The "True Shutdown Fairness Act" aims to ensure that Federal employees and contractors are paid during government shutdowns occurring in fiscal year 2026. It defines "covered employees" to include all agency employees, active duty military, and reservists, and "contract employees" as those whose work is suspended or interrupted by a lapse in appropriations. The bill appropriates necessary sums to agencies to provide standard employee compensation to their covered employees and to make payments to contractors for their contract employees during any period of a lapse in regular appropriations in FY2026. Agencies are required to make these payments on regularly scheduled pay dates. Furthermore, the bill mandates price adjustments for contracts to compensate contractors for reasonable costs incurred due to past or future shutdowns, such as paying furloughed or laid-off employees or restoring paid leave. To protect the workforce, the Act prohibits agencies from initiating reductions in force (RIFs) or similar efforts to permanently reduce staff during a lapse in appropriations. It also restricts placing employees on administrative leave for more than 10 work days in any calendar year during such periods. The legislation clarifies that employees should perform their typical duties to the maximum extent practicable during a shutdown, with compensation provided as if they were working.