Editor's Note: This report is based on survey data from January 2025 that was published in March 2025. This is the most recent data available. (Source: Bureau of Labor Statistics)‍

Nearly 150 thousand jobs were added by US employers in February - the month when this data was collected - and the national unemployment rate fell by one-tenth of a point to 4%.

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Looking at the state data, however, there was very little movement of significance in state unemployment levels, with the exception of Pennsylvania which recorded a 0.1% increase in state unemployment, rising from 3.7% to 3.8%. 

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Similarly, despite the net job additions, no state recorded a significant increase in payroll figures, but 4 states actually saw a reduction in in-state employment: Georgia, Missouri, and West Virginia, which all recorded a 0.6% decrease in employment, and Indiana, which recorded a 0.4% decrease.

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Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for February 2025.

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States With the Highest Unemployment Rates

For the third month in a row, Nevada had the highest unemployment rate, which is up slightly at 5.8%, followed by California at 5.4%, which is down from 5.5% the month before.

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Washington DC, Kentucky, and Michigan all came in at 5.3% unemployment, but Washington DC is dropping while Kentucky and Michigan are seeing unemployment climb.

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Illinois - at 4.9% unemployment - was the only other state above the national average of 4% during February.

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Over the last year, 32 states have recorded an increase in unemployment, the largest of which was reported in Michigan, which saw its level of unemployment rise from 4.0% to 5.3% between January 2024 and January 2025.

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Colorado and South Carolina also saw a significant increase in unemployment over the course of the last 12 months when both saw a 0.9% increase, while Mississippi and Wyoming fared nearly as poorly at plus 0.8% unemployment.

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States With The Lowest Unemployment Rates

As we entered the new year, South Dakota held steady at 1.9% unemployment and continued its streak of maintaining the lowest unemployment rate in the country, which stretches for 13 consecutive months now. 

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North Dakota and Vermont had the next lowest unemployment levels at 2.6%, followed by Montana at 2.8% and Nebraska and New Hampshire at 2.9%.

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17 states in total had unemployment rates below the national average.

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Over the last 12 months, only Montana and Washington state have registered decreases in unemployment at 0.2% and 0.3%, respectively.

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States With New Job Losses

Georgia had the largest net loss in jobs, recording a net decrease in its workforce of more than 28 thousand over the course of the month, which represents a 0.6% decrease.

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Missouri and West Virginia each recorded workforce reductions of 0.6% as well, though the net job losses at minus 17 thousand and about minus 4 thousand, respectively, were much smaller than in Georgia due to their relatively smaller populations.

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Indiana also saw a reduction in its workforce, which amounted to a drop of about 0.4% and amounted to a little less than 13 thousand jobs. 

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States With New Job Gains

No state saw statistically significant job gains over the month, although 17 states did record net increases in jobs over the last year.

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Alaska and Idaho had the largest percentage gains in workforce size at plus 2.8% over the year, followed by Texas at 2.4% and Utah at 2.1%.

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Texas, Florida, and New York saw the largest number of net new jobs over the last 12 months at about plus 14 thousand, 10 thousand, and 10 thousand respectively. 

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Mployer’s Take

Due to the timing of the latest state release from the Bureau of Labor Statistics, this report came out much later than usual relative to the collection of the data that the report is based on, and we’ll actually be getting updated data from the states by the end of the week at this point.

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In fact, we’ve already seen follow-up data on the employment situation nationally, which showed the unemployment rate tick up by a tenth of a point despite the addition of another 150 thousand jobs to US payrolls. 

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On Friday when we get new state employment data again, it will likely look very similar to this set, although it will be interesting and informative to see which additional states start to see their unemployment rates moving in the wrong direction.

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But in terms of the bigger picture, our analysis and the economy itself in many ways are in a holding pattern in the short term as the policy changes overseen by the new administration begin to manifest and the real-world impacts become more clear. 

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We’ll check in after the new data is made available later this week, and it’s possible there will be additional noteworthy developments between now and then - potentially including additional stock market volatility and/or new policy announcements - but barring major unforeseen developments, the next report will closely resemble this one.

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It will take a bit more time before the full momentum and trajectory of the US economy can fully respond to policy changes that have already occurred - not to mention whatever additional changes may be in store - but we’ll be keeping an eye out in the meantime for noteworthy markers pointing toward what’s to come as they start to appear.

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Looking for more exclusive content? Check out the Mployer blog.

