States no longer have to use their own civil servants to run the public job service, and the Labor Department says it cannot put a number on what that saves

The rule is gone.

For most of the past ninety years, states that ran the federal public employment service had to staff it with their own merit-system civil servants. The Labor Department has now removed that requirement in a final rule, and states may use whatever staffing model they judge most efficient, including contracting the work out or keeping merit staff exactly as they are.

This is the third turn of the same screw. A 2020 rule allowed the flexibility. A 2023 rule took it away. This one restores it.

What the record shows

The Department received 456 comments during a 60-day period that closed on September 2, 2025. It identified eight separate form letter campaigns, and says the majority of what arrived, 303 submissions, came from them. State employee unions, workforce boards, individual civil servants and at least one member of Congress are all recorded in the document as having written in.

Much of what they wrote was about cost. Commenters cited a Rutgers working paper putting monitoring and compliance at 20 percent on top of contracted work, a Government Finance Officers Association range of 10 to 20 percent for contract administration, and a Project on Government Oversight finding that federal contracted work ran 1.85 times the cost of federal employees. Those are the commenters' citations, reported as such.

The number the Department did not produce

The more striking passage is the Department's own. Several commenters, including a federal elected official, said the proposal lacked a formal cost-benefit analysis. The Department's answer is not that one exists. It is that one cannot usefully be built.

Staffing mixes, local procurement choices and state labor markets are described in the document as highly heterogeneous, turning on state policy decisions, collective bargaining outcomes and transient economic conditions. Producing a single monetized estimate across contexts that varied, it says, is not feasible with a reasonable degree of confidence. The benefits it does claim, administrative efficiencies and flexibility, are stated as non-quantifiable.

On the word that dominated the comment file, the Department is direct. This rule does not privatize the employment service, it says, and whatever staffing model a state adopts, the state keeps full responsibility for complying with every law that applies. The rule takes effect 60 days after it publishes, and the regulators designated it not a major rule.