Cross-Border Catch-Up: Germany’s Working Hours Recording Requirements

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Goli Rahimi: Welcome to the Cross-Border Catch-Up, the podcast for global employers who want to stay in the know about cutting-edge employment issues worldwide. My name is Goli Rahimi, and I am here with my colleague, Tatjana Serbina. We are attorneys at Ogletree Deakins, and today we will be discussing the requirement in Germany to record employees’ working hours.
Now, Tatjana, hello. I understand that this requirement is not really unique to Germany, but rather applicable to all of the European Union through the working time directive, correct?

Tatjana Serbina: That’s right, Goli. And what’s interesting is that the working time directive itself does not explicitly include any time recording or record keeping obligations, but rather requires EU member states, including Germany, to take necessary measures to ensure certain employee wage and hour rights are protected, such as rest breaks, annual leave, limits on working hours and so forth. What brought the working time recording obligation into the spotlight was a decision of the European Court of Justice in 2019 that stated that all EU member states must require employers to establish an objective system for recording working hours to ensure compliance with the working time directive.

Goli Rahimi: And so how did Germany specifically react to this decision by the European Court of Justice?

Tatjana Serbina: In Germany, this decision was noted with interest, but the general opinion was that such an obligation to record working time was not yet part of German national law. The only explicit obligation that had been included in German law until then was the obligation to record overtime, which means as soon as an employee worked more than eight hours a day. Apart from that, nothing else. It was assumed that the EU working time directive still had to be transposed into German law with regard to the comprehensive recording obligation, but that this has not yet been done.

Goli Rahimi: Okay. So, I’m hearing you, but I also think that there might be a but coming?

Tatjana Serbina: Correct. So, in 2022, to everyone’s surprise, the German Federal Labor Court, the BAG, as we call it, ruled that already now employers in Germany are legally required to record the employees’ working times, including the start and end times, including overtime, as well as all the breaks. The court referred to the rather general provision of the German Occupational Health and Safety Act. It emphasizes that the aspect of working time is a significant component of the protection of the health and safety of employees. According to the case law of the European Court of Justice, occupational health and safety also includes the establishment of an objective, reliable, and accessible system for the recording of all working hours.

Goli Rahimi: I guess I’m curious, what does this mean in practice? Do all German employers need to have a time clock in place now?

Tatjana Serbina: Luckily, no. The law doesn’t dictate a specific system. It just requires that working hours are recorded objectively and reliably. That can be done digitally with apps or even manually in some cases, as long as the records are accurate and accessible. Working hours should be recorded as soon as possible, ideally on the day the work is performed. And the records must be kept for at least two years.

Goli Rahimi: Now, can the employee themselves self-track their own time?

Tatjana Serbina: The employer can delegate the actual task of tracking time to the employees, but the ultimate obligation is on the company to make sure time is tracked correctly.

Goli Rahimi: I can see how this would play out or maybe be easier to implement when employees are physically in the workplace, but how do you reconcile this obligation with employees who are on flex time or remote work? Because as many of us know these days, a lot of companies have employees that are working on these alternative arrangements.

Tatjana Serbina: That’s indeed one of the biggest challenges. The system has to work for employees at home or on the road. Digital solutions are increasingly popular, apps, online platforms, or integrated HR systems that let employees log hours easily. But in the end, every employer is obliged to track working time, and it can be delegated to every employee, regardless of the fact whether the employee is working remotely or not.

Goli Rahimi: Those of us in the U.S. always know that there’s an employee representative body that can complicate things. So, if there’s a works council, let’s say, at the German entity, how does that change what we’ve talked about?

Tatjana Serbina: It doesn’t change anything, but it adds something on top. So, if a works council has been established, it has a core determination right regarding the design of the system for the recording of the working hours. This means that a works agreement must be concluded with the works council, so between the employer and the works council, which specifies the design of the system, and it’s used by employees.

Goli Rahimi: Now, what about non-compliance? Are there consequences if an employer does not accurately record working time as you’ve explained today?

Tatjana Serbina: For the moment, only in case the employer fails to record overtime, then fines of up to 30,000 euro can be imposed. In all other cases, as of now, the Occupational Health and Safety Act itself does not directly impose fines for failing to record working time. However, if a supervisory authority such as the local health and safety office issues an official order to implement a time recording system and the employer fails to comply with this order, this can be considered an administrative offense and the fine of up to, again, 30,000 euro can be imposed.
What is already relevant at present is that missing or incorrect working time records can lead to disadvantages for employers in labor court disputes. For example, in disputes over overtime or wage claims, because the employers can no longer claim that overtime was not worked if they have no working time records that prove otherwise. And after all, compliance is important for health and safety reasons since the whole point of the law is to protect employees from overwork.

Goli Rahimi: Wonderful. Tatjana, this has been very helpful. Thank you so much. And thank you to everyone for joining us for today’s Cross-Corder Catch-Up. Please follow us to stay in the know about cutting-edge employment issues worldwide.

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