Germany is preparing to tighten its sick leave regulations as Chancellor Friedrich Merz’s government moves ahead with a broad package of economic and labour reforms.
Under the proposed changes, employees may be required to submit a doctor’s medical certificate from the very first day of sick leave. At present, many workers are allowed to simply inform their employer about their illness without immediately providing medical proof. The government now plans to change that system.
Sick leave reform part of a 34-point economic package
The proposed sick leave changes are included in the government’s 34-point economic reform package, which also covers pension reforms, tax changes, labour law amendments and measures aimed at reducing bureaucratic delays.
According to the government, the reforms are intended to boost economic growth, create more employment opportunities, strengthen the competitiveness of businesses and improve the country’s social security system.
Labour rules could become more flexible
The government is also planning to introduce greater flexibility in employment regulations.
Under the proposal, companies will be allowed to hire new employees on fixed-term contracts of up to four years until 2030. Currently, such contracts are subject to stricter limitations.
The reform package also proposes giving companies greater freedom to dismiss higher-paid employees by offering compensation, making the process less restrictive than under existing rules.
What did Chancellor Friedrich Merz say?
Chancellor Friedrich Merz said the ruling coalition has reached an agreement on the economic reform agenda.
He stated that the government aims to secure parliamentary approval for the key provisions of the 34-point reform package before the end of this year.
According to Merz, the reforms are designed to make businesses more flexible, reduce unnecessary bureaucracy, maintain a strong social welfare system and ease the financial burden on both employees and companies through tax relief.
Proposed changes to tax and pension system
The reform package also includes a proposal to provide €10 billion in income tax relief.
To fund the measure, the government plans to impose higher taxes on individuals earning more than €250,000 annually.
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In addition, the package proposes raising the retirement age beyond the current 67 years as part of broader pension reforms.
Finance Minister and Vice Chancellor Lars Klingbeil said those with the highest incomes should contribute a larger share of taxes to help generate the resources needed for the country’s future development.
First published on: Jul 04, 2026 08:50 AM IST
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