Roughly 14,500 blue-collar federal employees will soon see their federal pay rates increase, as a result of a final rule aiming to bring the Federal Wage System’s pay rates more in line with those on the General Schedule.

The Office of Personnel Management finalized the changes to the map of FWS wage areas in a new final rule, which is set to publish to the Federal Register on Jan. 21. The regulations will take effect in October for FWS — a federal pay system comprising about 168,000 employees who mostly work at the departments of Defense and Veterans Affairs.

In practice, OPM’s final regulations will align the map of FWS wage areas more closely with the General Schedule’s locality pay map. The regulations mostly impact federal employees working at three major military installations: Tobyhanna, Letterkenny and Anniston Army Depots.

The rule is scheduled to publish on the second day of the Trump administration, but OPM declined to comment on if it’s working with President-elect Donald Trump’s transition officials to prepare them for the changes. Still, OPM Acting Director Rob Shriver said the implementation process at this point is “mechanical,” and that he was “confident” the final rule will be implemented.

“I am really proud that an issue that has been a challenge for multiple administrations going back almost 20 years is one that we’ve been able to resolve,” Shriver told reporters during a press conference Tuesday. “These blue-collar workers deserve to be treated equitably with their General Schedule counterparts, and that is the problem that this rule, at long last, resolves.”

About 10% of the FWS workforce, or roughly 17,000 FWS employees nationwide, will see their pay rates change as a result of the final regulations. While about 14,500 of the impacted employees will see their pay rates increase under OPM’s final regulations, around 1,800 will be covered by “pay retention” rules and see their pay rates stay the same, where they otherwise would have decreased.

Meanwhile, 500 employees on temporary and term assignments will receive lower pay rates under the new wage area boundaries, since they are not eligible for pay retention, OPM said.

The remaining 90% of FWS employees will not see any changes to their pay rates.

“The benefits of this final rule outweigh the negative impacts since this rule will better equalize geographic pay area treatment across the federal government’s two main pay systems,” OPM wrote in the final rule.

The final rule comes after a 2022 request from Congress for OPM consider ways to align the locality pay maps for FWS and GS employees. The Federal Prevailing Rate Advisory Committee then voted to move forward with a pay change proposal in December 2023. OPM finally proposed regulations to change the mapping of FWS in October 2024.

Many blue-collar federal employees have been pushing for years to update the FWS map, citing long-standing disparities between the two federal pay systems. While the General Schedule is regularly reviewed and occasionally updated with new locality pay areas, the Federal Wage System has remained largely unchanged for decades, leading to growing wage disparities between FWS and GS.

“For too long, workers hired under the Federal Wage System were paid less money than their counterparts hired under a different pay system to work in the same area,” President Joe Biden said in a statement in October.

For instance, at Tobyhanna Army Depot, the creation of a new GS pay area in 2005 led to an immediate 12% locality-based pay raise for workers on the GS system. Although employees on both federal pay systems worked “in close proximity,” blue-collar employees on the FWS did not receive a raise, leading to a “deep sense of unfairness on the part of FWS employees,” OPM wrote in its final rule.

OPM received nearly 600 comments on the proposed regulations from October 2024, the vast majority of which expressed strong support for the FWS changes, and just one negative public comment.

The updated FWS map will have 118 wage areas rather than the 130 wage areas that currently exist. Employees in wage areas that are being abolished will be moved to other wage areas that will still exist once the final rule takes effect this fall.

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