The notice argued that maintaining and improving the site no longer makes sense "given that AJB duplicates what is already available in the private sector."

That logic rings true to Peter Weddle, recruiting analyst and executive director of the International Association of Employment Web Sites industry group. Weddle says the Labor Department is wise to shutter America's Job Bank because it replicates services offered by a range of private-sector sites. These include sites targeted at lower-wage and blue-collar workers, says Weddle, whose association includes the major job boards CareerBuilder.com, Monster.com and Yahoo HotJobs.

"Why should the government duplicate what the private sector is providing already?" Weddle says.

But shutting down America’s Job Bank will be a major blow to employers and job seekers, says Gerry Crispin, co-founder of job-site consulting firm CareerXroads. Crispin says the site has been a way to aggregate all the job postings of some 2,000 state employment offices around the country, giving smaller, local employers the ability to broadcast their jobs nationwide for free. And the AJB site is often used by lower-skilled people who turn to state employment offices, he says. Those people may have to rely on a fragmented network of state job sites or private-sector job boards that will not have all the job listings that employers currently give to America’s Job Bank, Crispin says.

"We are basically losing a public resource that provides job seekers a more convenient and easy way to identify the employers who were local and had smaller budgets," he says.

America’s Job Bank dates to 1995, and the free site currently lists more than 2.1 million jobs and more than 682,000 résumés. But it has been criticized as difficult to use. The Labor Department said in a notice that the cost of operating AJB has been as high as $27 million a year, but that "AJB has not been able to keep up with private-sector job boards or industry standards regarding up-to-date technology."

The slated closure of America’s Job Bank could force both companies and states to change the way they do business. Idaho, for example, enticed employers to list jobs on its state job bank with the promise that the listings would get on the better-known America’s Job Bank site.

"We’ve used the national distribution of job postings through AJB as a promotion," says Bob Fick, communications manager at the Idaho Commerce and Labor Department.

America’s Job Bank also has been used by companies as a way to abide by the guidelines of the U.S. Equal Employment Opportunity Commission, Weddle wrote in an online newsletter last month.

"Because this site was operated in conjunction with state employment agencies and open to all U.S. citizens, posting an opening there was a de facto commitment by the organization to consider any qualified person, regardless of their race, ethnicity, age, gender, religion or sexual orientation," Weddle wrote. "The openings may have also been posted on other job boards or on the employer’s own Web site, but as long as candidates from America’s Job Bank were considered, the government was (usually) content that the company had made a conscientious effort at compliance."

An alternative for demonstrating a good-faith effort at EEOC compliance, Weddle wrote, is posting jobs on a variety of sites, including general-purpose employment sites and "diversity" sites such as those that specialize in candidates of a particular race.

The notice sent to state officials said that during the past two years, the Labor Department's Employment and Training Administration had reviewed and evaluated the ongoing viability of maintaining a national job site. "Since the launch of AJB, the number of private-sector Internet-based job boards (Career Builder, Monster, Yahoo! Hot Jobs, etc.) has proliferated, calling into question the need for a Federal government-sponsored job board," the notice said.

The notice, titled "The Phase Out of America’s Job Bank," also said: "The cost of operating AJB has been as high as $27 million per year, with a current operating budget for maintenance-only of $12 million per year… . The cost to maintain AJB and constantly upgrade the foundational technology and make improvements to the site is no longer justifiable given that AJB duplicates what is already available in the private sector."

The notice said the Labor Department has developed an initial transition plan "to ensure that states and other entities, which currently utilize the AJB platform as part of their suite of services, are able to plan and make changes accordingly."

It also indicated that the federal government could contract with a private-sector employment Web site to create some kind of national job board in the future.

"The (Labor) Department recognizes there will be a periodic need for a national job board due to unique circumstances, such as the recent dislocations related to the hurricanes in the Gulf Coast," the notice said. "It is the Department’s assessment that it will be more cost effective to contract for this type of service with the private sector on an ‘as needed basis.’ "

In addition to the notice, the Labor Department also sent state officials a set of questions and answers about the phase-out.

Workforce Management received copies of the two documents from Ted Daywalt, president of private-sector job board VetJobs. Daywalt said he received them from a contact who works in the U.S. Labor Department, and that the documents were sent to state officials. Daywalt declined to identify his contact.

The U.S. Labor Department confirmed the documents were authentic and sent to state workforce administrators in March. In a statement, the department also said a conference call on the subject was held with state workforce administrators on March 17. The department did not respond to a request for further comment.

Although the demise of AJB amounts to a headache for Idaho state officials, it is a relatively minor one, Fick says. Of greater concern, he says, are cutbacks in federal grants for programs such as unemployment insurance and workforce training. "It’s another problem, but in a long list of problems," he says.

In Crispin’s opinion, the loss of America’s Job Bank adds to the economic insecurities faced by many Americans, and is likely the result of political lobbying.

"It’s simple greed on the part of job boards and newspapers who have always feared that a free site will hurt them," he says.

Weddle, though, says he had no knowledge that the decision to close America's Job Bank was based on any lobbying. He also noted that there still are other free job-posting sites, such as Craigslist.

Weddle gives the government credit for launching the site more than a decade ago and helping to spark the online job board field. "It was so successful that it spawned a $2 billion industry," he says.

--Ed Frauenheim

Workforce Management editorial researcher Yasi Jahed contributed to this report.