The University of Washington has agreed to follow the city’s $15-an-hour wage law and will be boosting pay for employees in January.

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University of Washington workers will be getting a raise after all.

The UW announced Monday that it plans to follow Seattle’s $15-an-hour minimum-wage law, raising student and other employee wages to $13 an hour this January, and to $15 an hour the following year, on Jan. 1, 2017.

Earlier this year, the university had argued that as a state-funded institution, it fell into a gray area of the law. And while it had asked officials in Olympia whether the university was subject to the law, “we decided to go ahead and do this, without direction on the question from Olympia,” said spokesman Norm Arkans.

About 5,500 workers — 3,500 of them students — will get a raise.

Some of the money will come from the service-and-activities fee that students pay to fund programs like student government, health and student publications; at the Seattle campus, that fee is $131 per quarter. In order to make the wage increase pencil out, student leaders analyzed the effects and adjusted their budgets to meet the increased costs, Arkans said. No services will be cut, but there will be some small squeezes to the budget here and there, he said.

In a statement, Interim President Ana Mari Cauce praised the student organizations for “helping to reinforce this direction.”

Most of the money will come from divisions like Housing & Food Services, which pays the salaries of student food-service workers. There’s no immediate plan to increase food prices this year, but prices could go up next year, Arkans said.

Some of the money is also coming from the provost’s budget, a pool of money for discretionary purposes by Interim Provost Jerry Baldasty.

“Bringing our workers to the $15 minimum is something we have been aiming for since the conversation began last year in Seattle,” Cauce said. “It’s the right thing to do, and I’m glad we are positioned to get there.”

Some student leaders have been critical of Cauce for not immediately planning to follow the city’s new law.

The raise will cost the university $3.2 million in 2016, about $2.9 million of that money going to student employees. In 2017, the wage increase will cost $7.9 million overall, with $6.7 million of that going to student employees.

The University of Washington is believed to be the largest employer in the city.