German Workplaces Fail Mental Health Check: Just 31% Conduct Mandatory Risk Assessments as Burnout Costs Mount

Only 31 percent of German companies carry out legally required psychological risk assessments for their employees, a compliance gap that leaves millions of workers exposed to unchecked stress. The finding comes from an analysis of workplace health data published alongside the DAK-Gesundheitsreport 2025, which identifies mental illness as the leading cause of sick leave in the country, averaging 33 lost days per case.

Stress levels have risen sharply. A separate study by the Techniker Krankenkasse found that 66 percent of Germans now report frequent stress — an increase of 16 percentage points over the past decade. The OECD warned in 2026 that the resulting productivity losses and healthcare costs run into billions of euros annually.

Works councils (Betriebsräte) have a statutory co-determination right in conducting these assessments under the Arbeitsschutzgesetz (Occupational Safety and Health Act). But the low uptake puts them in the spotlight: labour representatives are expected to step up as watchdogs on mental health, even as their own workloads expand due to a flurry of recent court rulings and legislative changes.

Psychological risks are a legal obligation, yet many workplaces still lack proper documentation. A free toolkit provides 41 ready-to-use templates and checklists for risk assessment, covering everything from fire safety to lone working — and the same systematic approach can be applied to mental health hazards. Download the free Risk Assessment Toolkit

Invalid Agreements and Election Pitfalls

A January 27, 2026 ruling by the Federal Labour Court (BAG) underscores how procedural errors can derail entire agreements. The court declared a company pension scheme contract void because the works council had not passed a valid resolution. The chair’s signature alone was insufficient, and the judges ruled that years of application or apparent authority could not retroactively cure the defect.

Spring 2026 works council elections are approaching, placing extra responsibility on election committees. The BAG clarified active voting rights in June 2025: employees who work across multiple sites of the same company may vote at all their locations. A second ruling, dated June 3, 2026, confirmed that German bases of foreign airlines are generally eligible to form works councils.

Wage Justice and Compensation Clarity

Economic research from the University of Trier and FH Bielefeld, published in May 2026, highlights the impact of worker representation. Companies without a works council are three times more likely to pay wages below the statutory minimum. That minimum is set to rise to €13.90 in 2026 and €14.60 in 2027.

On compensation, the BAG ruled on August 28, 2024 that surcharges paid under the lost-earnings principle (Lohnausfallprinzip) are gross amounts but do not qualify for tax exemption under §3b of the Income Tax Act (EStG) because no actual work is performed. Any employer-offered tax equalisation violates the prohibition on favouritism in the Betriebsverfassungsgesetz (Works Constitution Act). In March 2025, the Düsseldorf Regional Labour Court added that no such surcharges accrue for works council duties performed outside regular working hours.

Sick Note Overhaul and Digital Deadlines

A reform package agreed by the coalition committee on July 2, 2026 will require employees to present a medical certificate from the first day of illness. Telephone sick notes are to be abolished, with legislation expected by the end of 2026.

Keeping up with changing workplace regulations means having the right compliance tools in place. The Health & Safety Toolkit bundles risk assessments, checklists and guidance covering key UK requirements — helping you stay ahead of obligations like electronic records and employee wellbeing. Get the free Health & Safety Toolkit

Meanwhile, the transition period for electronic payroll audits (euBP) expires on January 1, 2027. Employers must then hold all wage and social security records exclusively in electronic, auditable form. The shift to digital personnel files is becoming operational standard, and works councils are tasked with overseeing data protection and employee rights during the transformation.

With artificial intelligence co-determination rules also in the pipeline, the demands on works councils are accelerating. In-house seminars and preventive measures are gaining traction as representatives scramble to keep up with technology, health obligations and procedural precision.

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