Are there exemptions from the time tracking obligation for small companies?

No. The time tracking obligation applies regardless of company size. Whether 3 of the 30 employees, it still has to be recorded. Planned transition periods for SMEs are mentioned in the 2025 coalition agreement, but they are not yet applicable law

Is a head of department exempt from the time tracking obligation?

Only if they also carry staff responsibility, may hire and relieve employees and act free of instructions. If any one of these three points is missing, the recording obligation applies to managers too.

Do trust-based working hours replace the time tracking obligation?

No. Trust-based working hours are a working time model, not grounds for an exemption. The obligation to record the start and end of work and breaks remains in place with trust-based working hours too.

What happens if I do not record working hours?

Under Section 22 of the German Working Hours Act, fines of up to €30,000 are possible. On top of that, as an employer you automatically risk the weaker position in a dispute before the labour court – without records you simply have no proof.

Time tracking obligation: who is exempt in 2026

Q: Who is exempt from the time tracking obligation?

Exemptions only apply to certain groups of people: senior executives with genuine staff responsibility and the right to issue instructions, chief physicians, certain academics and close family members in family businesses. Industry or company size play no role.

The time tracking obligation in Germany: where things stand

Since the 2022 ruling of the German Federal Labour Court (Bundesarbeitsgericht, BAG), the position is clear: all companies in Germany are obliged to record their employees' working hours systematically. That covers the start of work, the end of work, duration and breaks – up to date daily, tamper-proof and accessible to the authorities and to employees.

The basis for this is the 2019 ECJ ruling, which obliges all EU member states to introduce a statutory time tracking obligation. A dedicated law is still outstanding, but the BAG has made it clear: waiting is not an option. The obligation applies now.

An important point: there are no exemptions by industry or company size. Whether you are a trades business, a medical practice or an industrial company – the time tracking obligation applies everywhere. What does exist are exemptions for certain groups of people. And that is exactly where a closer look pays off.

Exemptions: these groups of people are exempt

Section 18 of the German Working Hours Act governs who is exempt from the time tracking obligation. The most important message first: it is always about individual people and their specific role – never about a whole industry or a whole business.

1. Senior executives and chief physicians

This is the group that causes the most misunderstandings in practice. Because not everyone with "head" in their job title is automatically exempt.

For someone to really count as a senior executive, all three points have to apply:

They may decide themselves who the company hires – and who it dismisses.
They are not bound by anyone's instructions – so they can make far-reaching decisions independently.
They carry genuine staff responsibility.

If even one of these points is missing, the exemption does not apply. A head of department who leads a team but is not allowed to hire people has to record working hours.

Additional exemption: The German Working Hours Act explicitly excludes chief physicians from the German Working Hours Act. So they do not have to record working hours either.

2. Certain managers in the public sector

Anyone who holds a management role in the public sector and is allowed to make staffing decisions independently there – for example heads of public authorities or their direct deputies – also falls outside the time tracking obligation. That does not apply to ordinary public sector employees, though.

3. Care workers who live in the household

Anyone who permanently lives with a person they look after, care for or bring up is exempt. That sounds unusual at first, but it covers, for example, domestic helpers or carers who live around the clock in the household of a person in need of care. Someone who only comes during the day to provide care and goes home in the evening, by contrast, does not fall under this exemption.

4. Certain roles in churches and religious communities

Anyone working in what is known as the liturgical area of a church or religious community – for example as a pastor or priest – is also exempt. Important: this does not apply to all church employees across the board, only to those who carry out religious duties directly.

The most common misconceptions about the time tracking obligation

In practice, a few misunderstandings about the exemptions from the time tracking obligation stubbornly persist.

Myth 1: "We are too small, the obligation does not apply to us."

Company size is simply not a criterion. The time tracking obligation applies regardless of how many people you employ.

Myth 2: "We have trust-based working hours – that replaces recording."

Trust-based working hours are a working time model, not a free pass. The obligation to record remains in place.

Myth 3: "My team leader counts as a senior executive."

That depends on the details – and they are often underestimated. Without all three criteria (staff management, authority to hire and dismiss, freedom from instructions) the exemption does not apply. In practice, very few team leaders or heads of department meet all three points at the same time.

What is currently happening in the Working Hours Act and what that means for you

The current situation around the working time recording law is, to be honest, still unclear. Here is where things stand:

What the coalition agreement says about time tracking

In 2025 the CDU and the SPD promised to write electronic time tracking into law – with transition periods for SMEs and the preservation of trust-based working hours. Exactly how that would look was still open at the time.

What is happening around the reform of the Working Hours Act

In May 2026, Federal Minister Bärbel Bas announced that she would present a concrete draft law in June. It is intended to write the time tracking obligation into law – coupled with a reform of maximum working time, which is to be switched from a daily to a weekly basis. The idea behind it: more flexibility for employers and employees – but at the same time more oversight through mandatory time tracking, so that this flexibility does not turn into exploitation.

What is still open regarding a law

How the law will handle trust-based working hours and what concrete relief will come for small businesses will only become clear with the draft in June 2026. Incidentally, it would not be the first attempt – a draft law from Hubertus Heil already failed in 2023.

Do not wait for the law – start today

Whether the draft law arrives in June or fails again – that changes nothing about the basic direction. Courts are already ruling today as if the law existed. Anyone who waits risks fines of up to €30,000 and a weak position before the labour court. Anyone who acts today does it calmly, without being forced, without pressure and without a last-minute rollout.

So the question is not whether, but how.

clockin makes time tracking as straightforward as you need it to be: mobile, intuitive and without paperwork chaos. Using a smartphone, tablet terminal or browser, your employees record their hours in a few clicks, whether on the job site, at a customer's premises or in the office.