German employers faced an estimated €82 billion in costs related to employee sick leave in 2024, according to a study published Thursday by the Institute of the German Economy (IW). This figure represents four times the amount paid out in statutory sick pay and approximately one-quarter of all expenditures by the German statutory health insurance system.
The increase in sickness rates is one contributing factor to this substantial sum, however, a robust labor market and general wage developments also played significant roles. 2024 saw a record number of employed individuals in Germany, leading to increased overall wage payments – and consequently, higher payments during periods of illness. As wages increase across the board, so too do payments made to employees while on sick leave.
According to Jochen Pimpertz, the study’s author and an economist at the IW, German companies generally maintain good health-related working conditions. He suggests that if policymakers aim to alleviate the financial burden on businesses, focusing on reducing non-wage labor costs would be more effective. “This would support the government’s growth initiatives rather than hinder them” Pimpertz stated.
