Introduction of partial incapacity for work from 2027

Background

On 10 July 2026, the German Bundestag passed the Statutory Health Insurance Contribution Rate Stabilisation Act, a reform package designed to stabilise the long-term financing of statutory health insurance. Part of this package is a provision of particular practical relevance under employment law: From 2027, employees covered by statutory health insurance will no longer be classified solely as either fully fit for work or unfit for work, but will also be recognised as partially unfit for work. Depending on a doctor’s assessment, they will still be able to perform 25, 50 or 75 per cent of their normal workload whilst on sick leave. The aim is to reduce sickness-related absences and make return-to-work processes more flexible.

However, partial incapacity for work is not a general measure applicable to every short-term illness. It is only to be considered in cases of non-minor illnesses where incapacity for work is expected to last for more than four weeks. Furthermore, a return to work on a part-time basis requires the consent of the employee, the employer and the treating doctor.

Consequences for employers

For employers, partial incapacity for work presents both an opportunity and a challenge. It can help to reintegrate key staff members into the workplace sooner and in a more controlled manner, reduce downtime and maintain contact with the workplace, particularly in the case of prolonged mental health or musculoskeletal conditions.

However, the price of this increased flexibility is significantly greater organisational complexity. Employers must assess and state, within seven calendar days of being notified of a request for partial incapacity for work, whether the specific job is suitable for partial work. If they fail to respond in time, consent is deemed to have been given. It is precisely this short deadline that is likely to prove a sticking point in practice: companies will need robust approval processes to avoid inadvertently slipping into situations where consent is deemed to have been given without proper assessment.

Admittedly, employees are not entitled to have a workplace set up or adapted; nor is there any provision for an explicit obligation on the employer to state reasons. However, a refusal is not entirely risk-free. As the principle of equal treatment under employment law continues to apply, employers may nevertheless have to explain, in the event of a dispute, why part-time work or workplace adaptation was not possible in that particular case.

Practical recommendation

Even though the implementing guidelines for determining and organising partial incapacity for work are not due to be issued until six months after the Act is promulgated, employers should not wait. In future, the seven-day deadline will leave little scope for assessing on a case-by-case basis whether and how a job can be performed on a part-time basis. It therefore makes sense to establish a standardised decision-making process before the planned entry into force in 2027 and to identify potentially suitable roles in advance.

This is not merely a question of whether a role can be performed on a part-time basis from a medical and organisational perspective. Employers should also consider related issues at an early stage: time recording, payroll, variable remuneration, holiday entitlement calculations, special payments, as well as existing works agreements and contract templates must be reviewed for compatibility with the new regulations. Otherwise, there is a risk of regulatory gaps arising precisely where swift decisions are required.

In addition, it is advisable to draw up company-wide guidelines setting out clear criteria for when partial incapacity for work is generally applicable and when it is not. This provides guidance for HR and managers whilst reducing the risk of complaints regarding equal treatment. Precisely because the law does not specify detailed grounds for refusal or an obligation to state reasons, inconsistent decisions on a case-by-case basis may later be open to challenge.

The bottom line is that partial incapacity for work is a useful but challenging tool. It enables employees to be deployed in line with their remaining capacity and prevents them from being completely sidelined from their jobs during prolonged periods of illness. For employers, however, it means one thing above all: greater pressure to plan. Anyone who has to decide at short notice which tasks can still be carried out safely and effectively, and to what extent, needs well-prepared processes, clear criteria and coordinated interfaces between HR, managers, payroll and health and safety. If properly prepared, the reform can make absenteeism more flexible and improve return-to-work processes. Without preparation, however, it risks becoming an organisational stress test.