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Editor's Note: This report is based on survey data from February 2025 that was published in March 2025. This is the most recent data available. (Source: Bureau of Labor Statistics)

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US employers added 151 thousand jobs last month, which was just short of the predicted 160 to 170 thousand and just over the 143 thousand jobs initially reported last month, while there was very little movement in the unemployment rate, rising by less than one-tenth of a point to 4.1%.

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There was very little movement in most of the employment metrics, although the employment-population ratio fell by two-tenths of a point to 59.9% - which is only the second time this figure has fallen below 60% since November of 2022 (this ratio was 59.8% in November 2024).

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The biggest changes occurred in the number of people who were employed part-time for economic reasons, which grew by almost 11% from under 4.5 million to over 4.9 million, and the number of people who are unemployed but want a job rose buy more than 7.5% to 5.9 million, which may be the strongest indications of a softening labor market in an otherwise largely stable report.

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The healthcare industry added the largest number of jobs at 52 thousand, which is right in line with the 54 thousand jobs the healthcare industry has added on average each of the previous 12 months.

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The financial services industry added the next largest number of jobs at 21 thousand, which is more than 4 times greater than the 5 thousand job additions the industry had added on average over the last year, while the transportation & warehousing industry added about 18 thousand jobs, well above the current 13 thousand monthly average, and the social assistance industry added about 11 thousand jobs, which is a little less than half of the running monthly average.

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The leisure and hospitality industry recorded a net loss of about 16 thousand jobs, while the retail industry saw a decrease of 6 thousand jobs, and there were about 10 thousand net government jobs lost over the course of the month.

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Average hourly pay rose by about 10 cents to $35.93 per hour (an increase of 0.3%), while the length of the average workweek held steady at 34.1 hours per week. 

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Mployer’s Take

This report represents the first set of employment situation data collected exclusively under the second Trump administration, but the next few months are when we’ll begin really seeing more direct impacts from the resulting changes in policies, and it will take another several months beyond that before many of the tangential effects become more apparent.

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In the meantime, the Chairman of the Federal Reserve says the economy is in good shape, and reiterated the Fed’s wait-and-see approach with interest rate cuts. While the Fed cut rates by a quarter percentage point 3 times next year, and analysts and investors are still predicting another 2 or 3 comparable rate cuts in 2025, the Fed has indicated it is in no hurry to continue cutting rates, especially in light of the 4% annual wage growth over the trailing twelve months. 

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The assumed interest rate cuts may be in part based on the increasing likelihood of economic downturn if not recession on the horizon, which more economists are predicting within the next year than were doing so just a couple of months ago. Should such a downturn materialize, it will likely inspire the Fed to act quickly in bringing down rates.

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While some of the new administration’s federal workforce cuts may be reflected in the data of this latest report, most of the cuts made so far and the impact of those cuts, as well as the complementary private job losses, won’t begin showing up in this report until next month.

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Those disruptions to the labor market combined with uncertainty about consumer goods prices and international trade in part due to tariffs and tariff posturing, have led to predictions of significant GDP contraction of almost 2.5% in the first quarter of 2025 by at least one Federal Reserve Bank. 

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There are a lot of moving parts that will ultimately shape the short-term economic future, and those kinds of dynamic systems are difficult to predict even without so many potential variables in flux both domestically and internationally.

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That said, as more economic analysts are becoming more pessimistic in their predictions, it is worth considering that trend as a data point worth taking into account in its own right, and we'll continue updating the outlook as more data comes in in the coming months.

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Check out the Mployer blog here.

‍Each month, Mployer collects and presents some of the most relevant and most pressing recent changes in law, compliance, and policy in areas related to employee benefits, health care, and human resources.

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Alternative Manner For 1095-B & 1095-C Distribution

If your organization is using the alternative method for distributing 1095-B and 1095-C forms in accordance with the Paperwork Burden Reduction Act, your website must be in compliance from the first business day of March through at least October 15th. You can find guidance from the IRS about how to properly follow compliance protocols here.

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DEI Executive Orders Paused

On February 21, 2025, a federal judge put a stay on Trump’s Executive Order limiting the ability of federal agencies and federal contractors to operate Diversity Equity and Inclusion programs. The court questioned whether the order violated free speech rights and potentially illegally restricted otherwise legal actions taken by private entities. You can find the decision here. 

