Germany Mandates First-Day Doctor Notes to Curb Corporate Sick Leave

German Chancellor Friedrich Merz on Thursday announced a sweeping overhaul of the country's labor policies, mandating that workers provide a medical certificate on their very first day of illness.

The structural policy eliminates the existing mechanism allowing German workers to obtain sick notes via telephone consultations.

Berlin aims to reverse prolonged workplace absences to restore economic growth amid escalating international competition and a deteriorating domestic economic outlook.

Economic Competitiveness

The chancellor described the current levels of sick leave as unacceptable for businesses operating in Germany.

“We can no longer accept the extraordinarily high levels of sick leave in our companies,” Merz said.

Prolonged workforce absences have created a severe competitive disadvantage for the national economy.

Merz stated that the government can no longer afford the financial drain caused by these widespread staffing shortages.

“We are abolishing sick leave by telephone and introducing the requirement to submit a medical certificate from the very first day of illness,” he said.

“We know this is a tough decision. But we can no longer afford this competitive disadvantage caused by prolonged absences from work.”

Workers claiming illness must now secure official documentation from a doctor immediately upon taking leave.

Targeting Workplace Absences

The adjustment has drawn sharp domestic criticism. Markus Blumenthal-Beier, head of the German Association of General Practitioners, labeled the change "absolutely catastrophic" for its potential to clog the healthcare system.

The enforcement of first-day medical reporting forms part of a broader macroeconomic strategy designed by the conservative-led coalition to optimize public finances.

Broader Structural Package

The regulatory tightening arrives alongside a €10 billion ($11 billion) annual tax relief package targeting lower-income households.

To fund this relief, Berlin will increase the top income tax bracket to 47 percent from 45 percent for individuals earning €280,000 or more.

The government further plans an 8 percent reduction in federal ministry personnel through digitization alongside heightened measures against benefit fraud.

Additionally, a government-appointed commission proposed a Swedish-style pension fund and a gradual increase in the retirement age to stabilize the aging population.

Union leaders criticized the pension adjustments, noting that mandatory employer contributions would increase hiring costs and penalize workers in physically demanding roles.

Macroeconomic Pressures

The domestic landscape remains constrained, with the government slashing its 2026 growth forecast to 0.5 percent and cutting its 2027 projection to 0.9 percent.

Export-reliant industries continue to face pressure from intensifying competition with China and geopolitical disruptions stemming from conflicts involving Ukraine and Iran.

Finance Minister Lars Klingbeil noted that Berlin would implement a tougher strategy against Beijing to shield domestic firms from unfair competition.

While financial analysts at ING and Deutsche Bank welcomed the structural interventions, unions such as IG Metall cautioned that the corresponding expansion of fixed-term contracts threatens worker protections.

Furthermore, Ifo Institute President Clemens Fuest criticized the absence of expenditure consolidation, warning that tax relief is unsustainable without curbing government spending.