Time tracking for managing directors: is it required by law?

Does a salaried managing director have to record working hours? 

Whether a managing director is required to track their time depends on whether they count as an employee under the German Working Hours Act (Arbeitszeitgesetz, ArbZG) - in particular, whether they hold no stake in the company and are bound by instructions. 

Non-shareholder managing directors (with no stake in the company) are generally subject to the German Working Hours Act and must record their working hours. This includes the statutory rest periods and maximum working hours. Since the landmark ruling of the Federal Labour Court in 2022 at the latest, it has been clear: employers are obliged to provide a working time system. That also covers senior positions, provided they fall under the ArbZG. 

Shareholder-managing directors who hold a stake in the company and have a decisive say, on the other hand, are not considered employees - and therefore do not fall under the obligation to record working hours set out in the Working Hours Act. 

Who is exempt from time tracking? 

According to the law, the exemption from the obligation to record working hours applies to: 

• Senior executives who hold significant entrepreneurial decision-making powers
• Managing directors with a stake in the company, who are not subject to the ArbZG 
• Self-employed people and freelancers  

Legal grey area: Many companies assume that managers do not have to record their working hours - but that is often wrong. A careful review is needed to avoid legal risks. 

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How many hours does a managing director usually work? 

The reality is that managing directors work far more than 40 hours a week. 50 to 70 hours is not unusual, and weekend work is often part of the job. 

But: not all working time is the same. Not every hour worked is automatically documented. Without time tracking, it stays unclear whether the statutory limits were respected - a risk in the event of workplace accidents or legal disputes. 

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Why time tracking makes sense for managing directors too

Even where managing directors are not legally required to record their working hours, structured documentation of working time is still worthwhile - for several reasons: 

1. Legal compliance on working hours and rest periods 

In a time of increasing regulation in particular, it is important to keep track of the hours worked and the rest periods observed. Anyone who documents their hours transparently can prove, if it ever comes to that, that the statutory requirements were met - for example in the event of workplace accidents, employment law disputes or audits. 

2. Evidence of the actual workload

Managing directors often work far beyond what was contractually agreed. Complete time tracking helps make the actual workload visible - for themselves, but also to shareholders, supervisory boards or HR managers. That creates transparency and can supply arguments for adjusting how tasks are shared out or how the role is paid. 

Protection in questions of overtime, illness and liability 

Salaried managing directors with an obligation to work overtime in particular should document their working hours precisely - that can be decisive in a dispute. In the event of illness or legal disputes, this evidence can be decisive - for example on the question of whether overwork or a lack of recovery time contributed to the illness. A documented record of working hours can also be an exonerating factor in the context of managing director liability. 

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Overtime: what is allowed? 

Overtime worked by managing directors is often covered by the contract - but here too: documentation protects both sides. With salaried managing directors especially, a lack of records can later lead to employment law disputes. 

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Whether legally required or not - time tracking is an important management tool. With clockin, managing directors create transparency, security and efficiency in their everyday lives.

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