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Form 300A Submission Due

From February 1st to April 30th, non-exempt (low-hazard) employers who had at least 11 employees at some point in 2024 must post in a conspicuous place a copy of OSHA Form 300A, Summary of Work-Related Illness and Injury, certified by a company executive.

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For non-exempt employers that had 250 or more employees at some point last year and employers with 20 or more employees in specified high-risk industries, OSHA requires electronic submissions, which are due by March 2nd, 2025. 

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You can find the electronic submission platform here. 

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Executive Orders

In his first days since returning to office, President Trump has signed a series of executive orders dealing with labor and employment issues for federal employees and federal contractors, with more expected still to come.

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While thus far these orders don’t apply to private employers in general - with the exception of those that accept federal funds and/or are federal contractors - these orders will not only affect a sizable portion of the workforce directly, but they will also likely inspire some private employers to modify their practices and follow the example set by the executive branch.

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The new rule that will most likely have the largest impact beyond the sphere of federal employees is Executive Order 11246, which makes it so that federal contractors no longer have to practice affirmative action in the hiring process for most protected classes. The only protected classes excepted from the order are veterans and individuals with disabilities, for whom affirmative action standards still apply. 

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Although federal contractors will no longer be required to maintain affirmative action programs, Title VII of the Civil Rights Act remains in effect to prevent discrimination against protected classes like race, gender, sexual orientation, and national identity. 

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You can read more here

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Spence v. American Airlines

A Federal District Court Judge in Northern Texas ruled that American Airlines had breached its fiduciary duty by working with an investment manager that promoted ESG practices in a way that ran counter to the economic interests of the employee retirement fund beneficiaries.

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The repercussions of this ruling could be industry-reshaping if upheld, although there were many additional conflicts of interest between American Airlines and their investment fund manager that may limit how broadly applicable the ruling will ultimately prove to be.

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The judge has already found American Airlines in breach of their fiduciary duty, but he has yet to assess damages, which will influence the probability of appeal and the likelihood of copycat cases.

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You can read more about this case here.

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EAD Extension Formalized

As of January 13, 2025, the extension period for certain renewal Employee Authorization Document (EAD) applications filed on May 4, 2022 or later has been formalized at 540 days.

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You can read more here.

IRS Mileage Reimbursement Rate Increased

As of January 1, 2025, the IRS mileage reimbursement rate for road miles driven for business purposes increased by 3 cents per mile from 67 to 70 cents per mile driven. 

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PCORI Fee Increase

The IRS released a statement announcing a 25-cent increase in Patient-Centered Outcomes Research Institute fees for covered plan years ending on or after October 1, 2024, and before October 1, 2025. 

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The new fee is $3.47 per covered life.

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You can read more here. 

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DOL Reinstates Simplified Tip Credit Rule

In response to a Federal Court of Appeals Decision that vacated the so-called 80/20/30 rule that was instituted in 2021, the Department of Labor officially reverted to the previous tip credit rule.

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You can read more here.

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Increased ACA Flexibility and Affordability Threshold

In the final days before Christmas a few weeks ago, the Employer Reporting Improvement Act both became law. 

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As of January 1, 2025, the threshold for what qualifies as affordable coverage is now 9.02%, which means that an employee’s required contribution to the plan can be no more than 9.02% of their salary in order for the plan to be considered affordable and to avoid potentially paying the penalty. 

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You can read more about the affordability threshold here.

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EAP & Highly Compensated Exception Update

A federal court in Texas determined that the Department of Labor exceeded its authority last summer by increasing the minimum pay thresholds for employees to qualify under the executive, administrative, and professional and highly-compensated employee exceptions to minimum wage and overtime protections. 

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Those minimum pay thresholds have reverted to their prior levels - back to $684 per week for the EAP exemption (down from $844 per week under the now defunct rule), and back to $107,432 per year for the HCE exemption (down from $132,964 per year under the now defunct rule). 

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NLRB Says No Captive Audience Meetings on Unionization Issues

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The National Labor Relations Board has issued a decision prohibiting employers from forcing employees under threat of punishment to attend meetings during which the employer will share views on unionization or its impacts. 

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Employers are allowed, however, to convene employees and share their views on unionization and potential impacts so long as employees are not disciplined or adversely affected in any way for not attending (or leaving early). Employers should not even keep or maintain such attendance records.

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You can read more here. 

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State Updates

Massachusetts: Employers with more than 50 employees must post the new veterans services poster that was just released by the Massachusett Executive Office of Labor and Workforce Development. The poster must be conspicuously displayed in an area that is accessible to all employees. You can find the poster here. 

