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Which institutions or program types were most affected by the 2025 federal classification change?
Executive summary
Coverage in the provided sources points to several distinct 2025 federal classification or pay-rule changes that most affected specific federal pay systems and programs: the Office of Personnel Management’s Federal Wage System (FWS) redefinition affecting “around ten percent” of the FWS workforce (effective Oct. 1, 2025) [1], broad GS locality-pay and pay-compression effects after a 2% government‑wide raise that hit many locality areas (about 37 of 58) and pushed some GS grades into compression [2] [3], and Postal Service product reclassifications for competitive products and M-bags effective in 2026/2025 notifications [4] [5]. Reporting also highlights program-level impacts such as higher FEHB premiums and proposals that would reclassify or reorganize employees [6] [7]. Available sources do not mention a single, unified “federal classification change” that covers every federal program; instead, different rule changes hit different institution and program types (not found in current reporting).
1. FWS wage-area redefinitions: local blue‑collar workers were concentrated casualties
The Office of Personnel Management’s January 2025 rule on Prevailing Rate Systems changes the criteria for defining Appropriated Fund Federal Wage System wage areas and will be effective October 1, 2025; OPM says the rule will affect “around ten percent of the FWS workforce,” and it warns that while overall budget impact is small, local payroll impacts could be considerable for agencies managing sudden increases [1]. That framing makes clear the most affected institutions are agencies that employ FWS (blue‑collar) workers in narrowly defined wage areas—local facilities, installations, and field offices—where a survey-area redefinition can alter locality pay quickly [1].
2. GS/locality changes and pay compression: white‑collar staff in high‑cost areas
Changes to the General Schedule and locality pay in 2025 — a 2% across‑the‑board raise plus locality adjustments — produced substantial pay‑compression effects in high‑pay localities. Federal News Network reports pay compression now affects 37 of 58 locality pay areas and singled out the San Francisco Bay Area as the most severely compressed locality, where multiple GS grades and steps now hit the pay ceiling (including GS‑15, Step 3 for the first time) [2]. OPM’s locality‑area recommendations and expansions (22 expansions recommended to the Federal Salary Council) indicate that white‑collar employees in large metropolitan/locality pay areas bore outsized effects from classification and locality shifts [3] [2].
3. Postal Service competitive‑product reclassifications: operational/program changes
Two Federal Register notices reflect postal product rate and classification changes in 2025–2026 that affect postal product lines rather than employee pay classifications. The Postal Service posted notices of changes in rates/classifications for competitive products with effective dates in 2025 and applicability into 2026, and updated Mail Classification Schedule language and product descriptions (including changes to Airmail M‑Bags tied to UPU decisions) [5] [4]. Those changes primarily affect Postal Service product operations, mailers, and international mail flows rather than broad federal employee groups [4] [5].
4. Benefits and program‑level shocks: FEHB premiums and budget proposals
Independent coverage flags programmatic shocks that function like classification changes for benefits: FEHB premiums jumped sharply in 2025 (average increases noted in reporting), and budget proposals could change how the FEHB or pay increases are structured — for example, proposing vouchers or merit‑based raises — which would disproportionately affect employees reliant on those benefits [6]. The article notes FEHB premiums increased an average of 13.5% in 2025 and stresses that benefit‑side decisions hit large groups across agencies [6].
5. Political and structural reclassification proposals: Project 2025 and Schedule F threats
Advocacy and union reporting points to proposed political reclassification schemes such as reinstating Schedule F (from Project 2025) that would reclassify policy‑connected career employees and could “politicize the civil service,” potentially affecting large swaths of policy, regulatory, and enforcement staff—if enacted [7]. That material is advocacy/analysis rather than a finalized federal rule in the search set, but it frames how classification changes could be used to reshape institutional staffing and authority [7].
6. Limits, competing perspectives, and what’s missing from these sources
The supplied documents treat multiple, separate actions rather than one overarching “federal classification change.” OPM’s FWS rule and OPM/OPM‑related locality discussions focus on technical pay-area and wage surveys [1] [3]. Federal News Network and related outlets frame concrete pay‑compression outcomes for GS employees in high‑cost localities [2]. Postal Register notices reflect product classification and pricing changes [4] [5]. Sources do not provide a centralized tally of “most affected institutions” across government; therefore claims about totals or ranking across all agencies are not found in current reporting (not found in current reporting). Where sources offer advocacy or prognostication (Project 2025), readers should note the source’s organizing stance: AFGE’s coverage warns of large job losses and politicization if proposals are implemented [7].
Bottom line: operational postal products, local blue‑collar FWS workers in affected wage areas, and white‑collar GS employees in high‑locality pay areas are the clearest, source‑documented groups most affected by the separate 2025 classification and pay rule changes in the materials you provided [1] [2] [4].