Germany’s Mandatory Time Tracking: Everything You Need to Know
Need help onboarding international talent?
- The German Federal Labour Court requires employers to track the full working hours of their employees, not just overtime.
- Employers must establish a standardized company procedure for recording employees' total working hours, which they should effectively communicate to all employees.
- Deel has proactively mandated daily electronic time tracking within its platform, which will become mandatory starting March 2024— with a 7-day buffer period— for all employees so companies stay compliant and avoid fines.
The decision by the German Federal Labor Court (Bundesarbeitsgericht, or BAG) to enforce mandatory time-tracking for all employees in Germany has sparked considerable interest and discussion among both workers and employers.
In this article, we’ll dig into the details of the new requirement so you can prepare your time-tracking approach and explain how Deel’s EOR solution has been adapted to make the new legislation straightforward to implement for both German employers and employees.
What is the new mandatory time-tracking requirement in Germany?
The German Working Time Act (Arbeitszeitgesetz, or ArbZG) originally only covered tracking of employees' overtime hours. The Federal Labour Court in Germany clarified the requirement to record employees' full working hours. Since the ruling did not specify how the time can be tracked, the Ministry of Labour and Social Affairs has proposed a draft amendment that clarifies this in the law.
Here’s what you need to know:
- Employees have to submit their working hours for each working day
- Working hours should not exceed 10 hours a day and should capture all breaks and rest periods
- Employees must submit their working hours daily, ideally before the end of the working day and no later than seven days after the day worked
- While employers can delegate working time recording obligations to employees, they are responsible for implementing and overseeing the time recording system
- Companies with a works council need to involve them in decisions regarding setting up a working time recording system, as the council holds participation rights in the matter
- Failure to record working hours as mandated could lead to fines of up to EUR 30,000 and is an administrative offense
- Time records are personal data; therefore, it is crucial to consider employee data protection laws when collecting and storing this information
- Flexible working models, like trust-based or remote work, won’t face significant changes and remain feasible. Having a remote time-tracking system fulfills the new legal requirements
- While the proposals of the Ministry of Labour and Social Affairs to introduce an electronic time tracking system have not been adopted and a new Working Hours Act has not been passed yet, employers are urged not to delay compliance with the recent binding case law on recording
- working hours as it is binding with immediate effect.
How should employers track hours?
Employers must establish a standardized company procedure for recording employees' full working hours, which you should effectively communicate to all employees.
You must record daily hours on the same day and closely monitor the legislative process.
Since the ruling did not specify how to track the time, the Ministry of Labour and Social Affairs has proposed an electronic recording of daily working hours for all employees. However, you can still use alternative non-electronic methods if electronic recording isn't in place.
The term "electronic" encompasses common tools or apps and spreadsheet programs like Excel. Hence, electronic working time recording doesn't exclusively mean automatic tracking; you could still use Excel for your timesheets, for example.
At the employee's request, the employer must share recorded working times and provide copies. You can do this by allowing employees to access these records in the electronic system.
In the case of employer of record (EOR) arrangements, the provision mandates EORs to record the start, end, and duration of the temporary worker's daily working hours no later than the end of the seventh calendar day following the day of work.
German working hours and overtime law recap
The Working Time Act in Germany limits the maximum duration of work.
Generally, working hours should not exceed eight hours per day. In the short term, this may be increased to up to 10 hours per day or 60 hours per week, but only if, within six calendar months, the average daily working hours do not exceed eight hours.
Work hours should include break times of 30 minutes for a workday exceeding six hours and 45 minutes of break for workdays exceeding nine hours.
In terms of overtime, employers and employees should stick to contractually agreed working hours if there are no deviating agreements in place.
Easily track employee hours and remain compliant with Deel
Out of diligent and proactive compliance with these new requirements and in collaboration with the German government, Deel has mandated all German employees managed through the Deel platform to start tracking their daily working hours electronically, with a seven-day buffer. This electronic system minimizes inaccuracies and contributes to compliance with health and safety regulations.
To make this process as easy and uncomplicated as possible, EOR employees can submit their working hours directly on the Deel platform via the new time & attendance section, available from February onwards.
Deel will keep all records securely and in alignment with key data protection principles such as data minimization, storage duration, and internal data transfer requirements.
Sound like an ideal solution for your team? Learn more about Deel’s HR platform for global teams, or book 30 minutes with a product expert to get your questions answered.
Lizette Kuld, Head of People & Culture, Moralis