During the Great Depression, state and federal job placement assistance programs were ineffective because of political patronage and unqualified staff. To remedy this problem, Congress passed the Wagner-Peyser Act in 1933, establishing a program known as the Employment Service (ES).
The ES program is a federally funded, state-administered, program that provides critical job-search and related services to job seekers across the United States. In Nebraska, some NAPE/AFSCME members who work at the Nebraska Department of Labor that provide services to job seekers at offices across the state are funded by the Wagner-Peyser Act.
The Wagner-Peyser Act directs the Department of Labor to develop and prescribe minimum standards of efficiency for state programs as a condition of the states’ receipt of grant funding. From the earliest days of the program, one requirement the Department has imposed pursuant to this statutory provision is that services be delivered by state employees hired on the basis of merit and whose jobs are protected from political or partisan influence.
In August 2026, the US Department of Labor issued a new rule that would eliminate this requirement, based on a novel statutory interpretation that the requirement was not authorized by the Wagner-Peyser Act. Under the new rule, states would be free to use private contractors to deliver ES services—despite a wealth of evidence showing that such privatization leads to a decrease in the quality of services provided.
In response, our union filed suit against the US Department of Labor to challenge the new rule that undermines the federal ES program by allowing the privatization of critical public service jobs that have historically been performed by impartial civil servants to guard against political patronage and corruption. A copy of the lawsuit is available here.
“Since 1933, merit staffing protections have helped ensure Employment Services are performed by qualified public service workers,” said AFSCME President Patrick Moran (Council 3, Maryland). “Every day, the AFSCME members who provide these services help people in their communities find jobs to support themselves and their families. Merit system protections were created to avoid corruption and patronage in the administration of essential government programs. Taking away those protections and outsourcing to for-profit contractors will hurt not just the workers but the job seekers who rely on the workers’ expertise and fairness to find employment. We will fight to protect the skilled AFSCME members who have dedicated their careers to serving their communities.”