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New York: Beginning March 2, 2025, all New York employers will be prohibited from requiring job applicants to provide a copy of their criminal history record, which closes a loophole employers had been exploiting to obtain such records despite restrictions regulating their access to those records.

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Beginning May 8, 2025, NY employers with more than 3 employees must conspicuously post their lactation room accommodation policies and guidelines as well as the relevant state requirements both somewhere accessible by all employees and on the organization's intranet if applicable.

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Beginning June 2, 2025, employers with 10 or more retail employees must have in place a written policy and training program for violence prevention measures and retail employers with 500 or more employees must install and/or maintain silent response buttons to alert authorities about emergencies. This legislation was originally slated to take effect March 4, 2025, But was amended to clarify employer responsibilities.

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Further, as of January 1, 2025, New York employers are required to provide 20 hours of paid prenatal leave during a 52 week period. Also, as of the new year, the characteristics to which equal protection was extended via the New York State Human Rights Law and the resulting protections are formally enshrined in the New York State Constitution. Those characteristics include: age, disability, ethnicity, gender identity, gender expression, national origin, pregnancy, and anything else related to reproductive healthcare.

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New York employers that receive criminal history records for applicants and employees must also now provide those applicants and employees with a copy of those records and a copy of the applicable New York corrections law as well as an opportunity to correct any inaccurate information that may be contained in those records.

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Colorado: The City of Boulder increased the minimum wage to $15.57 ($12.55 for tipped employees) as of January 1, 2025.

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Oregon: As of January 1, 2025, Paid Leave Oregon provides leave for employees completing necessary legal steps associated with adopting and/or fostering children.

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IRS Publishes 2025 Annual Retirement Plan Maximums

• The 401(k) annual contribution limit increased from $23,000 to $23,500 in 2025.
• The catch-up contribution limit stayed unchanged at $7,500 for participants aged 50 and over.
• The SECURE Act 2.0 also instituted a new type of catch-up contribution, which enables participating people (age 60 to 63) to contribute up to $11,250 annually.

You can read more here. 

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IRS Publishes 2025 Annual Benefit Maximums

• The HFSA contribution max is $3,300 (maximum carryover is $650 for HFSAs with carryover features).
• The QSEHRA max for total reimbursements is $6,350 for single coverage and $12,800 for family coverage.
• The max employee tax credit for adoption assistance is $17,280, with additional conditions depending on employee salary range. 
• The monthly parking and mass transit benefit max is $325. 

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You can find the complete IRS 2025 benefit contribution limit list here.

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Minimum Wage Increases for Federal Contractors

As of January 1, 2025, the minimum wage for work conducted in association with federal contracts covered by Executive Order 13658 is $13.30 ($9.30 for tipped employees), while the minimum wage paid for work conducted in association with federal contracts covered by Executive Order 14026 is $17.75 per hour for both tipped and non-tipped employees.

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Additional guidance about which kinds of contracts are covered by which executive order can be found here. 

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ERISA Guidance for Long-Term Part-Time Employees

You can find guidance for ERISA 403(b) plan eligibility requirements for long-term, part-time employees according to the updated standards from the Secure ACT 2.0 here.

Editor's Note: This report is based on survey data from January 2025 that was published in February 2025. This is the most recent data available. (Source: Bureau of Labor Statistics)

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US employers added 143 thousand jobs last month, which fell a bit short from the almost 170 thousand that economists were forecasting.

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At the same time, the national unemployment rate average ticked down by one-tenth of a point to 4% for the first time since May of 2024.

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Beyond the slight movement in unemployment rate and increase in payroll figures, however, the labor market showed little movement whatsoever, with no significant change in labor force participation rate (62.6%) or in the number of people working part-time but who want full-time work (4.5 million). 

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There was similarly little movement among the long-term unemployed (1.4 million) or the number of people who want a job but haven’t actively looked for one in the last 4 weeks (5.5 million) - only a relatively small portion of which had actively sought work in the last year (1.6 million) - all of which held steady from month to month.

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Although the fewer than 150 thousand net jobs added across the US last month is down substantially from the more than 250 thousand net jobs recorded the month before, there were several industries that performed in line with expectations.

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The healthcare industry reported the largest net increase in jobs last month with plus 44 thousand, which is slightly below the 55 thousand healthcare jobs averaged each month in 2024.

