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Why German employers will soon have to record staff working hours

Thanks to a landmark court ruling this week, businesses in Germany will soon be required to track the working hours of all of their employees. Here's what employees need to know about the changes.

An employees clocks in at work
An employees clocks in at work. Photo: picture alliance/dpa | Sina Schuldt

What’s happening?

This week, the Federal Labour Court (BAG) declared that employers in Germany should be recording the working hours of all of their employees. The decision dates back to a 2019 ruling by the European Court of Justice (ECJ), which stated that member states should be implementing systems to record how many hours per week employees were working.

Until recently, however, nothing was done in Germany to enforce the new rules. The decision reached by the Federal Labour Court this week is set to change all that.

Why would they want to track people’s working hours?

According to the ECJ, the main reason is to protect employees from excessive working hours and unpaid overtime.

Under a so-called trust-based system, where employees are simply expected to complete the hours in their contract, it can be easier for overtime to go unnoticed and for breaches of labour laws to slip under the radar. 

When working schedules are systematically recorded, the ECJ argues, this is far less likely to happen. 

READ ALSO: ‘Language is a huge barrier’: What it’s like for internationals working in Germany

OK. But what rules are in place right now?

At the moment, companies in Germany aren’t required to keep a record of their employees’ working hours – though there are some exceptions.

For example, under the Minimum Wage Act, businesses are required to track the hours of their employees on minimum wage. In certain sectors such as the construction and catering industries, hours are also recorded to prevent illegal or exploitative working practices. Employers are also expected to make a record when their employees work on Sundays or public holidays or do any overtime (i.e. working more than eight hours a day). 

However, there’s no blanket obligation for employers to keep track of their employees’ working schedules, meaning most tend to rely on the trust-based system. 

Waiter in a German restaurant

A waiter brings two plates of food to a table. Restaurants already track employee hours in Germany. Photo: picture alliance/dpa | Daniel Vogl

Am I going to have to start clocking in at the office, then?

That could be one option, but it’s possible that businesses will try to come up with something a little more hi-tech than that. However, the Working Hours Act isn’t specific about what method businesses should use to record their employees’ rotas, so both handwritten and electronic tracking are an option. 

Based on what some businesses already do, timesheets, Excel tables and apps for time recording are all possible. However, the ECJ’s ruling does stipulate that the system should be both traceable and forgery-proof – so that’s something employers will have to watch out for. 

How will this affect my working life?

According to Gregor Thüsing, professor of labour law at the University of Bonn, the ruling could make a sea change in how employers relate to their employees. While industries like gastronomy have been recording the working hours of their employers for some time, this is now set to be broadened out to the some 45 million employees across Germany, Thüsing told Tagesschau.

Many people are used to the trust-based model, where employees can make independent decisions on their working time. Following BAG’s ruling, this is likely to come to an end. 

Experts predict that two key things are likely to happen at this point: employee rights are likely to be strengthened in some respects, while employers will also have much more oversight of their employees’ working lives. 

According to the Federal Statistics Office, 4.5 million people in Germany worked overtime last year – and a fifth of those did so for no extra pay. BAG hopes that the new time-tracking rule will put an end to this kind of exploitation and the normalisation of excessive working hours.

On the flip side, bosses may be tempted to get much stricter with their employees and exercise much more control over their schedules. 

READ ALSO: Bildungsurlaub: What is Germany’s ‘education holiday’ and how can I use it?

But I work from home. Can I still do that?

It’s unclear at the moment how the ruling will be implemented alongside the shift towards more flexible working arrangements. During the pandemic, working from home became the norm for many office workers, and a large number of businesses have opted to keep remote working in place even after Covid measures were relaxed.

Now, some critics fear that the ruling could spell an end to this kind of popular arrangement since employers will need to ensure their employees aren’t working excessive hours remotely. 

However, Anja Piel, an executive board member of the Confederation of German Trade Unions (DGB), believes the two things have nothing to do with one another. 

“Working time recording must not be equated with presence in one place – for example, the office,” she told Tagesschau.

It’s likely that these questions will need to be ironed out once a more detailed framework is drawn up by the government. 

Woman works on laptop at home

A woman works on a laptop at home. Photo: picture alliance/dpa/CLARK | CLARK

When do employers have to implement the ruling?

This also isn’t clear right now – though BAG has said that there’s no huge rush to implement the change, based on the ECJ ruling.

Germany is also some way off from being able to implement widespread tracking of employees’ hours. For a start, businesses will need much clear guidelines on the systems they’ll need to use and the rules they’ll need to follow before they can begin changing their practices. 

The Labour Ministry also wants to examine the reasoning behind the BAG ruling, which is expected to be published in November. 

READ ALSO: Jobs in Germany: Should foreign workers join a union?

