Germany to Require Doctor’s Note From Day One of Sick Leave in Major Reform Push

Germany’s federal government has unveiled a sweeping reform package aimed at reining in the soaring cost of paid sick leave, a burden that hit employers with €75.5 billion in 2025 — a 4.9 percent increase from the previous year. The centerpiece of the plan, set for July 2026, is a return to mandatory medical certificates starting on the first day of illness, effectively scrapping the pandemic-era option of phone-based sick notes.

The package, officially titled “A Program for Recovery and Employment,” also targets labor market flexibility. It extends the maximum duration of fixed-term contracts without a specific reason to 48 months, with up to six renewals. For high earners — those with annual incomes above €177,450 — the government plans to simplify contract terminations by allowing employers to offer a severance package in lieu of full dismissal protection.

On the compensation front, starting in 2027, tax-free bonuses for work on Sundays and public holidays will rise to a maximum hourly rate of €75.

Germany’s overall social budget reached €1.431 trillion in 2025, a 5.7 percent jump, pushing the social expenditure ratio to 32 percent of gross domestic product. The Institute of the German Economy had previously flagged that sick-pay costs had climbed by roughly €10 billion over three years, fueling calls for a waiting day or a cap on the six-week payment period — ideas that now appear to have been sidelined in favor of the certificate requirement.

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Health insurance data from the first half of 2026 paints a mixed picture. After a severe flu wave in 2025, respiratory-related absences dropped sharply. In Thuringia, the DAK health fund recorded an average of 2.01 sick days due to respiratory infections, down from 2.6 days in 2025. Both Barmer and Techniker Krankenkasse (TK) reported similar declines. Yet overall absenteeism remains high: TK logged a 5.7 percent sickness rate, while Barmer reported 6.3 percent.

Mental health conditions continue to drive long-term absences, averaging 31.5 days per sick note. Analysts from the company health insurance funds stress that it is the prolonged and severe cases — not minor episodes — that are inflating costs.

Court rulings are meanwhile tightening the legal framework around sick leave. The Regional Labor Court in Hamm upheld the dismissal of an employee who threatened to call in sick after a vacation request was denied, calling it a serious breach of duty. In a separate case, the Social Court of Baden-Württemberg clarified that current law does not recognize partial incapacity for work: an employee performing full hours is not considered unfit, even if health issues prevent them from handling night or on-call shifts.

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The legislature plans to introduce a graded partial-incapacity model in 2027, broken into 25-percent increments.

Bureaucratic delays remain a persistent headache. Auditors and business associations report that some federal states are processing only a small fraction of reimbursement claims for lost earnings, citing high case volumes and red tape. That logjam is likely to keep pressure on policymakers as the reform debate continues.

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