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During the pandemic, former UK prime minister Boris Johnson suggested that Brits should be more like Germans when sick: “We have a habit of going back to work or going to work when we’re not well,” he complained. Angry experts are quick to point out why: the UK’s sick pay policy is poor by international standards while Germany’s is one of the most generous in the world.
A few years ago, the two countries found themselves in an interesting phase: the new Labor government in the UK seeks to increase the generosity of the country’s sick pay policy, while Germany is beginning to worry that its policy is, in fact, too generous by half. .
If you rely on statutory sick pay in the UK, you currently don’t get paid for the first three days you’re unwell (although Labor plans to introduce sick pay from day one). You will then receive a flat £116.75 per week – just 16 per cent of the median weekly earnings for full-time employees. In Germany, you receive 100 percent of your salary from the first day of illness up to six weeks.
Is this a luxury Germany can no longer afford? Its sickness absence rates – already high by international standards – seem to have increased greatlybased on data from health insurance companies. International data from the OECD and the World Health Organization, although limited, suggest that German workers currently take more than 20 sick days per year. (By contrast, the Brits took almost 6 days in 2022, the latest data available for the UK).
There are several explanations for the increase in Germany, including more respiratory diseases and mental health issues after the pandemic (a factor common to other countries) and a poor prognosis . child care sector which means nurseries can close due to staff illness at short notice, with knock-on effects on parents’ ability to work.
The others employers suspect that a change during the pandemic that made it easier to get a sick note from the doctor (you can now get one over the phone) also led to more dropouts. But Nicolas Ziebarth of the ZEW-Leibniz Center for European Economic Research, an expert on sick leave policies, told me that he believes the biggest factor an efficient new system that automatically sends sick notes from doctors to health insurers, instead of relying on paper documents. If that is correct, it suggests that the absences were never recorded before.
Either way, you can see why German employers are unhappy with such a high rate of sickness absence, especially at a time when some fear the country’s entire economic model is in to the threat.
One obvious answer is to cut benefit generosity. In Sweden, for example, employees receive 80 percent of their salary for the first two weeks of illness. The data suggests it can be effective. Ziebarth says that there is a strong correlation between the generosity of the sick pay system in a country and the number of absences per worker.
But there are two dangers. The first is that, by imposing a financial cost of sickness, you can prevent some quitting but you can also induce people to work when they are unwell. This brings its own costs, from slowing the speed of their recovery to spreading infectious diseases to other workers. In the first year of the pandemic, half of all OECD countries promote or expand their sickness payment systems, such as making them payable from day one – a clear acknowledgment that their policies are not enough to encourage people to stay at home if there is pain. This is a big reason why the UK government is now planning to make sick pay from day one.
The “best” policy from an economic point of view, then, would set generosity at a level that minimizes shirking but also minimizes the number of people who work when sick. But there isn’t enough data on who is real and who isn’t sick to know.
There is also the problem of fairness: once you cut sickness benefits below 100 percent, you punish people who are unlucky enough to get sick, and especially those who have a chronic illness. In the UK, I wonder if this is an explanation for the increase in the number of people without working and claim health-related benefits instead: if you’re struggling with a long-term condition and it’s more financially punishing to keep your job because you lose most of your pay every time you get sick to get in, that can be a push to leave work altogether.
What is the right balance between the British and German systems? Unfortunately, there are no simple answers to put together, only changes to consider.