What are people saying?

So far, the ruling has had a slightly mixed receptions from both politicians and lobbyists. 

Unsurprisingly, employers are particularly unhappy about the extra administrative burden they’ll be required to take on.

Steffen Kampeter, Managing Director of the Confederation of German Employers’ Associations (BDA), described the BAG’s decision on the recording of working hours as “hasty and not well thought-out”, adding that the move would harm the German economy.

However, unions have been arguing for some time that trust-based working can disadvantage employees and lead to exploitation – so they’re likely to welcome the move.

Labour Minister Hubertus Heil (SPD) has so far responded cautiously to the ruling. Speaking to Tagesschau, he said it was important to ensure that people were not cheated out of their wages by manipulating working time. However, care must be taken to ensure that – if the ruling requires implementation in legislation – this is done “as unbureaucratically as possible”, he added. 

Member comments

  1. I work from home and am totally fine with trust-based working hours. While I understand the intent for this legislation is to protect exploited workers who are not receiving overtime pay, it should not mean all of us need to track every minute of our days. This strikes me as a typical German response that is overly complicated and will have unintended consequences.

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German employers ‘must give notice of holidays expiring’, court rules

Employers in Germany often set strict deadlines for taking annual leave - but a new court ruling states that these deadlines could be invalid if employees don't inform their workers of the rules.

German employers 'must give notice of holidays expiring', court rules

Whether it’s a heavy workload or prolonged illness, there are plenty of reasons that holiday days can end up going unused. In many cases, they simply expire at the end of the calendar year – but are there some cases in which they shouldn’t expire at all?

According to a new decision by the European Court of Justice (ECJ) – the highest court in the EU – some workers may be entitled to compensation for their “expired” holidays after all.

In a landmark ruling based on a dispute in Germany, the ECJ has stated that deadlines for taking holidays are only valid from the date when the employer tells their employees about the rules. It means that if workers are unaware that they have to use their annual leave within a certain time, these holiday days can still be taken after the supposed deadline has passed.

The latest decision comes on the back of a similar ruling by Germany’s Federal Labour Court in 2019, which obliged employers to remind their workers to take their holiday before it expired.

The Labour Court said that the reminders should be addressed directly to the employee in writing and should inform them explicitly that their holiday days could expire if the employee decided not to take them.

READ ALSO: Why German employers will soon have to record staff working hours

Law firm dispute

In the latest case in question, a tax clerk who worked at a law firm from 1996 to 2017 claimed she was entitled to financial compensation for several days of holiday.

Her contract entitled her to 24 days of annual leave, which she said she was unable to take over a number of years because she had too much work to do.

At the beginning of March 2012, her employer certified that she was entitled to a total of 76 days of remaining leave from 2011 and previous years.

This did not expire on March 31st 2013 as usual because she had not been able to take it “due to the heavy workload in the office”, the ruling explained. 

In the following years, the employee once again did not take the full amount of annual leave she was entitled to. During this time, the employer did not remind her to take her holidays, nor did he indicate that the entitlement to leave could be forfeited if she did not take it.

Financial compensation

After the tax clerk left the firm in July 2017, she received just €3,201.38 for 14 days of leave that hadn’t been taken in 2017. 

According to the employee, at least 101 further days of leave were unaccounted for. In a court complaint, she demanded full compensation for these additional days of unused holiday.

However, her previous employer argued that the time limit for taking the holiday days had expired.

The case was initially heard by Solingen Labour Court and then by Düsseldorf Regional Labour Court. It subsequently ended up before the Federal Labour Court, who asked the ECJ to provide an opinion on whether Germany’s three-year cap on taking annual leave was compatible with European law.

READ ALSO: Bildungsurlaub: What is Germany’s ‘education holiday’ and how can I use it?

The entrance to the European Court of Justice in Luxembourg.

The entrance to the European Court of Justice in Luxembourg. Germany’s three-year cap on untaken leave is compatible with EU law. Photo: picture alliance / dpa | Nicolas Bouvy

According to the ECJ, the time limit isn’t problematic. However, it can only apply from the date that the employee is informed about the rule.

That means that, if workers are unaware that their holiday days can expire, the days can be still be taken after the three-year time limit is up. 

“Indeed, since the employee is to be regarded as the weaker party to the employment contract, the task of ensuring that the right to paid annual leave is actually exercised should not be shifted entirely to the employee,” the judgment from Luxembourg states.

The former law firm employee is now likely to be entitled to a hefty payout from her previous employer. In its own judgement, the Federal Labour Court declared that the complainant was entitled to compensation for 76 days of leave at a rate of €228.64 per day.

This equates to a payout of around €17,400 plus interest.  

READ ALSO: Which public holidays are coming up in Germany?