In its much-publicized decision of September 13, 2022 (Ref. 1 ABR 22/21), the Federal Labor Court ruled that employers are obliged under Section 3 (2) No. 1 of the Occupational Safety and Health Act to record the start and end of employees' daily working hours. According to the judges of the Federal Labor Court, this obligation follows from an interpretation of the provision of § 3 para. 2 no. 1 ArbSchG under European law. This decision was preceded by a judgment of the European Court of Justice (ECJ) of May 14, 2019 (Case C 44/18), according to which the European Working Time Directive requires employers to record the working hours of their employees. According to the ECJ ruling, the member states are obliged to ensure that every employer sets up an objective, reliable and accessible system for measuring the daily working hours of each employee. The Federal Labor Court has linked to this decision and is now deriving an obligation to record time from the Occupational Safety and Health Act.
What exactly are the requirements of the Federal Labor Court? According to the Federal Labor Court, the employer is obliged to set up a system that records the start and end times and thus the duration of the employees' working hours, including overtime. In contrast to the planned new regulation in Section 16 (2) of the German Working Hours Act (ArbZG) (more on this in a moment), however, this time recording does not necessarily have to be done electronically. So, purely theoretically, "paper and pen" are currently sufficient. According to its decision of September 13, 2022, the Federal Labor Court also explicitly allows the delegation of the recording to employees. However, this does not release the employer from subjecting the accuracy of the employees' records to at least a spot check or plausibility check (see also Prof. Dr. Bayreuther in Arbeitszeiterfassung - Aktueller Stand und offene Fragen, ArbuR 2024, 190 et seq.).
After a delay, the Federal Ministry of Labor and Social Affairs submitted a proposal in April 2023 for the design of the time tracking requirement. Accordingly, the Federal Ministry proposes, among other things, to amend the current regulation in § 16 (2) ArbZG, according to which working hours in excess of 8 hours are to be recorded, and to reword § 16 (2) ArbZG as follows:
"The employer is obliged to electronically record the start, end and duration of the employees' daily working hours on the day the work is performed. The employer must keep a list of the employees who have consented to an extension of their working hours in accordance with § 7, Subsection 7. The employer must keep the records of working hours in accordance with Clauses 1 and 2 for at least two years."
In addition, the following new provisions and new paragraphs should be added to Section 16 of the Working Time Act:
"(3) The recording according to paragraph 2 sentence 1 can be done by the employee or a third party; the employer remains responsible for the proper recording.
(4) If the recording according to paragraph 2 sentence 1 is made by the employee and the employer waives the control of the contractually agreed working hours, he must take appropriate measures to ensure that he becomes aware of violations of the legal provisions regarding the duration and location of working and rest periods.
(5) The employer shall inform the employee, upon request, about the recorded working hours in accordance with subsection 2, first sentence. The employer shall provide the employee, upon request, with a copy of the records.
(6) Each employer is obliged to keep the records required for monitoring compliance with the working time regulations in Germany for the entire duration of the actual employment of the employees within the scope of this law, at least for the duration of the entire work or service, but in total no longer than two years, in German. At the request of the supervisory authority, the documents must also be kept at the place of employment; for construction work, at the construction site."
The plan is therefore to introduce a legal regulation for the electronic recording of the start, end and duration of working hours, whereby the recording can also be carried out by third parties (and thus also by the employee) in accordance with the newly planned Section 16 (3) of the Working Hours Act.
Meanwhile, a new legal regulation has still not been established. In July 2024, in response to a question from the "Die Linke" group, the federal government stated that it is currently not possible to set a timetable for when the law on recording working hours for all employees will come into force.
https://www.bundestag.de/presse/hib/kurzmeldungen-1011608
It is therefore completely unclear whether (and if so, with which regulations) the planned legal regulation will come into force during this legislative period. A comprehensive new legal regulation on time tracking is obviously still a long way off. For the time being, it is limited to a few isolated provisions, such as Section 16 (2) of the Working Hours Protection Act (ArbZG), which requires employers to keep a record of any hours worked by their employees in excess of the maximum number of working hours per workday as set forth in Section 3 (1) of the Occupational Safety and Health Act (ArbSchG). Another provision that is highly relevant in practice is Section 17 (1) (1) of the Minimum Wage Act (MiLoG), which requires employers who 1 SGB IV or in the economic sectors or branches mentioned in § 2a of the Act to Combat Clandestine Employment, is obliged to record the start, end and duration of the daily working hours of these employees no later than the end of the seventh calendar day following the day of work and to keep these records for at least two years from the relevant date for the record.
