Will digital working time recording be mandatory in Germany in 2025? Employers must act now!

What is the current situation regarding time tracking and specifically electronic time tracking? Is it mandatory or not? Who has to track their hours and how?

The European Court of Justice (ECJ) put employers under pressure with a ruling of May 14, 2019, the so-called “Stechuhr ruling” (C-55/18): systematic time tracking is required. According to the ruling, member states would have to oblige their employers to set up a time tracking system that meets the following three criteria:

• objective
• reliable
• accessible

The ruling was intended to implement the requirements of the EU Working Time Directive, which sets out the maximum weekly working hours and daily rest periods. Under the German Working Hours Act, only overtime and Sunday work had to be documented, not the total working hours. Electronic recording was not previously required. The classic time clock or manually filling out an attendance sheet was sufficient.

What would it mean if the BMAS draft law were implemented in exactly the form in which it has currently been presented? We clarify the most frequently asked questions about the draft bill.

How long must the timesheets be kept?

As a matter of principle, the electronically recorded timesheets must be archived for at least two years. Employees should be given the right to receive a copy of the record upon request.

What are the penalties?

In the future, violations of the duty to keep and retain records as well as the duty to provide and surrender information will be punishable as administrative offenses with a fine of up to 30,000 euros.

Does every employee have to record working time electronically himself?

No. As already noted in the BAG ruling, the obligation to record working time should be delegable. The recording can thus be carried out by the employer, by employees or their supervisors.

Is trust-based working time still possible?

Yes. Furthermore, it should be possible to agree trust-based working time on condition that employees fulfill their work obligations and that all occupational health and safety requirements are taken into account.  The term "trust-based working time" is usually understood to mean a flexible working time model in which employees can decide on their own responsibility when to start working and when to stop working within the contractually defined working time.

In this case, the employer relies on the employees conscientiously fulfilling their contractual work duties. Formal documentation of working time does not stand in the way of such an agreement. Employers are obliged to record the daily working time and may delegate this obligation to the employees.

Are there any exceptions to the electronic form?

Exemptions from the electronic form are provided for employers with ten or fewer employees and domestic workers in private households. Foreign employers who do not have a location in Germany and who send a maximum of ten employees to Germany are also exempt from the obligation to record working time electronically.

Is there a transition period?

Yes. There are transition periods in the draft for the introduction of electric working time recording:

• One year for all employers
• Two years for employers with fewer than 250 employees
• Five years for employers with less than 50 employees

However, working time recording as such must already be carried out for all employees. The transition periods only apply to the electronic form of recording.

Are there exceptions to the general obligation to record working time?

In the case of employees whose activities do not permit the measurement of working time or whose working time cannot be firmly defined in advance, the draft bill provides for exceptions under collective agreements. According to Article 17(1) of the Working Time Directive (Directive 2003/88/EC of the European Parliament and of the Council) and Section 18 of the Working Time Act (ArbZG), these are:

• Chief physicians and executive employees within the meaning of Section 5 (3) of the Works Council Constitution Act (Betriebsvervassungsgesetz - BetrVG)
• Heads of public offices, their representatives and employees in public service who are authorized to make independent decisions in personnel matters
• Employees who live in a domestic community with persons entrusted to their care and who educate, care for or look after them on their own responsibility
• Employees in the liturgical area of churches and religious communities

​​​Does the obligation to record working hours electronically also apply to young people?

Persons under the age of 18 are not exempt from the obligation. A corresponding provision is to be added to the Youth Employment Protection Act (JArbSchG).

In April 2023, the Federal Ministry of Labor (BMAS) passed the draft law on to associations without involving the other ministries in the interdepartmental coordination. The aim is apparently to reduce the pressure of time and expectation for the time being. The intention is to give the employers' associations and trade unions the opportunity to discuss the issue in peace. A revised draft law should then be presented at the end of 2023 or the beginning of 2024 as planned. Further consultations were held within the federal government after the draft bill amending the Working Hours Act. However, no agreement has yet been reached with the social partners. Therefore, the legal implementation of electronic time tracking has not yet been completed and it is quite possible that changes will be made to the current plans before the law comes into force.

The tightening of the previously applicable provisions and the requirement for digital recording of working time primarily serve the goal of ensuring transparency and a uniform structure of working time records. This should facilitate controls by customs and minimize the risk of manipulation during recording.

At the same time, those responsible hope that digitization will reduce bureaucracy and the workload for the companies concerned. Thanks to the tightening of the documentation obligation, employees are to gain certainty that the agreed break is granted, the working hours are adhered to, and they are paid accordingly. Working time recording should therefore serve to protect employees from external exploitation and also from self-exploitation.

Four specific requirements for a digital time recording system are derived directly from this:

Derzeit sind bundesweit rund 1,85 Millionen Betriebe von den Dokumentationspflichten betroffen. Laut Forschungsbericht 563 zur vom Bundesministerium für Arbeit und Soziales (BMAS) in Auftrag gegebenen Studie hatten zum Jahresende 2020 noch 1,5 Millionen der betroffenen Betriebe keine elektronische Zeiterfassung eingeführt. Grund dafür sind natürlich gerade in kleineren Betrieben die damit verbundenen Kosten.

