German employers are bearing a significant financial burden due to employee sick leave, with calculations showing a cost of nearly 1,000 euros per person annually for time taken off work. Full pay is maintained for up to six weeks of illness, and in 2024, this wage continuation totaled 82 billion euros, according to the Cologne Institute for Economic Research (IW). When considering only those subject to social insurance contributions, the cost rises to 2,300 euros per employee.
This substantial expense has prompted calls for reform from both employers and the federal government, who are now focusing on potential misuse of the system. Chancellor Friedrich Merz recently stated that employees are absent from work due to illness for an average of 14.5 days per year, questioning, “Is that really right, is that really necessary?”
Coalition Agreement Aims to Prevent Abuse
Chancellor Merz clarified that this figure doesn’t even include short-term absences of one or two days, indicating that the overall level of sick leave in German companies is too high. He also expressed doubts about the public sector and noted the government is seeking solutions and reasons for the increase, attributing one cause to the ease of obtaining a doctor’s note by phone.
Health Minister Nina Warken (CDU) echoed these concerns, stating that Germany’s sick leave rate is high in international comparison. She acknowledged that the readily available option of a phone consultation for a sick note “can be misused.” The coalition agreement already stipulates that such misuse must be prevented, and Warken affirmed that current regulations will be reviewed. She emphasized, however, that the goal is not to question legitimate illness or deny individuals their right to sick leave.
Andreas Gassen, Chairman of the National Association of Statutory Health Insurance Physicians (KBV), also voiced support for addressing the issue, stating that phone consultations “invite malingering” and that it’s impossible to reliably assess work incapacity over the phone.
Medical Community Divided on Phone Consultations
However, the medical community is not unified in its stance. Both the Association of Statutory Health Insurance Physicians of Bavaria (KVB) and its Berlin counterpart have stated their intention to maintain the practice of phone consultations, directly contradicting Gassen’s position. The KVB of Bavaria stated that phone consultations are “a proven instrument of modern outpatient care and a sensible supplement to office hours.”
Employers are also advocating for change, with their association calling for the abolition of phone consultations in a new paper. They argue that it’s “too easy for so-called ‘sick leave abusers’” and propose limiting wage continuation to a total of six weeks per year, excluding consideration of any surcharges for increased workload.
Lauterbach Warns Against Overreach
Within the SPD, whose support is needed for any changes to the system, resistance is growing. Former Health Minister Karl Lauterbach (SPD) argued that abolishing phone consultations would be “completely counterproductive” as it would lead to even more crowded doctor’s offices, describing it as a “shikane” (harassment) for patients.
The remote consultation for sick notes was initially introduced in 2020 by the Joint Federal Committee, comprised of health insurance funds, doctors, and hospitals, under Health Minister Jens Spahn (CDU) during the COVID-19 pandemic. Lauterbach extended the regulation indefinitely in 2023. Merz questioned the continued necessity of the practice, asking, “During the Corona period [it was] justified, but still today?”
Andreas Storm, Chairman of the DAK-Gesundheit health insurance fund, welcomed the debate initiated by Merz and proposed a “sick leave summit” with the Chancellor, bringing together employers, unions, doctors, and health insurance representatives.
DAK Insurance Calls for Summit at the Chancellery
DAK reported that its insured members were absent from work for an average of 19.5 calendar days in 2025, remaining at a “high level.” The average sick leave duration was ten days. While respiratory illnesses remain the most common reason for absence, the DAK reported a significant increase of nearly seven percent in absences due to mental health issues, pushing musculoskeletal problems, such as back pain, into third place.
High sick leave rates are costly, impacting not only health insurance funds but also the economy. The Federation of German Employers’ Associations (BDA) reports that expenses for wage continuation in cases of illness have doubled in the past 15 years, now accounting for 1.7 percent of economic output.
The total of over 82 billion euros exceeds all expenditures of the statutory nursing care insurance funds and is almost twice the benefits of unemployment insurance. This sum also roughly corresponds to Germany’s significantly increased defense spending in 2024, including the special fund.
Sick Pay Costs an Additional 20 Billion Euros
The BDA paper, titled “Reducing High Wage Continuation Costs,” confirms Merz and Warken’s international assessment: Germany treats its sick employees more generously than any other country in Europe. The full continuation of pay for 42 calendar days is described as “the most expensive social benefit financed solely by employers.”
Under current regulations, companies pay full salary for up to six weeks, after which the statutory health insurance (GKV) takes over, covering 70 percent of gross salary up to a certain limit for a maximum of 78 weeks per illness.
This sick pay amounts to 20.4 billion euros, representing only a quarter of employer costs. Combined, the total burden exceeds 100 billion euros per year, with an additional 6.3 billion euros spent on maternity pay, which employers also bear alone. This maternity pay is roughly equivalent to the total deficit of the GKV in 2024.
Frequently Asked Questions
What is the current cost of sick leave to German employers?
According to the Cologne Institute for Economic Research, sick leave costs German employers nearly 1,000 euros per employee annually, totaling 82 billion euros in 2024. For those subject to social insurance contributions, the cost is 2,300 euros per head.
What changes are being proposed to address the issue?
Several changes are being discussed, including abolishing the practice of obtaining a doctor’s note by phone, limiting wage continuation to a maximum of six weeks per year, and excluding consideration of workload surcharges when calculating wage continuation payments.
Is there disagreement about these proposed changes?
Yes. While employers and some politicians support stricter rules, the SPD has expressed concerns that abolishing phone consultations would overwhelm doctor’s offices and create unnecessary hardship for patients. Some medical associations also oppose the abolition of phone consultations.
As Germany grapples with rising sick leave costs, what balance can be struck between supporting employee health and managing the economic impact on businesses?
