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This article explains how continued remuneration during sick leave works and what you need to look out for.
What is continued remuneration during sick leave?
Continued remuneration during sick leave is a defined situation that is regulated by law in which an employee is unable to perform their work due to illness, but still receives their salary. The basis for this is the German Continued Remuneration Act (EFZG), which sets a legal minimum standard that can be improved in favor of the employee through individual agreements (employment contract) or collective agreements (collective bargaining or company agreements).
Legal basis
The legal basis for the rights and obligations of employers and employees in connection with a certificate of incapacity for work (AU) can be found in the German Continued Remuneration Act (EFZG):
- Section 3 (1) EFZG governs the eligibility for continued remuneration
- Section 5 EFZG addresses the notification and evidence requirements
- Section 7 EFZG governs the employer's right of refusing the benefit, e.g. if the employee fails to submit the AU
The eAU (electronic certificate of incapacity for work) process is based on Sections 295 (1) SGB V and Section 109 (1) SGB IV (German Social Code).
Requirement to notify and provide evidence
The employee shall immediately notify the employer of their incapacity to work due to illness and of its expected duration (duty of notification). This usually means that the employer must be notified on the first day of the inability to work.
There is no predefined form for this. The notification can thus also be done orally, for example, by phone, via Whatsapp, or email.
The law stipulates a three-day period during which the sick employee must see a doctor, if the illness is expected to last longer than this period. Confirmation of the time off must be submitted by the fourth day of the incapacity to work at the latest. However, the employer may request that the employee submit a medical certificate sooner.
When calculating the period pursuant to Section 5 (1) EFZG, non-working days such as weekends or public holidays are to be included. If the period ends on a non-working day, the certificate only needs to be submitted on the next company working day.
If the sick leave is to be extended, the employer must be informed in time and evidence must be provided.
For employees with statutory health insurance who participate in the eAU process, the duty of notification still applies. However, the obligation to provide proof is partially waived, as the employer independently retrieves the corresponding certificate from the applicable health insurer.
Special case for organ donations
In the case of an organ, tissue, blood or bone marrow donation according Sections 8, 8a TPG (German Transplantation Act), the employee is also entitled to continued remuneration in accordance with Section 3a EFZG for up to six weeks, even though the donator is not sick. The employer may have their expenditure for continued remuneration and any associated social insurance contributions reimbursed in full by the applicable health insurer, regardless of their U1 report. Contrary to an illness-related incapacity to work, in the case of an organ, tissue, blood or bone marrow donation, the employee's entitlement starts at the beginning of their employment. The four-week waiting period does not apply in this case.
The employee shall immediately provide the employer with the following information so that they can assert their right to reimbursement. These include, for example:
- A clear statement that it is an organ, tissue, blood, or bone marrow donation
- Duration of the incapacity to work
- The institution responsible for reimbursement (e.g. the health insurer)
- If known, the file reference
The employer needs to request a copy of the reimbursement form from the organ recipient's health insurer.
Note
With organ, tissue, blood or bone marrow donations, no AAG notification (U1) is submitted to the health insurer in the cost-sharing system.
Eligibility for continued remuneration
Who is eligible?
Territory of application
The Federal Republic of Germany is the area of application of the EFZG. This means that the place of employment must be in Germany. The place of residence or stay and the nationality of the employee or employer is irrelevant. The EFZG regulations generally also apply to assignments abroad.
Personal scope
According to Section 611a BGB (German Civil Code), all employees and trainees are entitled to continued remuneration in the case of sickness. This also includes part-time employees, marginal employees and short-term employees. It is irrelevant whether the employment period is subject to mandatory social security contributions or not. The only prerequisite for this is that there is a contractual employment relationship.
Who is not eligible according to EFZG?
The following groups of people do not count as employees within the meaning of the EFZG:
- Freelancers / self-employed persons
- Home workers, home-based business owners and those treated as such. They are not granted continued remuneration in the case of sickness, but are entitled to a supplement to their salary pursuant to Section 10 EFZG.