Günstige und im Alltag praktikable Lösungen sind rar. Ein physisches Zeiterfassungsterminal oder einzelne digitale Stechuhr/Stempeluhr kommen in kaum einer der betroffenen Branchen infrage. Homeoffice, flexibles und mobiles Arbeiten sowie Vertrauensarbeitszeit sind längst weit verbreitet und dürfen sicher nicht für ein starres System geopfert werden.

Vor allem das Baugewerbe kämpft gegen eine digitale Arbeitszeiterfassung an. Baubetriebe stehen ebenso wie zahlreiche andere Branchen mit vorwiegend im Außendienst beschäftigten Mitarbeitern vor der Herausforderung, dass sie jeden einzelnen Beschäftigten auf Baustellen und auf Montage mit einer Art robustem mobilem Gerät zur digitalen Zeiterfassung ausstatten müssten.

Das Kernargument, administrativen Aufwand mithilfe der digitalen Arbeitszeiterfassung zu reduzieren, sehen Kritiker nicht, beispielsweise der Interessenverband Deutscher Zeitarbeitsunternehmen. Sie fürchten hingegen einen erhöhten administrativen und bürokratischen Aufwand, sobald es zu Fehlbuchungen und damit verbundenen notwendigen Korrekturen gebuchter Stunden kommt.

Aus der Kritik leiten sich fünf weitere Anforderungen an ein System für die digitale Arbeitszeiterfassung ab:

From the requirements of the ECJ ruling and the criticism of the draft law, we have derived a total of 9 requirements for a system for digital working time recording above. Projektron BCS fully meets these requirements with its module for time recording and the associated licenses. The comprehensive time recording solution is DSGVO-compliant, web-based (can also be used offline*) and configurable to your individual needs and the requirements of your company, regardless of the industry.

I would like to learn more about Projektron BCS!

ONTEC AG, an ISO 27001-certified IT company based in Vienna, has been successfully using Projektron BCS since 2015 to map its time tracking, vacation management and working time accounts. With more than 20 years of experience in digitizing business-critical processes and around 100 employees at various locations, the introduction of a powerful and flexible software solution was crucial for the increasing complexity of their projects.

In the success story, Manfred Nowotny provides detailed insights into the introduction and use of Projektron BCS at ONTEC AG.

Read the ONTEC AG success story

The question "From when is the recording of working hours mandatory?" has been answered unambiguously and unequivocally at the latest since the BAG ruling in 2022: Immediately! Since the latest draft bill of the BMAS on the amendment of the Working Time Act, it is clear: Electronic time recording will soon be indispensable. Although there are transitional periods for small and medium-sized companies, get started right away! If you have not yet introduced a time recording and documentation system, you should start looking for a suitable solution now.

More and more providers of digital time recording systems have been positioning themselves to market their solutions since the ECJ ruling. The offerings range from time clocks for digital clocking in and clocking out, to time recording terminals for recording hours worked, to supposedly industry-specific solutions, for example for the skilled trades. Make sure that the system of your choice not only meets the current legal requirements, but also those that are expected in the near future.

This article has formulated nine central requirements that you should definitely take into account. With Projektron BCS, you integrate a time recording system that meets your individual operational requirements, the currently applicable regulations and the regulations to be expected and with which, in addition to pure attendance recording, you also operate project time recording, directly bill recorded times and manage vacation and various working time models.

As a medium-sized employer and an experienced expert in time recording software, I would like to address a few important points regarding the new draft bill for mandatory electronic working time recording, which I would like to be seen as food for thought and a call for discussion:

1. trust-based working time and results orientation

Up to now, trust-based working time has not only been used in cases where the employer trusted that the employee would work the required number of hours. It was also applied in situations where remuneration was based on results and unrecorded working hours, regardless of whether these results were achieved through undertime or overtime. With the new requirements, claims will now arise against one of the contracting parties if the requirements are not met. Alternatively, companies could fail to record time correctly in order to comply with the requirements.

2 Difficulties with verification

Determining whether more than ten employees work for foreign employers can be problematic, especially if they work for different clients. Monitoring and enforcing this rule could pose challenges.

3. exemption for the public sector

It is questionable why an exemption from the obligation to record working time electronically should only be granted in the public sector. This exemption should also be considered for other sectors, especially if they have similar autonomous decision-making powers in personnel matters.

4. reduction of bureaucracy through digitalization

Those responsible argue that the introduction of electronic working time recording would promote the reduction of bureaucracy through digitalization and reduce the workload for affected companies. This argument seems downright absurd in a city like Berlin, where there is still room for improvement in the digitalization of public offices and long waiting times for appointments.

5. protection against self-exploitation

The recording of working hours is presented as a protective mechanism against the self-exploitation of employees. It is well known that too much protection is not only at the expense of entrepreneurial freedom, but above all at the expense of individual freedom. It is important to bear in mind that innovations often arise outside of standardized working time models.

6. retention periods too short

The envisaged period of 24 months for the destruction of recorded working time data could often be too short in the context of project management. Once a project has been completed, it should be possible to analyze this data in order to explain unexpected additional expenses. There is a risk that existing booking specifications in projects could be overwritten by a general rule, which could lead to problems. A more differentiated approach should be considered here in the context of detailed project time recording.