Labor & Employment Law Daily Wrap Up, FEDERAL REGULATIONS—OPM proposes overhaul of federal excepted service rules, expanding Trump administration workforce changes, (Sep 17, 2026)

By Brandi O. Brown, J.D.

Federal hiring practices could see meaningful changes under an OPM proposal affecting excepted-service appointments, ALJs, and Pathways conversions.

In a proposed rule scheduled for publication September 18, OPM would alter hiring procedures for excepted-service positions, formally incorporate recently created personnel categories known as Schedule Policy/Career and Schedule G into federal regulations, and revise rules governing Administrative Law Judges, Pathways internship programs, and employee reemployment rights following reductions in force.

OPM claims the changes are intended to simplify complex hiring procedures, reduce administrative burdens, and align regulations with a series of executive orders issued between 2018 and 2026. The agency emphasized that veterans’ preference rights and reemployment protections for certain displaced workers would remain intact.

“Our proposed rule would modernize excepted service hiring rules, remove obsolete or unnecessarily complex procedures, preserve statutory veterans’ preference and restoration rights, update regulations governing Pathways Programs and ALJ appointments, and simplify priority reemployment list provisions,” OPM said in the proposal.

Revised Part 302. At the center of the proposal is a substantial revision of Part 302, the regulations governing employment in the excepted service. Under current rules, agencies often rely on a system of employment lists and detailed orders of consideration that trace their origins to decades-old civil service practices. OPM proposes replacing that structure with a “simplified” framework requiring agencies to identify and consider qualified “priority candidates” before selecting other applicants.

Priority candidates. Priority candidates would include certain preference-eligible employees displaced by reductions in force, employees with restoration rights following compensable workplace injuries, and others entitled to priority placement under statute or binding legal authority. Rather than maintaining formal priority reemployment lists and regular employment lists, agencies could use electronic systems and other documented mechanisms to identify and evaluate eligible individuals.

Although OPM characterizes those revisions as procedural, they occur against the backdrop of a larger administration effort to increase flexibility in federal personnel management and reduce reliance on traditional civil service mechanisms. The agency argues that the changes preserve the substantive protections required by law while eliminating administrative structures it views as outdated.

Policy/Career positions. The proposal also further embeds the administration’s Schedule Policy/Career initiative in federal regulations. Schedule Policy/Career, which replaced the earlier Schedule F framework, is intended for career positions involving confidential, policy-determining, policy-making, or policy-advocating responsibilities.

Under the proposed rule, agencies could continue appointing individuals to Schedule Policy/Career positions through merit-based procedures, but employees in those positions would not serve traditional trial periods. Certain employees could acquire competitive status after completing two years of continued service. The proposal would also permit some positions outside the standard Title 5 personnel system to be designated as Schedule Policy/Career positions where authorized by law and executive order.

Pathways participants. Another notable provision would create a new pathway into those policy-related jobs. OPM proposes allowing eligible participants in the federal Pathways internship and recent graduates programs to be converted directly into permanent Schedule Policy/Career positions. Previously, Pathways participants generally transitioned into competitive-service jobs.

The agency said the change would not automatically grant competitive-service status to Pathways participants converted into Schedule Policy/Career positions. Instead, those employees generally would gain competitive status only after completing two years of continued service in qualifying positions.

Schedule G positions. The proposal also formally codifies Schedule G, a category established in 2025 for noncareer policy-making and policy-advocating positions that typically change with presidential administrations. OPM would create new regulations governing Schedule G appointments and incorporate that category throughout federal personnel regulations.

Schedule G positions are intended to be distinct from the longstanding Schedule C system and are generally associated with positions tied to presidential transitions and political leadership. The proposed amendments would extend Schedule G’s treatment across a variety of personnel programs, including Senior Executive Service conversion rules, suitability regulations, severance-pay provisions, and restrictions governing reassignment of certain senior executives.

ALJ positions. The rulemaking also addresses Administrative Law Judges, continuing changes that began after a 2018 executive order moved ALJs from the competitive service into the excepted service under Schedule E. OPM’s proposal would conform existing regulations to that reality by eliminating references to competitive examinations and lists of eligibles for new ALJ appointments.

New ALJ appointments would continue to be made through Schedule E procedures rather than the previous competitive examination process. Agencies would remain obligated to follow the principle of veterans’ preference “as far as administratively feasible,” but Schedule E appointments would not be subject to traditional Part 302 rating and ranking procedures.

ALJs and reductions in force. The proposal could have particular significance for newer Administrative Law Judges during reductions in force. OPM would eliminate a longstanding ALJ-specific priority referral system and clarify that Schedule E ALJs generally do not receive special reemployment rights solely because they served as ALJs. Instead, they would be treated similarly to other excepted-service employees unless another statutory or regulatory provision provides additional rights. ALJs who retained competitive-service status from before the 2018 changes would continue receiving the protections associated with that status.

Beyond those larger structural changes, the proposal includes several technical revisions. OPM would discontinue monthly Federal Register notices identifying agency-specific excepted-service authorities, replacing them with annual consolidated notices. The proposal would also update hiring authorities for remote and isolated locations, revise disability-hiring provisions under Schedule A, and raise the standard maximum entry level for Recent Graduates appointments to GS-11, consistent with earlier Pathways reforms.

Comments on the proposal will be accepted for 60 days after publication in the Federal Register.

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