- Public servants and soldiers
- Persons in correctional facilities (prisoners)
- Persons working in workshops for people with disabilities or for the blind. An exception is made in the case of an employment contract with provisions for fixed working hours, salary and leave entitlements.
- Youth welfare institutions, vocational training centers or similar institutions, that serve rehabilitation, medical and/or social purposes and where the focus is on the work itself and not on working for remuneration.
- Participants in further vocational training offered by the Federal Employment Agency.
Waiting period
The basic prerequisite for eligibility for continued remuneration is an uninterrupted employment period of four weeks. The start of the period is the first day of employment.
The existing employment relationship is sufficient. Whether the employee actually worked is irrelevant. This means that employees who are sick and unable to work when they start their employment are entitled to the full continued remuneration from the fifth week.
If an employee falls ill during the four-week waiting period, they may, under certain circumstances, receive sickness benefits from the respective health insurer until the end of the waiting period. Statutory health insurance with the right to sick pay is a basic prerequisite for this.
Example
Employees A and B have both been employed in the company since 01.07. and are subject to mandatory social security contributions. Employee A is sick on 10.08. and unable to work. Employee B is sick on 20.07. and unable to work.
Assessment
The waiting period applies to both employees from 01.07. to 28.07. Employee A is only unable to work after the waiting period and therefore has the full entitlement to continued remuneration.
Employee B falls ill during the waiting period. Their entitlement to continued remuneration only starts from 29.07. For the period from 20.07. to 28.07. they are entitled to receive sickness benefits from the health insurer.
If an employee becomes unable to work before they take up their planned employment, they will only be entitled to continued remuneration after a four-week waiting period. The prerequisite is that the incapacity to work occurs after the employment contract was signed.
In this case, the eligibility for sick pay also no longer applies, since the employment that is subject to social insurance contributions only begins at the beginning of the fifth week. See Section 186 (1) SGB V and BSG decision of 4 March 2014, B 1 KR 64/12 R, margin nos. 17 et seqq After the continued payment of remuneration has ended, they may be entitled to sick pay.
Incapacity to work
What is incapacity to work?
The term incapacity to work means that an employee is objectively unable to perform the work agreed in a work contract, or could only perform the work at the risk of their condition deteriorating. The reasons for an incapacity to work can vary, but the cause must always be within the individual.
One of the most common reasons for an incapacity to work is an employee falling ill. However, a clear distinction should be made between the terms "incapacity to work" and "illness".
Incapacity to work due to illness
An illness can be the cause for an incapacity to work. However, being ill does not automatically mean that there is an incapacity to work. It is important that there is a causal link between illness and the employee's ability to perform their contractually agreed work. The cause of the illness itself is irrelevant and need not be related to the employment relationship.
Note
Only the medical staff in charge can decide on an employee's incapacity to work.
An illness-related incapacity to work must be the single cause of the loss of work for the employee to be eligible for continued remuneration.
As a rule: If the employment relationship, that is, the employee's work in return for remuneration from the employer, is suspended for a different reason – for example due to parental leave or a sabbatical – then the main cause for them not working is not an incapacity to work.
The following special cases and constellations must be taken into account:
| Vacation |
If an incapacity to work occurs during paid vacation, periods of the incapacity must not be counted as vacation according Section 9 BUrlG (Federal Vacation Act). In this case, the employer does not pay vacation entitlements, but continued remuneration during sick leave. However, this provision only applies to vacation or educational leave agreed upon by law, collective agreement, or individual contract. |
| Public holidays |
In accordance with Section 2 EFZG, employees are entitled to receive public holiday salaries on public holidays. Section 2 (3) EFZG stipulates that this does not apply to employees who are unexcused from work before or immediately after the public holiday (work stroll). If an employee who would usually be eligible for public holiday pay is sick and unable to work, they must be paid continued remuneration due to incapacity to work. The public holiday does not extend the duration of the continued remuneration. |
| Parental leave | If the employee does not work part-time during their parental leave, they are not eligible for continued remuneration, as the employment is paused. |
| Partial retirement | If an employee gets sick during their leave period, i.e. when they would not have been obliged to work anyway, they do not receive any continued remuneration, but only the salary agreed as part of the partial retirement. |
| Unpaid vacation |
In the case of an incapacity to work during unpaid vacation, there is no entitlement to continued remuneration for that period, as the performance of work is suspended. The only exception to this would be if the agreed unpaid leave is for recovery purposes. In the case of unpaid special leave, the employee is also eligible, provided that leave is taken directly after vacation and the period would be considered as one recovery leave period. |
| Strike |
The entitlement to continued remuneration continues only if an employee who is incapable of working does not take part in a strike. If they do so, their entitlement no longer applies. In the case of a complete shutdown of operations due to a strike, the employee's eligibility for continued remuneration also lapses, even if they don't participate in the strike themselves. However, individual regulations may be applied. |
| Short-time work | In the case of short-time work, the employee is entitled to continued remuneration only for the hours that they would have worked if they were able to work. |
Self-inflicted illness
An employee is only entitled to continued remuneration if they are not responsible for their illness. This occurs when the employee has acted grossly negligently and violated the conduct that would be expected of a reasonable person in their own best interest.
