In this article you will learn about the effects of the BMAS draft law, the BAG ruling and the ECJ ruling on working time recording:
April 2023: The draft bill of the Federal Ministry of Labor and Social Affairs
In light of the decisions of the ECJ (judgment of 14.05.2019) and the Federal Labor Court (13.09.2022, Ref. 1 ABR 22/21), the Federal Ministry of Labor and Social Affairs (BMAS) presented a draft amendment to the Working Hours Act in April 2023. In particular, this should regulate the already mandatory recording of working hours in more detail.
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More InformationWhat exactly are employers supposed to document in future according to the government draft?
Section 16 (2) ArbZG-E states: “The employer is obliged to electronically record the start, end and duration of the employee’s daily working time on the day the work is performed.” This means that employers remain responsible for the proper documentation of time recording. Even if they can leave the obligation to record time to the employees, employers must ensure that they are aware of any violations.
Working time must be recorded daily. The daily recording obligation can only be deviated from by collective agreement, company or service agreement, whereby the time must have been recorded after 7 days at the latest.
Will electronic recording become mandatory?
The principle should be electronic time recording. Without making any concrete specifications here, the draft bill makes electronic recording mandatory. This means that standard time recording devices or systems, apps or other electronic tables can be used.
Are there exceptions to the obligation to record time electronically?
There should be an exception for small businesses: Companies with fewer than 10 employees are to be exempt from the obligation to use electronic time recording. The same is to apply to foreign employers without a permanent establishment in Germany if fewer than 10 employees are posted to Germany, and to private households. In addition, exceptions to the electronic form can be agreed in collective agreements, works agreements or service agreements.
So what about trust-based working hours in the future?
The BMAS defines trust-based working hours as flexible working time models in which the start and end of contractually agreed working hours are not fixed, but are left to the employees. This should continue to be possible, although the documentation obligation should remain in place.
Does the time recording obligation apply to all employees without exception?
The draft law only provides for an exception to the documentation obligation to a very limited extent: By collective agreement or on the basis of a collective agreement in a company or service agreement, it should be possible to agree that the obligation to keep records does not apply to employees “for whom the total working time is not measured or cannot be determined in advance or can be determined by the employees themselves due to the special characteristics of the work performed.”
When will the amended recording obligation apply?
In principle, the amended recording obligation is to apply on the first day of the quarter following the announcement. However, to enable companies to switch to electronic time recording, there is to be a transitional period of one year after the law comes into force for the electronic form of time recording. During this transitional period, time recording “in paper form” should still be sufficient. Depending on the size of the company, longer transition periods are also to be provided for: a transition period of 2 years is to be granted for less than 250 employees and 5 years for less than 50 employees.
What happens if employers violate the obligation to keep records?
Fines of up to 30,000 euros may be imposed for breaches of proper documentation
What is a suitable system for recording working hours?
The European Court of Justice (ECJ) already specified in its ruling in 2019 that the recording must be reliable, objective as well as easily accessible. According to the reasoning of the Federal Labor Court, the use of electronic time recording is not mandatory. Documentation in paper form is also expressly possible. However, the system must be audit-proof and practicable for the company and the employees so that the times are actually recorded. The obligation to record time can also be delegated to the employees. It can be assumed that the German legislator will also not aim for narrow specifications in the implementation. However, the use of a modern software solution for digital time recording and absence management significantly streamlines processes through an intuitive recording process and digital integration of all employee groups in all industries. For example, construction workers who book at the terminal on site, sales employees who book in their car via their smartphone app, or commercial employees in their home office who conveniently record their working hours via an employee portal. Ideally, the recorded data is automatically evaluated and transferred directly to the payroll system (such as DATEV) by digital means. This results in less bureaucracy and an elimination of manual administrative processes.Your company does not yet have a time recording system that complies with the BAG ruling?
ZMI offers you flexible solutions for recording working time. We will also find an individual solution for your company:
- Time recording at the stationary terminal,
- at the PC workstation or
- mobile with a variety of end devices
Would you rather call one of our experts?
Call us: +49 9704 60392-100.
September 2022: Federal Labor Court sees mandatory working time recording
In its ruling (1 ABR 22/21) dated September 13, 2022, the Federal Labor Court (BAG) in Erfurt states that employers under Section 3 para. 2 No. 1 ArbSchG are obliged to introduce a system with which the working time worked by employees can be recorded. In doing so, the Federal Labor Court refers to the interpretation of the German Occupational Health and Safety Act (ArbSchG) in conformity with European law and thus to the ECJ ruling on the recording of working hours from May 2019. The full reasons for the BAG’s judgment have now been available since December 2, 2022.
