the Oregon Board going after a "domestic egineering" company (a maid service). I believe they backed down when it was pointed out that no one believed they were actually offering engineering services. While we're at it, can the guy who drives a fire engine or locomotive have "engineer" on his card? Was Scotty a PE? ### RE: Industrial Exemption for Engineers... Fact or Fiction? (OP) stevenal, There are other 'engineers" out there. Some state PE laws specifically recognize the longstanding practice of referring to some type of equipemnt operators as engineers. In light of Scotty's lineage, he may have been a Chartered Engineer. Steve Braune Tank Industry Consultants www.tankindustry.com ### RE: Industrial Exemption for Engineers... Fact or Fiction? (OP) Wasn't NAFTA supposed to have some provisions for PE and PEngs to do cross-border work. I have crossed into Canada a number of times, flashed my PE license, showed my client's letter of invitation and explained that I was there for a day or two to help a client thru some difficulties. Of course, I was asked to pay fee for that priviledge (about$120 Canadian).  I just assumed that this process was part of the NAFTA agreements

Steve Braune
Tank Industry Consultants
www.tankindustry.com

Yes, the cross border NAPTHA agreement works for professionals, including engineers. I recalled it being $100 US. That gives you a work permit to work for one company in one location (maybe two if you stretch it) for a year. As an engineer, you don't need a PE, just a degree. ### RE: Industrial Exemption for Engineers... Fact or Fiction? Hi all, Just a couple more comments from Ontario, 1. A company may only have a C of A if an engineer is on staff and takes credit for the work of that company. 2. There is also something called a "limited License" where people who have not earned a engineering degree, but have accumulated the needed experience to become a specialist in an area, may practice... of course there are terms and limitations to this... (see http://www.peo.on.ca) Interesting topic.. later. ### RE: Industrial Exemption for Engineers... Fact or Fiction? The "industrial exemption" is alive & well and getting stronger in the U.S., contrary to popular opinion. It basically means that when companies need engineering work done (for themselves) they do not need to hire licensed engineers to do it. The only exception to this (in most cases) is civil/structural engineering explaining why the originator of this thread was unfamiliar with it. California had tried to regulate mechanical & electrical engineering as strictly as civil engineering. Unfortunately, that old law was poorly worded and tried to do some absurd things like only mechanical engineers could do fluid mechanics. The law was changed basically removing any protections for licensed electrical & licensed mechanical engineers. The new California law now only protects the practice of civil engineering. ### RE: Industrial Exemption for Engineers... Fact or Fiction? rbcoulter raises an interesting point when he says: "The new California law now only protects the practice of civil engineering." Are the registration laws covering PE's for the protection of the engineering profession or the protection of the public? ### RE: Industrial Exemption for Engineers... Fact or Fiction? Engineering laws SHOULD only regulate engineering that affects public safety. To pick on California again, their law implies that only civil engineering needs to be regulated. Certainly, other disciplines of engineering can have a significant impact (negative or positive) on public safety. ### RE: Industrial Exemption for Engineers... Fact or Fiction? I'm confused by what you are saying. The California PE board website seems to imply something quite different: http://www.dca.ca.gov/pels/2004_pe_act.pdf, particularly: "6704. Defines who may use engineer titles In order to safeguard life, health, property, and public welfare, no person shall practice civil, electrical, or mechanical engineering unless appropriately registered or specifically exempted from registration under this chapter, and only persons registered under this chapter shall be entitled to take and use the titles “consulting engineer,” “professional engineer,” or “registered engineer,” ..." TTFN ### RE: Industrial Exemption for Engineers... Fact or Fiction? Read further down about exemptions: 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. ### RE: Industrial Exemption for Engineers... Fact or Fiction? In regards to my previous post, let's take for example contractor A & contractor B seeking contract engineering jobs in California. Let's assume contractor A is a degreed EE with a PE license in California, and that contractor B has a two year degree in electronics and no PE license. A company meeting the above exemption has no obligation to hire contractor A and can legally hire contractor B for any engineering work for that company even if that work is temporary. The same analogy goes for mechanical. ### RE: Industrial Exemption for Engineers... Fact or Fiction? Go to PDHcenter.com and review specific sections of course numbers R109 and R110 relating to industrial exemptions to gain a snapshot knowledge of this subject. Course content at this website can be viewed without cost. ### RE: Industrial Exemption for Engineers... Fact or Fiction? If you want to know whether you must be licensed as an engineer, you must read the laws of the state very carefully. They are available online from the various state licensing boards. In New Hampshire, for example, the "practice of engineering" applies only ".....wherein the public welfare, or the safeguarding of life, health or property is concerned." So, by definition, you aren't practicing engineering unless the public welfare, or the safeguarding of life, health or property is concerned. California's laws are somewhat confusing, but if you read their definitions, by "civil engineer" they mean " a professional engineer engaged in the field of civil engineering"... So when the law says that you need a license to practice civil engineering, it seems to say that you need a license to be a professional (licensed) engineer, and that is not a real issue, anyhow. They do prohibit you from calling yourself a "consulting", "professional", or "registered" engineer without a license. I am not an attorney (thank God) so read the laws for yourself, but remember that the state governments are all corporations and they all trick their citizens into relinquishing various common law rights in exchange for "privileges" that they grant to raise tax money. By the way, the federal government is no different, and the Internal Revenue Code applies only to taxpayers, and NOT to nontaxpayers. Very few people meet the legal definition of "taxpayer". ### RE: Industrial Exemption for Engineers... Fact or Fiction? The industrial exemption related to engineering within an organization not offered to general public has two aspects: 1 - As discussed in detail, engineers who do this work need not have a PE. 2 - For engineers doing this work who do have their PE, in Texas at least, they don't need to pay nearly as much for annual renewal. I think I pay something like$30 and non-exempt PE's have to pay \$230.

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