For example:
- Traffic accident due to intoxication
- Grossly disregarding the road rules
- Grossly negligent or intentional violation of accident prevention rules in the company
- Guilty involvement in a physical altercation
- Carrying out a prohibited or particularly dangerous secondary employment
Injuries associated with typical leisure activities and recognized sports do not constitute a self-inflicted incapacity to work, as long as there is no breach of the duty of care and common rules are followed. Likewise, an injury sustained during an extreme sport does not necessarily lead to a loss of entitlement to continued remuneration.
Alcohol, pill or drug addiction are also generally considered as incapacity to work for medical reasons.
During the period of incapacity to work, the employee is required to refrain from doing any action that may delay or prevent their recovery and thus their return to work. Accordingly, the employee would be at fault if they can be shown to have failed to comply.
According to the BAG's (Federal Labor Court) consistent case law, the burden of proof that the employee has culpably caused their incapacity to work usually lies with the employer.
Duration and amount of continued remuneration
General duration of continued remuneration
According to Section 3 (1) EFZG, the employee's entitlement per case of illness is limited to a period of 6 weeks/42 calendar days, unless a more favorable regulation exists, e.g. through a collective agreement. This period is calculated in accordance with Sections 187 et seqq. BGB.
The entitlement ends within the period of the end of the illness-related incapacity to work, that is, the day that the attending physician indicates as the last day of the incapacity to work on the certificate. If the incapacity to work extends beyond the six-week period, the employee's entitlement to continued payment of remuneration ends at the end of that period.
Note
If the employee was still working part-time on the first day of the incapacity to work and thus received wages, the period only starts at the beginning of the next full day.
Example 1: Incapacity to work while at work
The employee's incapacity to work occurs on 08.03.2024 while the work is being performed.
Accordingly, the period for continued remuneration starts on 09.03.2024 and ends on 19.04.2024 at the latest
Example 2: Incapacity to work before start of employment
The employee's incapacity to work occurs before the start of work on 08.03.2024.
Accordingly, the period for continued remuneration begins on 08.03.2024 and ends no later than 18.04.2024.
Addition of an illness
The entitlement of six weeks / 42 calendar days continued remuneration is not extended, if during the illness-related incapacity to work a new illness occurs which in itself causes an incapacity to work.
Example
The employee is unable to work due to a severe flu virus from 02.07. to 20.07.; they did not perform any work on the first day of sick leave.
On 16.07. an additional incapacity to work occurs due to a broken leg; its period is diagnosed to be from 16.07. to 20.08.
Assessment
The continued remuneration is granted for a continuous period of no more than six weeks and is not extended if a second incapacity occurs during the first one. The period ends therefore on 12.08.2024.
Repeated occurrence of incapacity to work
Repeated occurrence of incapacity to work due to different illnesses
The situation is different when two different illnesses occur one after the other that lead to incapacity to work. In this case, a renewed entitlement to incapacity to work arises if, by the end of the first incapacity to work, employment has not yet been resumed, but the employee was able to work for a few hours. This may also be outside of working hours. See BAG decision of 11.10.1966, 2 AZR 464/65, 2 AZR 475/65.