At the same time, flexible working hours and work locations are being implemented across the board in German companies and organizations. This gives rise to new areas of conflict, particularly in the context of the German Working Hours Act (ArbZG). Kathrin Reitner, Partner and Head of Employment Law at Grant Thornton Rechtsanwaltsgesellschaft mbH, and Daniel Vogler, Managing Director of ZMI GmbH, spoke about this area of tension and its impact on HR work in our ZMI #HR Inside Talk on 22.09.2022.
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More InformationZMI #HR Inside Talk on the ruling of the German Federal Labor Court (BAG) on the obligation to record working hours with Kathrin Reitner, Partner and Head of Labor Law at Grant Thornton Rechtsanwaltsgesellschaft mbH and Daniel Vogler, CEO of ZMI GmbH.
What exactly did the Federal Labor Court (BAG) decide on 13.09.2022?
The ruling of the Federal Labor Court on the recording of working hours came as a great surprise, as the original issue here was whether the
Works Council has a right of initiative to introduce a time recording system at employers. In the course of the decision on this question, the BAG – according to the press release available so far – stated that employers must have a system with which employees can record their working hours.
On the basis of which applicable statutory regulations does the Federal Labor Court conclude that the recording of working hours is mandatory?
Up to now, the German Working Hours Act (ArbZG) has only stipulated the obligation to document overtime and work on Sundays and public holidays. Further obligations to record working hours may arise from individual legal standards, such as the Minimum Wage Act or the Act to Combat Clandestine Employment, or from a collective bargaining agreement or a works agreement concluded between the employer and the employee.
The European Court of Justice (ECJ) had already ruled in May 2019 that companies in the EU must create systems in the future with which employees can measure their working time. Whereby the implementation should be left to the national legislator. So far, however, the legislature in Germany has remained inactive and has not transposed the ruling into national law.
The Federal Labor Court (BAG) has now created facts and referred to a norm from the Occupational Health and Safety Act (ArbSchG), which states that employers :inside must provide a suitable organization and the necessary means to comply with occupational health and safety regulations. From this, the BAG deduces that employers are obliged to introduce a system with which employees can record working hours. The BAG bases this on the ECJ ruling from 2019, which specifically means that recording working hours is mandatory.
What will change as a result of the Federal Labor Court’s ruling on time recording?
There are no changes to the working time regulations. The working time regulations were also to be observed and complied with beforehand. However, the Working Hours Act previously only required documentation of overtime and work on Sundays and public holidays. According to the BAG’s reasoning, the new ruling means that the documentation obligation now extends to all working hours.
When will working time recording become mandatory in Germany?
There is already an objective legal obligation to set up an (audit-proof) system to record the beginning and end and thus the duration of the working hours, including overtime, of the employees in the company. Employers should therefore promptly consider how to document employees’ working hours. The interpretation of occupational health and safety regulations in conformity with European law already results in an obligation to record working hours. Employers may also delegate the duty to record time to their employees.
Does the ruling of the Federal Labor Court mean an end to trust-based working time?
There is no final clarity on this issue yet. However, with regard to the ruling of the Federal Labor Court and also the ECJ ruling from 2019, the issue is that working time is controlled. A core element of trust-based working time, on the other hand, is that the working time of employees is not controlled. Strictly speaking, the ruling of the Federal Labor Court therefore contradicts the basic idea of trust-based working time.
Trust-based working time models can provide a great deal of flexibility, but on the other hand they also entail the risk of work overload. Particularly in industries and workplaces that already offer a high degree of flexibility in terms of working hours and location, the use of a digital time tracking tool is a real benefit for employees and employers. After all, the recording of working hours ensures that activities on often very fragmented working days ultimately become transparent and comprehensible for both sides. Trust-based working time and trust-based recording of working time are therefore not mutually exclusive.
Is a handwritten timesheet also a form of time recording or does it necessarily have to be done digitally?
In principle, a handwritten time sheet documenting the beginning and end of working hours and rest breaks is also sufficient. However, this manual method of recording working hours is only attractive at first glance, as it involves massive additional costs – just like recording working hours in Excel.
Do all employees have to record their working hours or are certain groups, such as field staff, exempt?
The case law does not distinguish between employee :inside in the office and field service. In this respect, working hours must also be documented, regardless of the place of work. Recording options adapted to the work situation or the workplace, such as a time recording terminal in the company, an employee portal on their own PC – also in the home office – or a mobile app for smartphone or tablet in the field enable continuous digital working time recording in real time, which fits the individual situation of the employee. Nothing can be inferred from the reasons for the judgment with regard to executive employees. However, there is much to suggest that they will continue to be exempt from the timekeeping requirement.
