German Workers Banned from Taking Sick Leave Without a Doctor's Note in Tough New Reforms

Germany's leader, Chancellor Friedrich Merz, has announced a major set of new rules aimed at fixing the country's struggling economy. The plan was revealed on Thursday and includes big changes to sick leave, taxes, and retirement. Workers will now need a doctor's note from the very first day they call in sick — they can no longer get one over the phone. The government says these tough changes are needed to help Germany compete with other countries around the world.

The reform package includes €10 billion — about $11 billion — in tax cuts each year for people who earn lower wages. The government plans to pay for this mainly by raising the top tax rate for the richest earners from 45% to 47%. Those earning €280,000 or more per year will pay the higher rate. Other parts of the plan include building more affordable housing, fighting benefit fraud, and cutting the number of workers in government offices by 8% through the use of digital technology.

Chancellor Merz said Germany can no longer afford to fall behind other countries because too many workers are absent for long periods. Germany already has some of the shortest working hours in Europe, and Mr Merz has said habits like four-day work weeks and long sick leave are hurting the country. "We know this is a tough decision. But we can no longer afford this competitive disadvantage caused by prolonged absences from work," he said. The old rule allowed workers to get a sick note by calling their doctor on the phone, but that option is now being removed.

Not everyone supports the new rules. Christiane Benner, the leader of Germany's biggest workers' union, IG Metall, welcomed the tax cuts but strongly criticized the new rules on short-term work contracts. She called them an "attack on workers' rights." A doctors' group also warned that requiring notes from the first day of illness would "clog up" health clinics with extra visits. Some business groups, however, praised the changes and said they were long overdue.

Germany's economy has been struggling since the COVID-19 pandemic ended. Higher energy prices caused by the war in Ukraine — and now made worse by conflict in Iran — have hurt German businesses. On top of that, strong competition from China has challenged Germany's car industry and other big export sectors. The government in April lowered its growth forecast for 2026 to just 0.5%, a sign that things are expected to stay difficult for a while.

The reform plan also includes changes to Germany's pension system, which is the program that pays money to people when they retire. A government commission has suggested slowly raising the retirement age, similar to a system used in Sweden. Unions oppose this idea because they say workers in physically demanding jobs should not have to work longer. The government has said parliament will pass the pension reform before the end of the year.

Some experts praised the package as one of the most important reform plans in decades. Marion Muehlberger from Deutsche Bank Research said the government had proven it could agree on big changes and get them done. Economist Carsten Brzeski of ING called it a "substantial package" and said the "reform train has no brakes." However, others warned that the plan does not do enough to control government spending, which could make the tax cuts hard to afford in the long run.

Germany is also facing political pressure at home. Mr Merz's party is currently behind the far-right Alternative for Germany party, known as the AfD, in opinion polls. The AfD could win a state election in the eastern region of Saxony-Anhalt in September — which would be the first time they have ever won a state election. Despite this pressure, Mr Merz says his government is focused on making Germany stronger and more competitive for the future.