Example
The employee's regular working hours are generally from 8 a.m. to 5 p.m. The employee is sick and unable to work from 02.07. to 10.07. On 10.07. they break a leg at 9 p.m.
Assessment
The first incapacity to work ends when the working hours finish, at 5:00 p.m. on 10.07. Since they only broke their leg at 9 p.m., after the first incapacity period, the second injury could trigger a new entitlement to continued remuneration, as for a few hours they would have been able to work again.
Repeated occurrence of incapacity to work due to the same illness
Note
The employer does not have access to the employee's diagnoses. Only health insurers can calculate these periods based on available diagnoses. The employer may use a "prior illness request" to ask whether the periods are linked. However, they will not receive any information about the type of illness.
If an employee is unable to work several times due to the same illness, a so-called consequential or continuing illness, the duration for continued payment of wages will be limited. An illness is considered to be the same, if the repeat illness is due to the same underlying condition or at least is closely related.
If the same illness leads to repeated incapacity to work, there is a renewed entitlement to continued remuneration for six weeks, if:
- There is a period of at least six weeks between two periods of incapacity to work due to the same illness.
- At least 12 months have passed since the start of the first incapacity to work period due to the same illness.
Example
Repeated incapacity for work of an employee:
▶︎ First illness from 07. to 27.02. (21 calendar days)
▶︎ Second illness from 07.07. to 10.08. (35 calendar days)
▶︎ Third illness from 03. to 21.11.
▶︎ Fourth illness on from 15.03.
The entitlement to continued remuneration is always connected to the employer. Past illness-related incapacities to work may only be considered, if the repeated incapacity occurs during one continuous employment period with the same employer. If the employee changes employers, a new entitlement to continued remuneration accrues after a waiting period of four weeks.
Amount of continued remuneration
In the case of illness-related continued remuneration according Section 4 EFZG, the employee is to be paid the full amount of the salary that they are entitled to for their regular working hours. The basis for the calculation are thus the working hours that the employee would have worked during their period of incapacity. This includes working hours that may be on a Sunday or public holiday.
Salary components that are part of the continued remuneration include, for example:
- Hourly wage, monthly salary
- Benefits in kind
- Extra allowances/premiums for working on Sundays, public holidays or at night
Note
Allowances for Sundays, public holidays or night work that would have been due if the employee had been able to work must continue to be paid, but are fully subject to tax and social security contributions.
Not included are, for example:
- One-time payments, as they are usually paid independent of the work performance
- Overtime pay and overtime premiums
- Reimbursement of expenses if no expenses are incurred due to the incapacity to work (e.g. contamination bonus, hazard bonus)
Entitlements in case of third-party fault
If the incapacity to work is due to a third party, e.g. a traffic accident, the employer must continue to remunerate the employee, but has a right to claim damages from the responsible party.
The entitlement generally amounts to up to the amount of the continued remuneration as well as the employer's share of the social security contributions. The employee is also required to provide their employer with any information that is necessary to enforce the claim.
End of the continued remuneration
What happens after the continued remuneration payment ends?
If the illness extends for longer than a period of six weeks, the responsible health insurer then pays a sickness benefit. This amounts to 70% of the regular gross salary received up to the contribution assessment limit, but to no more than 90% of the last net remuneration. The payment of a sickness benefit including continued remuneration by the employer is limited to 78 weeks within any three-year period.
Note
This rule only applies to employees with statutory or voluntary insurance. Those with private health insurance may receive a daily sickness benefit.
Reports to the health insurer
If the entitlement to continued remuneration during sick leave expires after six weeks, the employer must also send the following notifications electronically to the applicable health insurer:
- DEÜV notification 51: For employees who receive sickness benefits or daily sickness benefits, at the end of continued remuneration.
- DEÜV notification 13: For privately insured employees who are not entitled to daily sickness benefits when working again and after a DEÜV notification 34.
- EEL notification (electronic compensation for reduced income): Must be sent to the applicable health insurer for employees with statutory health insurance so their entitlement for sickness benefit (amount) can be calculated.