Can complications arise if only the start and end of work, but no breaks, are actively recorded?
On this issue, it remains to be seen to what extent the legislature will specifically regulate the recording obligation. However, it is already common practice today to deduct the break times that employees have to observe in order to encourage employees to actually observe the rest breaks. The automatic deduction of the minimum break in accordance with the Working Hours Act can be easily stored in software for the digital recording of working hours. Reasons for the Ruling
Free Checklist Digital Time Recording
The ECJ’s ruling on the recording of working hours raises eyebrows
Back in May 2019, the European Court of Justice (ECJ) decided that companies in the EU must record all hours worked by their employees in the future. Although the German legislature has not yet transferred the ruling into national law, it is already clear that the landmark ruling goes beyond the legal situation that has been binding in Germany to date and will change German labor law. In addition, there are initial court decisions based on the ECJ ruling, such as the Emden Labor Court. In this situation, the question regularly arises as to which regulations actually apply and what the ECJ ruling on the recording of working hours means for companies. In the Corona pandemic, this issue is becoming even more critical, particularly due to the topics of short-time work and home office.
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More InformationZMI #HR Inside Talk about Home Office, Mobile Working and the Working Time Act with Sarna Röser, Dr. Laura Krings, Eva Grünbauer, Pascal Kober MdB and Daniel Vogler.
What regulations are in place so far?
Currently, the German Working Hours Act (ArbZG) only stipulates the obligation to document overtime and work on Sundays and public holidays. Further obligations to record working hours may arise from individual legal standards, such as the Minimum Wage Act or the Act to Combat Clandestine Employment, or from a collective bargaining agreement or a works agreement concluded between the employer and the employee. In addition, the works council in companies under § 80 1 No. 1 of the Works Council Constitution Act (BetrVG) that the laws and regulations applicable for the benefit of the employees are implemented. These include, among others, the requirements of the Working Hours Act. However, there has not yet been a comprehensive obligation for companies to record the working hours of their employees.
What will change in the future?
German lawmakers will have to amend the Working Hours Act (ArbZG) accordingly in accordance with the ECJ ruling or pass an additional law requiring employers in the future to record the total working hours of their employees using an objective and reliable system. So far, however, no details are known as to what the concrete legislative design will look like. A regulation is no longer expected before the federal election in the fall of 2021. However, due to the advanced time, the pressure on the legislator to implement the ECJ ruling is increasing.
What are the risks for companies in this situation?
In several court rulings, the Emden Labor Court has already referred to the ECJ ruling on the recording of working hours, arguing that an obligation for German employers to record time can already be derived from this case law. Two of these rulings specifically dealt with overtime worked by employees. The Emden Labor Court came to the conclusion that the ECJ ruling already has an impact on the burden of proof and presentation in overtime litigation in favor of the employee.
Will companies have to deal with additional bureaucracy?
In its ruling, the ECJ merely states that the data must be reliable, objective and easily accessible. It can be assumed that German legislators will also not aim for narrow specifications in their implementation. A modern software solution for digital time recording and absence management streamlines processes through an intuitive recording process and digital integration of all employee groups in all industries. For example, the construction worker who books at the terminal on site, the sales employee who books in her car via her smartphone app, or the commercial employee in the home office who can conveniently record his working hours via an employee portal. Ideally, the recorded data is automatically evaluated and is transferred directly to the payroll accounting system (such as DATEV) by digital means. This results in less bureaucracy and an elimination of manual administrative processes.
Does the ECJ ruling mean the end of so-called trust-based working time?
Trust-based working time and trust-based recording of working time are not mutually exclusive. Especially in industries and workplaces where there is already a high degree of flexibility in terms of working hours and work location, the use of a digital tool for time recording means a real benefit for employees and employers. After all, the recording of working hours ensures that activities on often very fragmented working days ultimately become transparent and comprehensible for both sides.
Note: This blog article does not constitute legal advice and, in particular, cannot replace individual legal advice.
Your company does not yet have a time recording system that complies with the BAG ruling?
To enable you to record working hours in your company simply and easily in accordance with the BAG ruling, you can use the time recording solution from ZMI. We will also find an individual solution for your company:
- Time recording at the stationary terminal,
- at the PC workstation or
- mobile with a variety of end devices
Would you rather call one of our experts?
Call us: +49 9704 60392-100.