Companies in Germany are required to introduce a system to record fully the working time worked by their employees following a decision by the German Federal Labour Court (Bundesarbeitsgericht, BAG) on 13 September 2022.
This decision has taken the German legislator by surprise. The German legislator had only planned to amend the respective law in the course of the current parliamentary term following a ruling by the European Court of Justice in 2019 on the introduction of a working time recording system. The BAG has now ruled that not only must overtime be recorded as already provided for under German law; but according to the BAG's decision the German Occupational Health and Safety Act (Arbeitsschutzgesetz, ArbSchG) already provides that companies of all sizes must fully record all working hours (i.e. start and end of work as well as break times) of their employees.
Important questions on implementation remain open
Companies in Germany which do not yet use a working time recording system will now need to take action. It is, however, still unclear what such a system should look like (as we still await the reasoning for the BAG’s decision). The law itself does not provide any tangible clues in this regard; the BAG believes that general regulations contained in the ArbSchG should be interpreted in such a way that the recording of working time is necessary for reasons of occupational health and safety.
However, it can be assumed that companies will still be able to put the obligation for working time recording on to employees (e.g. via Excel spreadsheet) and it is anticipated that apps and time clocks will increasingly be used. It is crucial that the system for recording working time is objective, reliable and accessible and therefore, the employer's ability to control such records will be imperative. It remains to be seen how this will be handled in practice if trust-based working time (Vertrauensarbeitszeit), which in principle has no recording of working time, can still be agreed upon. Here, the legislator now sees itself obliged to introduce a corresponding regulation, as provided for in the Coalition Agreement (Koalitionsvertrag).
The future obligation to fully record working time is unlikely to meet with a unanimous response from employers. Besides the additional costs, it is likely that the spotlight will be on those companies which require their employees to work beyond the working time limits to comply with the new requirements. For other employers, the obligation to document working hours under the requirements now formulated by the BAG provides easier justification for their need to record working hours when working from home.
- Employers who do not yet have a system for recording the working time of their employees must act in order to comply with the law. Violations do not (yet) automatically result in fines, but administrative orders are possible in individual cases, with the threat of fines of up to EUR 30,000.00 for each violation. In addition, the legislator could still issue a corresponding legal ordinance with the threat of fines in cases of non-compliance.
- A works council established at the employer’s business can now also complain about the lack of time recording in the context of non-compliance with the ArbSchG. Nonetheless, the BAG ruled that a works council cannot enforce the introduction of time recording in court.
- Even with compulsory time recording in the future, the absence of it should not affect the burden of proof in overtime litigation (Überstundenprozess). It is not uncommon for employees to try to sue their employers for overtime and use the lack of a time recording system against their employer if they could not provide detailed evidence of the overtime allegedly worked. Such decisions are made under existing German occupational health and safety law conforming with EU law and not under working time legislation. Accordingly, the BAG is likely to stick to its line that it is incumbent on the employee not only to present and prove the overtime worked, but also the order, toleration or approval by the employer in the case of a dispute.
- Likewise, it is likely to remain difficult for employees who have (allegedly) suffered a “burn-out” due to overtime to hold the employer liable for damages due to a lack of time recording.
- Where employers already require employees to record their working time, they must (continue to) check the time recording on a regular basis. The implementation of this BAG decision will be a challenge especially for employers who currently rely on trust-based working time models. Such models, which is appreciated by both employers and employees, will be considerably restricted (at least technically) due to the now clarified obligation to introduce a working time recording system.
- In practice, employers should focus on the appropriate communication to the workforce to promote acceptance of the new legal requirement to introduce a working time recording system and thus the success of such a system. The obligation to record working time will play a significant role especially when it comes to working from home. In the increasingly flexible world of work, a complete recording of working time is likely to be perceived by quite a few employees in many sectors and companies as inappropriate monitoring. If the introduction of working time recording is, however, communicated appropriately and takes such concerns into account, it can be implemented successfully and legally.