Germany’s Labour Reforms Target Sick Leave, Digital Tracking, and AI as Workplace Rules Tighten

Germany proposes mandatory day-one sick notes, extends fixed-term contracts to 48 months, and mandates digital time tracking by 2026 amid union and doctor pushback.

A controversial proposal in Berlin’s “Programm für Aufschwung und Beschäftigung” (Programme for Recovery and Employment) would require every employee to produce a medical certificate from the very first day of illness — effectively abolishing the pandemic-era phone sick-note system. The move is part of a broader legislative bundle that also eases fixed-term contracts and pushes more companies toward digital time recording.

Nearly half of all patients already present a doctor’s note on their first missed day, according to a survey of more than 500 patients. But doctors’ associations are pushing back, warning that mandatory day-one certificates would overwhelm already strained practices. Trade unions echo the concern, saying the change would pile extra pressure on sick workers.

Extended fixed-term contracts without cause

The same reform package would let employers offer fixed-term contracts without giving a specific reason for up to 48 months — and allow as many as six renewals — effective until the end of 2030. Currently the maximum duration is shorter, and the number of extensions is limited.

Digital time tracking becomes the norm

Since 2022, all employers have been obliged to record total working time — including start, end, breaks and overtime. This follows a 2019 European Court of Justice ruling and a landmark decision by Germany’s Federal Labour Court. The obligation covers home office and mobile work as well. Trust-based working time does not waive the documentation requirement; it only exempts employers from controlling exactly when work is done.

Small businesses with fewer than ten employees may still log hours on paper. A reform planned for 2026 will force larger companies to switch to electronic recording. All time data must be kept for at least two years and comply with the General Data Protection Regulation (GDPR).

Breaks: strict rules, flexible options

Labour law requires a minimum 30-minute break for anyone working more than six hours, and 45 minutes for those exceeding nine hours. Breaks can be split into chunks of at least 15 minutes each. Tougher rules apply to employees under 18: they must stop for 30 minutes after 4.5 hours and for a full 60 minutes after six hours. Breaks are generally unpaid.

In August 2024, the Federal Labour Court clarified that break times must be fixed in advance. Flexible breaks are allowed as long as the worker knows at the start exactly how long the break will last. A mandatory 11-hour rest period must separate the end of one shift from the start of the next.

Smoking breaks: no legal entitlement

Employees have no legal right to extra breaks for smoking. Any such time off is considered a private interruption and is normally unpaid. Legal experts warn that incorrectly recording smoking breaks can lead to allegations of working-time fraud, with consequences ranging from a written warning to dismissal.

AI at work: unions demand new rules

Worker representatives are pressing for new collective agreements as artificial intelligence becomes more common in German workplaces. A final report on generative AI published in 2026 stresses that introducing such technology must be linked to co-determination rights and retraining programmes. The goal, according to the report, is a fair distribution of productivity gains and clear limits on automated behaviour and performance monitoring.