08/25/2023 - Articles

Will digital working time recording be mandatory in Germany in 2024? Employers must act now!

A ruling by the Federal Labor Court (Bundesarbeitsgericht - BAG) in September 2022 makes it unequivocally clear that every employer is obliged to systematically record employees' working hours. A draft bill from the Federal Ministry of Labor and Social Affairs (BMAS) is now to create a concrete legal framework for this. This makes it clear that digital working time recording is almost inevitable. Find out how you can equip yourself and your company with the right time recording system for future requirements and regulations and what you should look out for when selecting software for digital working time recording.

Recording working time: What is the status quo?

The legal framework for electronic working time recording is to be defined in the BMAS reference draft. What is the current status with regard to the recording of working time? Is it mandatory or not? Who must record working time and how must this be done?

ECJ "time clock ruling" 2019

The European Court of Justice (ECJ) put employers under pressure with a ruling of 14.05.2019, the so-called "time clock ruling" (C-55/18): systematic time recording was required. According to the ruling, member states would have to oblige their employers to set up a working time recording system that meets the following three criteria:

  • objective
  • reliable
  • accessible

The ruling was intended to implement rights under the EU Working Time Directive, which sets maximum weekly working hours as well as daily and weekly rest periods. So far, German lawmakers had not yet reacted to this ECJ ruling. According to the German Working Time Act, only overtime and Sunday work had to be documented so far, not the entire working time. Electronic recording has not been mandatory to date. The classic time clock or the manual filling out of an attendance slip were sufficient.

How did the ECJ's ruling come about?

The ruling came in a case from Spain in which the Comisiones Obreras trade union filed a lawsuit against Deutsche Bank Spain. The union argued that Deutsche Bank Spain did not have an objective and reliable method for recording the daily working hours of its employees, which made it difficult to comply with EU working time directives.

Duty to record working hours exists: BAG ruling 2022

On September 13, 2022, Section 3 (2) No. 1 of the German Occupational Health and Safety Act (ArbSchG) was unambiguously interpreted in a ruling by the German Federal Labor Court (Case No. 1 ABR 22/21): Employers are legally obligated to record the working hours of their employees. According to this BAG ruling, the beginning, end and duration of daily working hours should be documented. However, the ruling still did not prescribe a specific form for recording working hours. It also did not specify whether breaks were to be recorded.

Although this basic obligation to record working time was established, its violation usually remained without sanction. This is because the ArbSchG does not provide for a fine. The legislator has since been forced to define the legal framework.

Draft bill of the BMAS 2023: Amendment of the Working Time Act

In order to create such a legal basis and to specify the options for implementing the obligation to record working time, a draft bill (RefE) was issued by the Federal Ministry of Labor and Social Affairs (BMAS) in April 2023 to amend the Working Time Act. This draft prescribes the electronic form of working time recording. This can be done by various means:

  • digital applications (apps)
  • specialized time recording software
  • Spreadsheet programs
  • terminal with digital time recording

However, analog records are to be inadmissible, even if they are subsequently digitized, for example by scanning the classic time sheet.

In addition, the draft bill stipulates that daily working time must in future be recorded on the day the work is performed. This is necessary to ensure objective and reliable documentation. However, this regulation allows for subsequent corrections of incorrect or forgotten records. It is also possible to make collective agreements that allow working time to be recorded at a later point in time. However, this point in time may not be more than seven days after the working day in question.

FAQ on the BMAS draft bill and the obligation to record working hours

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 reference.

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).

Where do we go from here?

The Federal Ministry of Labor (BMAS) passed the draft law on to associations in April 2023 without involving the other ministries for departmental coordination. Apparently, the aim is to ease the pressure of time and expectations for the time being. The intention is to give employers' associations and unions the opportunity to discuss the issue in peace. A revised bill will then possibly be presented at the end of the year or in early 2024. It is therefore entirely possible that changes will be made to the current plans before the law comes into force.

Why digital working time recording?

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:

  1. Recorded data may "not be overwritten, deleted or changed without being identified".
  2. The digital attendance recording system must be available to all employees directly at the place of work at all times.
  3. Each employee must have personal access to the time recording system, to which neither other employees nor employers have access.
  4. The system must archive recorded information for a period of 24 months and then destroy it, if possible automatically.

Criticism of digital working time recording

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:

  1. The operation of the time recording system must be easy and self-explanatory.
  2. The system must be inexpensive to purchase and low-maintenance.
  3. It must be flexible to use, compact, transportable and operable from anywhere, ideally via different end devices.
  4. Use must not fail due to non-existent Internet coverage.
  5. The system must allow corrections to be made by the time recorder, but must also archive a complete history of changes.

System for digital working time recording: Projektron BCS

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.

The Projektron BCS attendance recorder license, which was specially developed for these requirements, offers you a clear and ergonomic booking mask. With the log-in, the start and with a time specification the end of an attendance is automatically specified. After deducting the break or even several breaks, the system calculates the effective working time. In addition, employees with this license gain access to a personal calendar and vacation management. Using the attendance recording function, models such as trust-based working time can also be easily mapped in BCS.

HR managers can store individually definable working time models as the basis for each employee's working time account, so that BCS automatically calculates the overtime worked.

Work and attendance recording can also be accessed easily and offline via any mobile device using the Projektron WebApp. With the app, your employees record their attendance times easily, quickly and flexibly, even without an internet connection*, whether in the office, on the road during field service or on site with customers. Synchronization takes place automatically as soon as an Internet connection is available again.

How sensible it is to implement time recording purely to meet legal requirements remains to be seen. At Projektron, all employees record their times themselves for specific tasks and projects using the time recording module in BCS. However, the sole reason for this is the desire to make strategically sensible future decisions based on data. For example, historical data on specific tasks provides an indication of how much time should be scheduled for such tasks in the future. In addition, the data can be used to determine which projects and tasks will no longer be profitable in the future because they require too much time.

Conclusion: Time to act, but with vision

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.

About the author

Like all other departments at Projektron GmbH, Marketing also uses the digital time recording options in Projektron BCS on a daily basis. Kai Sulkowski is an editor in the marketing department and is always informed about current developments and innovations from the world of project management and work organization.

Commentary on the draft bill to amend the Working Hours Act and possible consequences

Maik Dorl is Managing Director of Projektron GmbH and is currently responsible for more than 110 employees. The project management software, which has been developed since 2001, has always offered the option not only of recording working time, but also of detailed recording, evaluation and billing of expenses for tasks in the course of project work. In his experience, detailed project time recording offers advantages for both companies and employees. However, he is critical of a general obligation to record working hours digitally, as proposed in the current draft bill.

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.

  

Attendance and working time recording digitally. Will this soon be mandatory?

Attendance and working time recording digitally. Will this soon be mandatory?

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