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The retail industry had the next largest net job increase with plus 34 thousand, followed by government jobs at plus 32 thousand, then the social assistance industry, which grew by 22 thousand payroll entries.

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Mining was the only industry that saw a net job loss over the month (minus 8,000), while the remainder of industries remained essentially unchanged, including the construction industry, the manufacturing industry, the wholesale trade, the information industry, the transportation and warehousing industry, the leisure and hospitality industry, the professional and business services industry, and the financial activities industry.

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Average hourly pay rose by about 17 cents to $35.87 per hour (an increase of 0.5%), while the average workweek length fell slightly to 34.1 hours per week. 

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Mployer’s Take

This BLS report contains the final batch of data collected under the Biden administration, which saw the US unemployment rate drop by 2.2% under its watch, down from 6.2% in February of 2021 to 4% as of January 2025.

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This report also marks the 49th consecutive month of net job gains, which is the second longest streak of positive job growth since these numbers have been tracked. 

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In fact, the only longer period of consecutive job growth in recorded US history occurred between October of 2010 and February of 2020, just as the pandemic was ramping up in the US, and were it not for the COVID employment dip which was accompanied by a historically quick recovery, the current ongoing streak of job growth and the last would be almost 4 times longer than the next longest streak.

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Given that the 5th longest streak is 44 consecutive months of job growth, even getting to 40 consecutive months of growth is historically noteworthy and hitting 50 or more months of job growth has only happened once before, about 10 years ago. If the US maintains its current trajectory and achieves positive job growth again next month, that will be the second occurrence ever of more than 50 consecutive months of job growth, and those streaks have essentially occurred back to back.

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All that to say, while the current job growth streak is not exactly unprecedented, it's pretty close and the streak does become more of an outlier with each passing month.

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With the transfer of power comes questions about how trade agreement negotiations and immigration policy orders will ultimately play out, for example, and those outcomes will affect labor and employment issues both directly and indirectly.

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While those outcomes remain to be seen, however, the uncertainty itself can in many cases have a negative drag on economic views, perhaps as evidenced in the notable downturn in consumer sentiment of late, but it’s likely that sentiment will rise or fall with economic performance, and those numbers will start coming in next month.

‍

Check out the Mployer blog here.

Each month, Mployer collects and presents some of the most relevant and most pressing recent changes in law, compliance, and policy in areas related to employee benefits, health care, and human resources.

‍

Form 300A Submission Due

From February 1st to April 30th, non-exempt (low hazard) employers who had at least 11 employees at some point in 2024 must post in a conspicuous place a copy of OSHA Form 300A, Summary of Work-Related Illness and Injury, certified by a company executive.

‍

For non-exempt employers that had 250 or more employees at some point last year and employers with 20 or more employees in specified high risk industries, OSHA requires electronic submissions, which are due by March 2nd, 2025. 

‍

You can find the electronic submission platform here. 

‍

Executive Orders

In his first days since returning to office, President Trump has signed a series of executive orders dealing with labor and employment issues for federal employees and federal contractors, with more expected still to come.

‍

While thus far these orders don’t apply to private employers in general - with the exception of those that accept federal funds and/or are federal contractors - these orders will not only affect a sizeable portion of the workforce directly, but they will also likely inspire some private employers to modify their practices and follow the example set by the executive branch.

‍

The new rule that will most likely have the largest impact beyond the sphere of federal employees is Executive Order 11246, which makes it so that federal contractors no longer have to practice affirmative action in the hiring process for most protected classes. The only protected classes excepted from the order are veterans and individuals with disabilities, for whom affirmative action standards still apply. 

‍

Although federal contractors will no longer be required to maintain affirmative action programs, Title VII of the Civil Rights Act remains in effect to prevent discrimination against protected classes like race, gender, sexual orientation, and national identity. 

‍

You can read more here

‍

‍Spence v. American Airlines

A Federal District Court Judge in Northern Texas ruled that American Airlines had breached its fiduciary duty by working with an investment manager that promoted ESG practices in a way that ran counter to the economic interests of the employee retirement fund beneficiaries.

‍

The repercussions of this ruling could be industry-reshaping if upheld, although there were many additional conflicts of interest between American Airlines and their investment fund manager that may limit how broadly applicable the ruling will ultimately prove to be.

‍

The judge has already found American Airlines in breach of their fiduciary duty, but he has yet to assess damages, which will influence the probability of appeal and the likelihood of copycat cases.

