The Department of Homeland Security has finalized new personnel rules governing pay, job classification, union rights and appeal rights that will affect most of the department’s employees. As previously indicated, DHS plans to switch most white collar employees to a pay banding system in which annual raises—and advancement within the pay band–will be more closely linked to performance than longevity, and in which employees also will be in line for raises based on labor market conditions for their occupations both nationally and locally. A first group of about 10,000 employees will move into the pay-for-performance system effective October 1, although their pay would not reflect any changes until January 2007. A second group of about the same size will follow a year later, and the remainder of the employees covered by the new pay system, about 80,000 more, another year later—meaning the bulk of affected employees won’t see any difference in their raises until January 2009.