Salary rates have not been increased since January 2010. Some employees have had their pay frozen during this period, while most have received raises through promotions, for performance or as they advanced up the steps of their pay grades.
The freeze reflected the debate in Congress and the rest of the country over government spending, but at the cost of what federal workers said was undue hardship. Many also lost up to a week of pay this year under the budget cuts known as sequestration.
"This long-overdue modest pay raise for federal government employees is a good step in recognizing the value of federal workers," Sen. Barbara Mikulski, D-Md., chairman of the Senate Appropriations Committee, said in a statement.
"They have been the targets of unending attacks," she said of the workforce. "They've been furloughed, laid off and locked out through no fault of their own."
In August, the president announced his intent to set the raise by default, as is allowed by federal pay law, if Congress did not enact, change or deny it before the end of the calendar year.
Federal employees will see bigger paychecks in the first full pay period of January.
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