‍

You can read more about this case here.

‍

EAD Extension Formalized

As of January 13, 2025, the extension period for certain renewal Employee Authorization Document (EAD) applications filed on May 4, 2022 or later has been formalized at 540 days.

‍

You can read more here.

IRS Mileage Reimbursement Rate Increased

As of January 1, 2025, the IRS mileage reimbursement rate for road miles driven for business purposes increased by 3 cents per mile from 67 to 70 cents per mile driven. 

‍

PCORI Fee Increase

The IRS released a statement announcing a 25-cent increase in Patient-Centered Outcomes Research Institute fees for covered plan years ending on or after October 1, 2024, and before October 1, 2025. 

‍

The new fee is $3.47 per covered life.

‍

You can read more here. 

‍

DOL Reinstates Simplified Tip Credit Rule

In response to a Federal Court of Appeals Decision that vacated the so-called 80/20/30 rule that was instituted in 2021, the Department of Labor officially reverted to the previous tip credit rule.

‍

You can read more here.

‍

Increased ACA Flexibility and Affordability Threshold

In the last weeks of 2024, the Paperwork Burden Reduction Act and the Employer Reporting Improvement Act both became law. 

‍

The former will provide an alternative means for employers to distribute forms 1095-B and 1095-C to employees, and the latter extends the time employers have to respond to IRS notice of audit 226-J forms from 30 days to 90 days. 

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In 2025, the threshold for what qualifies as affordable coverage also increases from 8.39% to 9.02%, which means that an employee’s required contribution to the plan can be no more than 9.02% of their salary in order for the plan to be considered affordable and to avoid potentially paying the penalty. 

‍

You can read more about the affordability threshold here.

‍

EAP & Highly Compensated Exception Update

A federal court in Texas determined that the Department of Labor exceeded its authority last summer by increasing the minimum pay thresholds for employees to qualify under the executive, administrative, and professional and highly-compensated employee exceptions to minimum wage and overtime protections. 

‍

Those minimum pay thresholds have reverted to their prior levels - back to $684 per week for the EAP exemption (down from $844 per week under the now defunct rule), and back to $107,432 per year for the HCE exemption (down from $132,964 per year under the now defunct rule). 

‍

State Updates

New York: Beginning March 4th, employers with 10 or more retail employees must have in place a written policy and training program for violence prevention measures. 

‍

Further, as of January 1, 2025, New York employers are required to provide 20 hours of paid prenatal leave during a 52 week period. Also, as of the new year, the characteristics to which equal protection was extended via the New York State Human Rights Law and the resulting protections are formally enshrined in the New York State Constitution. Those characteristics include: age, disability, ethnicity, gender identity, gender expression, national origin, pregnancy, and anything else related to reproductive healthcare.

‍

New York employers that receive criminal history records for applicants and employees must also now provide those applicants and employees with a copy of those records and a copy of the applicable New York corrections law as well as an opportunity to correct any inaccurate information that may be contained in those records. 

‍

Colorado: The City of Boulder increased the minimum wage to $15.57 ($12.55 for tipped employees) as of January 1, 2025.

‍

Oregon: As of January 1, 2025, Paid Leave Oregon provides leave for employees completing necessary legal steps associated with adopting and/or fostering children.

‍

IRS Publishes 2025 Annual Retirement Plan Maximums

• The 401(k) annual contribution limit increases from $23,000 to $23,500.
• The catch-up contribution limit stays unchanged at $7,500 for participants aged 50 and over.
• The SECURE Act 2.0 also instituted a new type of catch-up contribution, which enables participating people (age 60 to 63) to contribute up to $11,250 annually.

You can read more here. 

‍

IRS Publishes 2025 Annual Benefit Maximums

• The HFSA contribution max is $3,300 (maximum carryover is $650 for HFSAs with carryover features).
• The QSEHRA max for total reimbursements is $6,350 for single coverage and $12,800 for family coverage.
• The max employee tax credit for adoption assistance is $17,280, with additional conditions depending on employee salary range. 
• The monthly parking and mass transit benefit max is $325.

You can find the complete IRS 2025 benefit contribution limit list here.

‍

Minimum Wage Increases for Federal Contractors

As of January 1, 2025, the minimum wage for work conducted in association with federal contracts covered by Executive Order 13658 is $13.30 ($9.30 for tipped employees), while the minimum wage paid for work conducted in association with federal contracts covered by Executive Order 14026 is $17.75 per hour for both tipped and non-tipped employees.

