How are annual Federal Wage System raises determined?
Under the FWS, pay is to be based on what private industry is paying for comparable levels of work in a local wage area. Employees are paid the full prevailing rate at step 2 of each grade level. Step 5, the highest step in the FWS, is 12 percent above the prevailing rate of pay. The agency that employs the majority of wage grade employees in the area, almost always the Defense Department, is responsible for conducting wage surveys, analyzing data, and issuing wage schedules each year.

However, legislation traditionally limits local FWS increases to General Schedule raise paid in the same local area.

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