Congress passed the legislation in its final form without opposition.
Colleen Kelley, president of the National Treasury Employees Union, attended the signing. NTEU actively supported the bill, working with other federal employee unions and writing letters to numerous members of Congress.
"With the president's signature today, we -- as a nation -- chose to properly honor dedicated federal employees who have made the ultimate sacrifice while serving their country," Kelley said in a statement.
Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, co-sponsored the bill with Rep. Richard Hanna, R-N.Y., in June.
"Over the years, many civilian federal employees have given their lives while serving their country, at home and abroad," Issa said in a statement Tuesday. "Presenting the flag is a symbol of a grateful nation's appreciation for the sacrifice of those who have lost their lives in the line of duty and the loved ones they leave behind."