Changes To The German Continued Remuneration Act (EFZG) – More Work For Employers With Incapacitated Employees

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Effective 1 January 2023 the German Continued Remuneration Act (Engeltfortzahlungsgesetz – "EFZG") was updated and a new section 5 para. 1a EFZG was introduced significantly impacting the way employees prove incapacity for work.
Germany Employment and HR

Effective 1 January 2023 the German Continued Remuneration Act (Engeltfortzahlungsgesetz – "EFZG") was updated and a new section 5 para. 1a EFZG was introduced significantly impacting the way employees prove incapacity for work.

In its old version, section 5 EFZG stipulated the obligation of all employees to (i) notify their employers of the incapacity for work and its expected duration without undue delay and (ii) submit a certificate of incapacity for work in paper form to their employer not later than on the fourth day of sickness. In case the incapacity for work lasted longer than originally anticipated, employees had an obligation to submit a follow-up certificate (Folgebescheinigung) to the employer. 

The newly introduced section 5 para. 1a EFZG has eliminated the obligation to submit the certificate of incapacity for work to the employer, at least for employees who are members of the statutory health insurance (gesetzliche Krankenversicherung). Those Employees will only be required to have their incapacity for work determined by a medical doctor and to inform their employer accordingly. Once the employee's incapacity for work is determined, the doctor electronically transmits the incapacity for work data to the responsible health insurance company. The health insurance company creates a report for the employer that contains the name of the employee, the beginning and end of the incapacity for work, the date of the medical examination and the classification as an initial or a subsequent illness as well as the indication of whether the incapacity for work results from an occupational illness, an accident at work or another accident. Employers must retrieve the relevant incapacity for work data electronically directly from the responsible health insurance company. 

The elimination of the obligation to submit a sick certificate does not apply to privately insured employees or employees whose incapacity for work has been determined by a doctor who does not participate in the statutory health insurance scheme. It also does not apply to employees whose incapacity for work has been determined by a doctor established abroad. These groups of employees must continue to submit a sick certificate to their employer in paper form.

The elimination of the obligation for employees to submit certificates of incapacity for work will have some administrative and legal consequences for employers. They now have to actively retrieve their employees' incapacity for work certificates from the respective health insurance company, and failure to submit the certificate of incapacity for work will also no longer constitute grounds for warning and terminating an employee for conduct-related reasons. Also, even though section 7 EFZG has not been amended, which allows employers to refuse the provision of benefits to employees failing to submit a sick certificate, it is likely that for employees in the statutory health insurance scheme this section will no longer apply as these employees no longer have a primary obligation to submit their yellow sick note to the employer.

The implementation of the electronic certificate of incapacity for work as such is unlikely to trigger co-determination rights of any works councils as it ultimately only implements binding legal requirements. 

Employees should be informed of the new legal situation, as corresponding provisions in their employment agreements will likely be void and therefore no longer apply. For new hires, it is highly recommended to update standard employment contracts and eliminate any contractual obligations for employees in the statutory health insurance scheme to submit sick notes.

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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