A federal judge yesterday cleared the way for more than 100,000 current and former federal employees to collect $173.5 million in back pay that the government had denied them for as long as 20 years.

Judge Nancy B. Firestone of the U.S. Court of Federal Claims signed off yesterday on the proposed financial settlement reached in November by the Justice Department and the National Treasury Employees Union.

"After all of this effort, it will be very gratifying to see this money paid to those who deserve it," said Colleen M. Kelley, president of the NTEU, which initiated the class action lawsuit in 1983. The union represents 150,000 employees in 28 agencies.

Charles Miller, a Justice Department spokesman, said, "We are pleased with the judge's decision to approve the settlement."

Under the agreement, the government also will pay $3.6 million in plaintiffs' attorney fees and $500,000 to cover legal expenses

The lawsuit stemmed from a 1982 Office of Personnel Management rule governing how pay raises would be calculated for federal employees who receive "special rate" salaries. Such employees operate under a different pay scale than general schedule employees because they work in hard-to-fill positions.

Under the 1982 regulation, the salaries of special rate employees were no longer reviewed whenever general schedule employees received a federal pay raise, a move the union contended unfairly capped their raises from 1982 to 1988.

"As a result, many special rate employees received little or no pay increases during the years the OPM regulation was in effect, while their colleagues paid under the general schedule received pay increases almost every year," Firestone wrote in her order.

She described the settlement as "fair, adequate and reasonable."

The union prevailed after three rounds of litigation in federal district court and two in federal appeals court, sending the matter to the claims court to determine the amount of back pay, interest and lost retirement benefits that should be awarded.

The settlement won't mean money for all of the 212,000 current and former employees who were in the special rate category from 1982 to 1988. The back pay and other monetary awards will go to those whose raises were improperly capped during that period. The NTEU estimates that group to number about 129,000 individuals, many of whom have left the government, retired or died.

The typical award would range from $1,000 to $3,000, although in some cases much larger amounts would be paid, union officials said. The union estimates that 50 people are in line to receive more than $50,000 each.

Under the judge's order, class members will be mailed materials describing the amounts they are owed. Recipients can claim the payment by signing and returning the claim form, or they may file a challenge if they believe the amount is inaccurate. The OPM is required to pay $400,000 to cover settlement administration expenses.

Kelley said class members will receive the mailed notices by spring, with payments to follow late next year.

Union officials said class members who have questions may call 800-750-3406 or check out www.specialratessettlement.com.