Germany’s €82B sick leave crisis sparks calls for sweeping labor reforms

A staggering 20.8 sick days per worker drained €134B in lost output. Now, business leaders demand urgent changes—before costs spiral further.

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2026 January 1 . 3:02 PM

1 min read

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Employers Seek to Limit Sick Pay - Germany’s €82B sick leave crisis sparks calls for sweeping labor reforms

German employers grappled with record costs due to staff absences in 2024, with payouts totaling approximately €82 billion. The surge in leaves has sparked calls for major reforms to paid sick leave rules. Rainer Dulger, head of the Confederation of German Employers’ Associations (BDA), is advocating for stricter controls and reduced benefits.

Dulger emphasized the financial strain caused by last year's absences, which also resulted in €134 billion in lost production. On average, each employee took 20.8 sick days. He argued that the current system—where workers receive six weeks of paid leave per disease with no yearly cap—was unsustainable.

His proposals include limiting paid sick leave to six weeks annually. He also suggested stopping premium payments for night, Sunday, and overtime work during absences. Another key change would end phone-issued sick notes, pointing to studies showing that generous sick pay increases minor-illness absenteeism. Dulger further called for stricter checks on work incapacity claims. He wants the Medical Service of the Health Insurance Funds to review cases more frequently and promptly. The debate follows planned 2026 adjustments, such as a daily maximum sick pay of €135.63, though few other groups have publicly weighed in.

The BDA’s reforms aim to cut costs and reduce unnecessary leaves. If implemented, the changes would mark a significant shift in how Germany handles sick leave. Employers currently bear the brunt of rising expenses tied to staff illness and lost productivity.