‍

Additional guidance about which kinds of contracts are covered by which executive order can be found here. 

‍

ERISA Guidance for Long-Term Part-Time Employees

You can find guidance for ERISA 403(b) plan eligibility requirements for long-term, part-time employees according to the updated standards from the Secure ACT 2.0 here. 

‍

ACA Affordability Threshold Increase

Large employers with an average of 50 or more full-time employees or the equivalent are required to either offer employees minimal, affordable health coverage or they must pay a penalty in the event that an employee secures health coverage with a premium tax credit via the exchanges. 

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In 2025, the threshold for what qualifies as affordable coverage increases from 8.39% to 9.02%, which means that an employee’s required contribution to the plan can be no more than 9.02% of their salary in order for the plan to be considered affordable, which allows employers to avoid potentially paying the penalty. 

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You can read more about the affordability threshold here.

Editor's Note: This report is based on survey data from December 2024 that was published in January 2025. This is the most recent data available. (Source: Bureau of Labor Statistics)

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Despite the expectation-exceeding quarter of a million net jobs added last month across the US, unemployment actually increased in 6 states and only decreased in 2 states, with the remaining 42 states and Washington DC showing no significant movement in either direction.

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Payroll figures were even more steady month-to-month, with 48 states and DC seeing almost no change in payroll during December while only 2 states saw a net increase in payroll figures.

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Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for January 2025.

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States With the Highest Unemployment Rates

Nevada had the highest unemployment rate for the second consecutive month, holding steady at 5.7%, followed by California and Washington DC at 5.5%, Kentucky and Illinois at 5.2%, and Michigan at 5.0% unemployment.

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All other states have unemployment rates that are at or below the national average of 4.1%

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Mississippi and Alabama had the largest jumps in unemployment rate last month - both climbing from 3.1% to 3.3%. Colorado, Maine, Massachusetts, and Pennsylvania each saw their state unemployment rate climb by 0.1%, as well.

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Over the last year, 28 states in total have recorded an increase in unemployment rate, with the steepest rises occurring in South Carolina (1.7%), Rhode Island (1.2%), Colorado (1.1%), and Indiana and Kansas at 1.1% each.

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States With The Lowest Unemployment Rates

South Dakota has maintained the lowest unemployment rate in the country for the last 12 months in a row, staying consistently at 1.9% unemployment for the last 3 months.

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Vermont has the next lowest unemployment rate at 2.4% followed by North Dakota at 2.5%.

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In total, 21 states have employment rates below the US average of 4.1%. 

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Only 2 states recorded a decrease in unemployment over the last month - Minnesota, which saw its unemployment rate drop from 5.5% to 5.3%, and Montana, which saw its unemployment rate fall by 0.1% from 3.2% to 3.1%. 

Over the last 12 months, 6 states in total have seen net unemployment rate reductions, led by Connecticut, which saw its unemployment rate decrease by 1.2% over the year, followed by Wisconsin and Arizona at minus 0.4% each. 

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States With New Job Losses

No state recorded net job losses over the last month or the last year.

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States With New Job Gains

Texas and Missouri were the only states that had a net increase in payroll last month, adding about 37 thousand and 11 thousand jobs respectively. 

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Over the last year, 33 states have seen an increase in their payroll figures, with Texas and California reporting the largest number of net jobs added while Idaho had the largest percentage increase in payroll figures at plus 3.6%, followed by Missouri and South Carolina at 2.8% each.

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Mployer’s Take

Despite the downtick in the unemployment rate and huge over-performance of jobs reflected in this month’s Employment Situation release, there was relatively little evidence of those gains seen in the states, which were a model of stability nearly across the board.

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Data from different labor surveys can and will often lead to results that don’t necessarily align, and that appears to be the case here.

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Next month might provide some additional context that may help better interpret the disconnect between employment reports showing growth and those showing stability, but next month’s report will cover data collected on both sides of the transition from one session of Congress and one presidential administration to the next.

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Whether there is much insight yet to be obtained about economic data at the close of the previous term will quickly become overshadowed by the potential economic implications of new policies that are proposed and enacted over these first few months of 2025.

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With a flurry of activity both at the federal and state level already, including both legislation and executive orders that carry significant economic implications, that’s where we’ll be keeping an eye out in the months ahead as the economic and workforce impacts take shape. 

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