This Act ensures back pay for federal employees, contractors, and service members affected by a government shutdown beginning October 1, 2025, and prohibits agency staffing reductions during such lapses.
Chris Van Hollen
Senator
MD
The True Shutdown Fairness Act ensures that federal employees, contractors, and service members affected by a government funding lapse starting October 1, 2025, receive retroactive back pay for the period they worked without funding. Additionally, the bill prohibits agencies from initiating permanent staffing reductions or furloughs during such a lapse. These provisions are designed to provide financial security and stability to essential government personnel during periods of lapsed appropriations.
The 'True Shutdown Fairness Act' Guarantees Retroactive Pay and Blocks Layoffs During Federal Funding Lapses
This bill, titled the “True Shutdown Fairness Act,” is essentially a legal guarantee that if the government shuts down after October 1, 2025, the people who keep working—or are forced to stop working—will get paid. Specifically, it retroactively appropriates funds for fiscal year 2026 to ensure that all “covered individuals” receive their full standard pay, allowances, and benefits for the entire period of the funding lapse.
Who Gets the Check?
The bill defines “covered individuals” broadly, making sure the safety net catches almost everyone affected by a shutdown. This includes every federal employee, regardless of whether they were classified as “essential” (excepted) or furloughed. Crucially, it also covers contractors who support these employees, active duty military personnel, and reservists who performed service during the lapse. The bill is clear: if you were supposed to get paid during the shutdown period starting October 1, 2025, the agency must find the money to pay you back, and the law treats it as if this provision was in effect since September 30, 2025.
For the federal worker who lives paycheck to paycheck, this is huge. It removes the stress of knowing whether rent or mortgage payments will be missed during a shutdown. For the contractor whose small business relies on federal support, this means their cash flow won't instantly dry up. The money spent on this back pay will eventually be charged against the future appropriations bill that ends the shutdown, meaning the agencies aren't getting new money—they are just mandated to pay up immediately, essentially borrowing against the future funding.
No Layoffs During the Lull
Beyond just ensuring back pay, Section 3 of the Act puts some serious limits on how agencies can manage their staff during a funding lapse. If the money runs out, an agency is explicitly prohibited from using any available funds to propose or carry out a Reduction in Force (RIF) or any similar action designed to permanently cut the number of employees. Think of it as a freeze button on layoffs during the political chaos of a shutdown.
This provision is designed to maintain workforce stability. Agencies can't use the shutdown as cover to push through unpopular staffing cuts. Furthermore, agencies cannot place any employee on administrative leave for more than 10 work days during the entire calendar year of the funding lapse. This prevents agencies from sidelining employees indefinitely during the funding gap. The only exception to the staffing freeze is that agencies can still offer voluntary separation payments—a buyout—if an employee chooses to take it.
In short, this bill tells agencies: you can’t use a lack of funding as an excuse to fire people or keep them on indefinite paid vacation. It ensures that when the government finally reopens, the workforce is still intact and ready to go, removing one of the biggest hidden costs of government shutdowns: the loss of skilled personnel.