What does this mean for employers?
What are the legal consequences if employers currently do not record working hours in contravention of the above-mentioned ruling of the Federal Labor Court?
The consequences are currently minor. This is because, for the time being, Section 3 (2) no. 1 ArbSchG has a "limited impact". Violations of this standard (and thus the time recording obligation) are not currently directly subject to a fine. In theory, the supervisory authorities can oblige the employer to set up a time recording system by means of an order under Section 22 (3) ArbSchG. However, if the employer then fails to comply with this order, a fine may be imposed (Sections 25 (1) no. 2 a) ArbSchG). And this is also rejected by notable voices in labor law literature (e.g. Prof. Dr. Bayreuther in Arbeitszeiterfassung - Aktueller Stand und offene Fragen, ArbuR 2024, 190 et seq.: "Because the mere fact that a public-law obligation on the part of the employer to record working hours has not been clearly established could be sufficient grounds for assuming that sanctioning a failure to record working hours would violate Article 103, para. 2 of the German Constitution (GG).
In addition, according to current case law, the absence of time recording does not make it easier for the employee to provide evidence in an overtime lawsuit. If an employee seeks remuneration for overtime worked, they must present detailed information on the days on which they worked or were on standby at the employer's instruction, stating the exact hours from when to when (see, for example, BAG, judgment of May 4, 2022 – 5 AZR 359/21, NZA 2022, 1267 et seq.). The claim also requires that the overtime was ordered, approved or tolerated by the employer, or in any case was necessary to complete the work owed, and that the employee presents this conclusively. The employee therefore bears the so-called burden of presentation and proof, which, as experience shows, leads to considerable difficulties for employees in labor court proceedings.
This would presumably be quite different if the employee were able to present evidence or records from a time recording system in court. In the past, the Federal Labor Court has already ruled that evidence from a time recording system is presumed to be correct (BAG, judgment of June 26, 2019 - 5 AZR 452/18). It is then up to the employer to respond to this in a substantiated manner, stating that and why the recorded working hours should not be correct, which will usually present employers with insurmountable hurdles.
But what if, contrary to the above-cited case law of the Federal Labor Court, the employer does not keep time records in his company? According to a decision of the Federal Labor Court dated May 4, 2022, the employee cannot prove/argue the ordering of overtime in labor court proceedings solely on the basis that the working hours have not been recorded (BAG, judgment dated May 4, 2022 – 5 AZR 474/21). The lack of time tracking (which, in the view of the Federal Labor Court, is required by Sec. 3 (2) no. 1 ArbSchG) does not, therefore, lead to a lessening of the employee's burden of proof in an overtime lawsuit. Conversely, the existence of time tracking would lead to a lessening of the employer's burden of proof in an overtime lawsuit, provided that the existence of overtime is apparent from the time tracking.
This means that the lack of a time tracking system has practically no consequences for employers under the current legal situation. Therefore, it does not currently appear imperative to expand or introduce a complex and costly time tracking system in anticipatory obedience, which would certainly have to be adapted again if the legislator were to take action ( see also Dr. Block and Jan Buschmann, Legal Obligation to Record Working Hours, RFamU 2023, 29). It is at least justifiable to wait for the exact specification of the legislator and then to introduce a time tracking system based on it. Alternatively, it makes sense to issue individual instructions for recording working hours using an Excel spreadsheet on a transitional basis, to check this at random and to remind employees collectively of their obligation to comply with the statutory working and rest periods.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.