Coalition agreement 2025: mandatory time tracking is coming – what businesses need to know now

What is in the new coalition agreement? 

The 2025 coalition agreement between the CDU/CSU and the SPD states that the government intends to deal with working time tracking and the corresponding law in this legislative period. The new coalition agreement puts it unmistakably: 

“We will regulate the obligation to record working hours electronically without unnecessary red tape, and will provide appropriate transitional arrangements for small and medium-sized enterprises."

With this, the new federal government does not only confirm the existing case law. It finally announces the concrete law on electronic time tracking as well. In doing so it also addresses the objections that were already raised about the first draft bill on electronic time tracking in 2023: 

• To what extent does the law apply to small and medium-sized businesses? 
• Does time tracking have to be electronic, or are pen and paper legally compliant too? 
• How is the extra effort of introducing a time tracking system compensated? 
• What happens to trust-based working hours? 

We break the individual elements down for you here: 

Trust-based working hours stay possible without time tracking 

One intriguing point in the coalition agreement is this addition:

"Trust-based working hours remain possible without time tracking, in line with the EU Working Time Directive."

The EU rules referred to here mean the 2019 ruling of the European Court of Justice, which obliged all European member states to introduce a law on electronic time tracking. 

At this point we can only speculate about what the implementation might look like. Because the fact is: EU rules require working hours to be recorded, whatever the working time model. So there is room to argue about whether excluding trust-based working hours in a working time tracking act would comply with the ECJ ruling. 

What exactly the government means by this sentence in the coalition agreement will become clear over the next few years. 

Appropriate transitional arrangements for small and medium-sized businesses

One more question of recent years is, however, already answered by the coalition agreement: namely whether the German Working Hours Act will also apply to small and medium-sized businesses.  

In the first draft bill from 2023, businesses with fewer than 10 employees were to be excluded from the law. The reason was the purchase and administration costs of electronic time tracking. Instead, recording working hours with pen and paper was to remain legally compliant in those businesses. 

From the new coalition agreement it can now be inferred, however, that the law on the electronic recording of working hours is meant to apply to small businesses as well – but with “appropriate transitional rules”. 

So it is reasonable to assume that a phased introduction will be allowed, or that a longer transition period is planned, in order to let small and medium-sized businesses introduce a time tracking system without stress. 

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Handling working hours without red tape 

The CDU/CSU and the SPD add the qualifier “without unnecessary red tape” to their promise of a law on electronic time tracking. With it they probably want to address the accusation that an obligation to track time would mean extra bureaucracy. What exactly is meant by it, however, is not spelled out. A solution without red tape can look quite different things: 

• No excessive documentation obligation: there could, for example, be no daily written confirmation by employees. 
• Making use of digitalization: digital systems could keep the effort for employers and employees as low as possible. 
• Consideration for small businesses: smaller businesses in particular could not be forced to introduce complex HR systems. 
• Transitional arrangements could grant additional leeway in time on top of that
• No gapless monitoring: employers could not be expected to monitor every break or every working minute, and time tracking could also be done by the employee themselves. 
• No complicated data protection: the rules should comply with data protection law, but stay practical. 

With the qualifier “without unnecessary red tape” the government probably wants to point out that the aim will be to find a solution that is easy to implement, does not mean extra bureaucracy and avoids excessive additional costs. 

And what does that mean for you in practice? 

The government is creating facts: electronic time tracking will be regulated by law – with a focus on digital, simple and fair solutions. But even if the implementation is meant to happen “without red tape”, that does not mean businesses can keep waiting, because time tracking is already mandatory today.

Whoever acts now saves themselves stress, fines and unnecessary effort later. Small and medium-sized businesses in particular should use the announced transition periods to get set up early – with a solution that simply works and adapts flexibly to day-to-day work – without training, without stress, without project madness.

clockin is made exactly for that: an app that has you up and running in a few minutes – and that keeps your business legally compliant, more transparent and more relaxed along the way.

clockin makes time tracking as straightforward as the legislator wants it to be – and as your team needs it: mobile, intuitive and free of paperwork chaos. That way you are ready for the coming requirements – and working more efficiently at the same time.

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