Entgeltfortzahlung (Continued Payment of Wages)
Entgeltfortzahlung im Krankheitsfall is a statutory requirement under the German Continued Remuneration Act (Entgeltfortzahlungsgesetz – EFZG). It dictates that employers must continue to pay an employee’s full salary when they are unable to work due to illness or injury, provided the employee is not at fault for the condition.
Overview: The Six-Week Rule
In Germany, the primary obligation for sick pay lies with the employer, not the state or insurance, for the initial period of an illness.
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Duration: Employers must pay 100% of the gross salary for up to six weeks (42 calendar days) per instance of illness.
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Recurring Illness: If an employee falls ill again with a different diagnosis, the six-week clock usually resets. However, if the illness is the same (a recurring condition), the periods are often added together unless there has been a significant gap of health (usually six months) between absences.
Eligibility and Requirements
Not every absence automatically triggers payment. For a claim to be valid, specific statutory conditions must be met:
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The Four-Week Waiting Period: New employees are only eligible for Entgeltfortzahlung after they have been continuously employed for at least four weeks. If an employee falls sick in the first 28 days, they typically claim sickness benefits directly from their health insurance provider.
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Notification Obligations: The employee must notify the employer immediately (usually before the workday begins).
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Medical Certificate (AU-Bescheinigung): By law, a doctor’s note is required if the illness lasts longer than three days. However, many German employment contracts specify that a certificate must be provided from the very first day of absence.
The Transition to Krankengeld (Sick Pay)
If an illness extends beyond the six-week mark, the employer’s payment obligation ends. At this point, the responsibility shifts to the employee’s Statutory Health Insurance (GKV).
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Krankengeld: The insurance provider pays “Sickness Benefit,” which is typically 70% of the gross salary (but no more than 90% of the net salary).
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Private Insurance: For high earners with private health insurance, the rules differ based on their specific policy, often requiring “Krankentagegeld” insurance to cover this gap.
Cost Considerations: The U1 Reimbursement Scheme
The financial burden of Entgeltfortzahlung can be heavy, particularly for smaller businesses. To mitigate this, Germany operates the Umlageverfahren (U1).
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Mandatory Participation: Companies with fewer than 30 employees (full-time equivalent) must participate in the U1 scheme.
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Reimbursement: These employers pay a small monthly levy into the health insurance fund. In return, the insurance reimburses the employer for a significant portion of the sick pay (usually 40% to 80%, depending on the chosen rate).
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Large Employers: Companies with more than 30 employees generally bear the full cost of the six-week pay period themselves without reimbursement.
Compliance Tips for International HR Teams
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Review Employment Contracts: Clearly define when a medical certificate is required (Day 1 vs. Day 3).
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Digital Sick Notes (eAU): Since 2023, Germany has used electronic sick notes. Employers must actively retrieve these from the health insurance funds rather than waiting for a paper copy from the employee.
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Factor in “Incidental Costs”: When budgeting for German hires, always account for the statistical likelihood of sick leave (averaging 15–20 days per year in many sectors).
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