Germany's Sick Pay Dilemma: Tesla Dangles Cash For Workers To Show Up As Absences Skyrocket

Faced with a surge in staff absences, Germany's employers are reaching for a new trick to get workers to clock in: a cash bonus for not calling in sick. Tesla, headed by CEO Elon Musk, is leading the charge - offering workers at its Berlin plant up to €1,000 (US$1,111) just to show up.

According to Bloomberg, such measures speak to the severity of the workforce crisis engulfing Europe's largest economy.

A combination of increased respiratory infections in the wake of Covid and deteriorating mental health have propelled sickness absences to the highest in Germany’s post-reunification history, impairing economic growth and exacerbating labor shortages, while heaping extra burdens onto businesses and the roughly one-third of workers who consistently show up.

As a result of more frequent infections, sick days have soared to levels not seen since reunification - causing production lines to grind to a halt, forcing businesses to strain under the weight of these unprecedented absences. Some companies even suspect that generous sick-pay benefits and pandemic-era rules allowing employees to call in sick by phone are being exploited by workers who aren’t actually ill.

In Germany, that figure has increased to at least 15 days per employee, and some estimates put the total nearer 20. This is one of highest rates in Europe; if attendance was better, Germany could have avoided a recession last year, economists say.

Volkswagen, meanwhile, is mulling over plant closures and layoffs for the first time, with reports suggesting that around 10% of its production workers are out sick—double the expected rate. The company is losing an estimated €1 billion per year due to these absences. Meanwhile, Tesla's new pilot program, which offers €1,000 bonuses to employees who maintain a 95% attendance rate, is a clear sign of how dire things have become. And they're not alone: Kiel’s transport company KVG and even Mercedes-Benz have dabbled in similar incentives, though with mixed results.

As Bloomberg's Chris Bryant notes, if employees feel forced to show up sick to earn a little extra cash, it could spell disaster for workplace health, while those with chronic conditions who stand no chance of getting a bonus will be left out.

Germany's sick-leave policies are incredibly generous by international standards. Workers are entitled to six weeks of full pay when they call in sick, with costs covered by the employer—a system that costs companies around €70 billion annually. After six weeks, health insurers cover up to 70% of wages for up to 72 weeks. For Americans used to minimal or zero sick leave, this setup might sound like a dream. But with nearly 60% of Germans admitting they’ve called in sick when they could have worked, it’s clear the system isn’t without flaws.

So what’s next for Germany’s sick leave conundrum? The government has promised to review the pandemic-era rules allowing doctors to excuse workers from work over the phone for up to five days. But with a culture so deeply ingrained in protecting workers’ rights, even small changes are likely to face stiff resistance.