Introducing time tracking: a step-by-step guide

What is the legal basis for time tracking?

The obligation to record working hours follows from two central decisions: 

1. ECJ ruling 2019

The European Court of Justice ruled that employers are obliged to introduce an objective and reliable system for recording daily working hours, in order to secure compliance with working time rules.

2. Federal Labour Court 2022

The Federal Labour Court (Bundesarbeitsgericht, BAG) made clear that employers have to document their employees' entire working hours, not just overtime.

3. Coalition agreement 2025

The federal government's current coalition agreement states that electronic recording of working hours is to be regulated by law. The requirements are to be implemented without red tape and to include transitional rules for small and medium-sized companies.

So that means: a recording obligation already exists today through case law. With the planned change in the law it is now also to be laid down clearly how this obligation – as a rule electronically – is to be met, including workable deadlines and exceptions.

Step 1: Set goals and clarify what you need

Before you choose any tool or plan any training, you need to know exactly why you are introducing time tracking at all.

Typical goals: 

• Meeting legal requirements
• Creating transparency for employees
• Billing project hours correctly
• Simplifying processes (for payroll accounting, for example) 
• Reducing overtime or spreading it better

The clearer your goal is, the more easily you can explain later why the change makes sense. A common mistake is starting the search for a tool before it is clear what you need.

Step 2: Define your requirements

From your goals you work out which features your solution really needs to have.

Questions that help: 

• Should only working hours be recorded, or project hours and activities too? Perhaps you also want to document further processes.
• Do you need mobile time tracking for teams without a fixed workplace? 
• Is GPS or QR code recording relevant? 
• How important is reporting for managers? 
• Do you already work with other software and need the matching integrations? 
• What about shift planning or shift scheduling? If that is relevant in your business, it can make sense to find a tool that digitalizes both processes.

Many companies overestimate their needs at the start. A lean, easy-to-understand system usually gets you there faster than a complex all-in-one solution.

Step 3: Involve your employees early

The most common reason time tracking fails is that the team was not taken along.

So: 

• Explain openly why time tracking is being introduced
• Communicate the benefit, not control
• Emphasise fairness (overtime, an overview of workload, clear records)
• Answer questions transparently
• Gather feedback before the system goes live

When employees understand that time tracking is to their advantage, it will be easier to put in place.

Step 4: Start a pilot phase

Before you roll time tracking out across the whole business, run a test.

This is what a good pilot phase looks like: 

• A small group (one team, for example) uses the system for 2-4 weeks
• Problems are collected and solved together
• Features, workflows or roles are adjusted
• Feedback feeds straight into the final setup

The advantage: you avoid mistakes in the big rollout and later have internal champions – employees who can support their colleagues with setup and through the first period of getting used to it.

Step 5: Define rules & processes clearly

A tool does not solve everything – only clear rules make time tracking reliable. So settle beforehand: 

• How do people clock in? (app, terminal, QR code)
• What happens when someone forgets to clock in? 
• Who is allowed to correct hours? 
• How are break times handled? 
• What records does payroll accounting need? 

These rules should be written down and communicated.

Step 6: Official rollout & reviewing the results

Once the pilot phase has gone well and all the uncertainties are cleared up, the rollout to the whole team begins. Bear in mind: time tracking is not a one-off project, but a process that develops. Here is what to watch after the start: 

• Is overtime becoming more transparent? 
• Is clocking in working correctly? 
• Is the team using the features fully? 
• Does the software help simplify processes? 

Tips for the rollout: avoiding common mistakes

So that you do not fall into the typical traps, here are the main stumbling blocks: 

• Choosing a tool before the goals are clear
• Not involving employees
• Introducing software that is too complicated
• Not communicating rules and processes clearly
• Presenting time tracking as "control"

The bottom line: with good preparation, time tracking becomes a success story

Introducing time tracking does not have to be a huge effort. With clear goals, understandable communication and the right software you create legally compliant, transparent and fair time tracking. A well-thought-through approach helps you build acceptance in the team and really make the most of the benefits of time tracking.

If you want to introduce digital time tracking, start with a free trial and let your team have a say early on. That builds trust and makes the change considerably easier. If you are still looking for the right tool, here is the link to our top 10 list of the best time tracking apps 2026.