Health care reform: In the future, "partial incapacity for work" should be possible

The global job market is more dynamic than ever, and the competition for top talent knows no national borders. Highly qualified foreign specialists , international expats, and young professionals are enriching the German labor market in a sustainable way. At the same time, human resources departments and employers face the challenge of navigating the legal framework in Germany effectively. A profound change in German labor and social security law is now casting its shadow. A planned reform by the federal government could fundamentally alter the established principle of sick leave management in companies. In the past, employees on sick leave were usually completely unavailable to work. This rigid dogma will soon be softened. With the recently announced healthcare reform, the legislature plans to introduce so-called partial incapacity for work starting in 2027 .

The prevailing dogma: Incapacity for work as a digital decision

Until now, German labor law has operated on a strict principle: all or nothing. According to established case law on the Continued Payment of Wages Act (EFZG) , an employee is either fully fit for work or 100% incapacitated due to illness. The law did not provide for any legal gray area or an official "partial sick leave" for the regular performance of the owed work. Even if highly educated academics or office-based expats were theoretically capable of performing strategic tasks from home or participating in important meetings despite a minor health impairment, this was legally risky and often undesirable while on sick leave. The planned reform now radically breaks with this principle. In the future, incapacity for work will also be medically certified at 25%, 50%, or 75% of the regular weekly working hours. However, this increased flexibility requires a precise understanding of the legal mechanisms to prevent foreign specialists and HR managers from falling into liability traps.

How partial incapacity for work functions in practice

The determination of partial incapacity for work is made purely medically by the treating physician. However, this does not mean that part-time work in case of illness is a one-sided automatic process. The law stipulates a strict principle of consent: Partial incapacity for work absolutely requires the employee's willingness and the employer 's explicit consent . If a foreign young professional indicates a desire for part-time employment after a medical assessment, a critical period begins for the HR department. From this point, the employer has exactly seven calendar days to assess the suitability of the job. They can object to the partial work arrangement without giving reasons. However, if the company does not respond within this seven-day period, a legal presumption of consent applies. In this case, the job is automatically considered suitable, and the employer's consent is deemed given. For international corporations and HR departments, this means that internal processes in global mobility management must be drastically accelerated and digitized to avoid missing deadlines.

Who benefits from the change? The group of eligible individuals.

The German government is pursuing a core fiscal goal with this reform. The changes are to be enshrined in the Fifth Book of the German Social Code (SGB V) by amending the regulations governing sick pay, in order to significantly reduce the number of sick pay claims and provide financial relief to statutory health insurance funds. This results in a significant limitation of the scope of application: Partial incapacity for work applies exclusively to employees with statutory health insurance. Furthermore, the regulation only applies to illnesses expected to last longer than four weeks. For short-term infections, the standard sick leave policy remains in effect. This model is particularly relevant for protracted illnesses that do not completely impair cognitive function, such as mental health conditions, musculoskeletal disorders, or oncological diseases. Highly qualified academic professionals , primarily engaged in knowledge-based work, will thus have the opportunity to maintain some connection with their employer. Privately insured expats or wealthy foreign executives who are not subject to the SGB V, however, are not typically covered by this new regulation.

The financial implications and the obligation to pay compensation

Remuneration during partial incapacity for work is divided into two phases. Within the standard six-week period of continued payment of wages according to Section 3 of the German Continued Payment of Wages Act (EFZG), nothing changes for the employer. The company remains obligated to pay the employee their full salary, regardless of whether they are working part-time or not. However, things become more complex once the employee reaches the period of receiving sick pay. From the seventh week onward, the employer is only required to pay proportionally to the actual hours worked. The remaining shortfall is compensated by a newly established partial sick pay benefit from the statutory health insurance fund. For example, if a foreign skilled worker is certified as 25 percent incapacitated for work, they are performing 75 percent of their work. Consequently, the employer pays 75 percent of the contractual salary, while the remaining 25 percent is covered by the partial sick pay benefit. This benefit is calculated analogously to regular sick pay according to Section 47 of the German Social Code, Book V (SGB V), and generally amounts to 70 percent of the pro-rata gross salary, capped at a maximum of 90 percent of the net salary.

Strategic tasks for employers and human resources

For employers, the reform entails considerable administrative tasks. Since partial incapacity for work is to take legal precedence over the traditional phased reintegration, the so-called Hamburg Model according to Section 74 of the German Social Code, Book V (SGB V) and Section 44 of the German Social Code, Book IX (SGB IX), companies must fundamentally revise their workplace reintegration management (BEM) processes according to Section 167 Paragraph 2 of the SGB IX. While an employer is not obligated to make any structural or organizational adjustments to the workplace, they must document, taking occupational health and safety into account, whether part-time employment is feasible within the company. Payroll departments, in particular, face a significant increase in workload, as salaries must be flexibly allocated monthly between wages and wage replacement benefits. Furthermore, no employer may unilaterally order partial incapacity for work or exert pressure on sick employees; the principle of voluntariness is paramount.

Conclusion

The planned introduction of partial incapacity for work in 2027 represents a paradigm shift in German corporate immigration and HR practice. For highly qualified foreign professionals, it offers a way to remain in the workforce in a supportive and self-determined manner during extended periods of illness. For employers, it enables them to retain valuable expertise within their companies. Since the legislation is still in the legislative process in May 2026 and details need to be specified through guidelines from the Federal Joint Committee (G-BA), early strategic preparation is recommended. As an experienced law firm specializing in visa and employment law, we would be pleased to assist you in ensuring your global mobility processes are legally compliant and prepared for the upcoming reforms.