The law on working time tracking: what measures employers should still take in 2022

1. How did the ECJ ruling come about?

The ruling was preceded by a lawsuit brought by the Spanish trade union Federación de Servicios de Comisiones Obreras (CCOO) against the Spanish arm of Deutsche Bank. The union wanted to make the bank record its employees' working hours in future so that the legally prescribed limits would be observed. Spanish employment law simply did not provide for such a rule. To support its claim, the union invoked the documentation obligation under the EU Charter of Fundamental Rights and the Working Time Directive. The Spanish court then referred the case to the European Court of Justice (Europäischer Gerichtshof, EuGH), the ECJ.

You can find the official press release on the ruling here. In short: the ECJ obliges European member states to introduce systematic time tracking in their companies.

What does the ECJ ruling mean for trust-based working hours and working from home? Are timesheets still allowed? And what rights does the works council or staff council actually have? Our eBook gives you detailed answers to all of these questions.

2. How does the ECJ justify its ruling?

The ECJ stresses that it is a fundamental employee right that maximum working hours are capped and that daily and weekly rest periods are observed. The aim is to protect employees' health. To meet the EU Charter of Fundamental Rights, the ECJ obliges its member states to guarantee that these rights are upheld. Every European employer must record its employees' working hours.

How exactly this directive is put into practice is left to each nation. The recorded working hours must, however, be reliable and objective. At the same time they must be viewable for employers and employees. Only then can breaches on either side be reported to the competent authorities.  

‍

3. When does the time tracking law apply?

The German federal government has not yet transposed the directive into national law. Even so, several German labour courts are already citing the ECJ ruling in their decisions. On 24 September 2020, for example, the Emden Labour Court awarded an employee €20,000 for overtime worked. In its decision the court relied on the ECJ directive. Employers therefore already have to reckon with consequences from the ECJ ruling. With its ruling of 13 September 2022, Germany's highest labour court (BAG) now also refers to the ECJ ruling and thereby assumes an obligation to track working time.

4. How are working hours currently recorded in Germany?

Before the ECJ ruling there was no general obligation to track time in Germany. Under Section 16 of the German Working Hours Act (Arbeitszeitgesetz, ArbZG), overtime and work on Sundays and public holidays still have to be recorded. For employees on the minimum wage, time tracking has also been mandatory since 1 January 2015. All break times and working hours must be documented without gaps. Responsibility for this lies with the employer, even if the actual recording is delegated to employees.

The situation is similar for professional drivers. Whether employed or self-employed – professional drivers must record their working hours. The employer keeps these records for at least two years.

The ECJ ruling extends time tracking to all other occupations and working time models. In other words, this is a general obligation to track time.

5. What does the time tracking law mean for employers?

Because national legislation implementing the ECJ directive is still outstanding, the concrete effects on employers cannot yet be foreseen in full. The ECJ does grant all member states latitude in implementing the directive. It makes clear, however, that employee rights cannot be enforced without a system for measuring working time. It is also still open whether the popular model of trust-based working hours can survive the implementation of the ruling. Employers are therefore not yet taking direct measures. Such measures can be expected in the near future, though – possibly as early as 2022. Given that labour courts are already ruling on the matter, employers who want to be on the safe side should look for a time tracking solution early.

How does the ECJ ruling affect overtime rules?

The basic principle is that the employer must be aware of overtime. Access to the time tracking records of the employees concerned is enough for that. The ECJ ruling makes it easier for employees to claim compensation – including in court. What becomes relevant here is the so-called graduated burden of presentation (abgestufte Darlegungslast). Employees have to show on which days they worked from when until when and what overtime resulted. This is proven with a time log.

Does the law require digital time tracking?

Under the ECJ ruling, time tracking is mandatory for all companies in Europe, but the format is left to the employer. In theory, timesheets filled in by hand are enough.

Digital time tracking, however, saves time and money. In small companies without an HR department, time tracking falls back on the managing director, who is still busy transferring working hours long after the working day has ended. Automated processes avoid this. Employees benefit from online time tracking too. With an app, the hours are already entered at check-in and check-out while others are still looking for a pen.

Works councils have a decisive influence on the form of time tracking ultimately chosen. They have an initiative right when a time tracking system is introduced. That was decided by the LAM Hamm. The works council's right of co-determination therefore does not end with the design, format and administration, but goes beyond that.

6. What benefits does the law bring for employers?

At first glance the ECJ ruling means extra work for employers. Once introduced, however, time tracking comes with major advantages. It is not a nuisance but above all an opportunity for more transparency between employer and employee. Working hours are clearly documented, so overtime can easily be balanced out. A time tracking system creates facts and strengthens trust between both parties. Tracking working time for employees therefore leads to more fairness on both sides.

7. What do time tracking laws look like in the DACH region?

Unlike in Germany, time tracking is nothing new in Austria and Switzerland.

Time tracking in Austria

In Austria …

• … time tracking is mandatory.
• … daily and weekly working hours as well as daily and weekly rest periods are recorded.
• … the rule applies to all businesses, including small businesses with a single employee.
• … employees on flextime, in field service and in remote work may record their own hours.
• … the records must be kept for one year.

The ECJ ruling therefore has no consequences for Austrian law.

Time tracking in Switzerland

Working hours have to be recorded in Switzerland too. Three types are distinguished here.

Systematic working time tracking (standard rule)

Here only the start and the end of working time are recorded.

Simplified working time tracking

If employees can determine at least 25 per cent of their working hours themselves, simplified time tracking can be agreed. Only the total daily working time is recorded.

Waiving working time tracking

Where employees can determine at least 50 per cent of their working time themselves, work very independently and have a gross income of more than CHF 120,000, working time tracking can be waived. Employees have to give their consent in writing. In addition, a collective employment agreement (Gesamtarbeitsvertrag) between the employer and employee organisations must be in place.

8. What solutions are available?

Every company is different, with its own processes and its own requirements for a time tracking system. Modern time tracking systems scale, so they suit companies of every size. As a rule they offer various functions such as project time tracking, project management and invoicing as well as an integration with payroll accounting.

We at clockin offer you various products so that you can map your processes individually. That way you can record all of your employees' working hours. Whether in the office, in the workshop or out on the road.

Our fastest solution

The digital time clock gets you up and running particularly quickly. Just download the clockin app, invite your employees to clockin, hang a tablet on the wall and off you go.

Start a free trial now and let our clockin experts advise you.

9. Conclusion: better to get covered now

Since the Emden ruling it has been clear that the German courts are not waiting for the federal government before enforcing the ECJ directive on working time tracking. As long as there is no uniform law on mandatory working time tracking, the effects on employers are unpredictable. It therefore makes sense for companies to take the safe route and act now to protect themselves against potential legal disputes.

Successfully introducing new time tracking takes time. When the federal government passes a law on working time tracking, all companies will go looking for a digital solution at the same time. Providers of digital time tracking are expecting a real rush, of the kind seen in the GDPR era. Longer support times and waiting times are to be expected. Employers will have to introduce a solution at relatively short notice and under time pressure, which can lead to major complications.

We at clockin recommend that you take the time early so that we can support you in introducing your digital time tracking.