Current regulations and planned changes to (electronic) working time recording in Germany – Effects on the compensation of overtime

1. Current regulations and planned changes to (electronic) working time recording in Germany


According to the German Working Hours Act, only overtime and Sunday work had to be documented until now, not all working hours. Following the landmark ruling by the Federal Labor Court (BAG) on September 13, 2022, there is now an immediate obligation in Germany to systematically record all working time – regardless of the planned amendment to the Federal Working Hours Act. The parties to collective bargaining agreements and companies will continue to decide on the specific companies’ arrangements.

This was preceded by the ECJ ruling on the recording of working time from 14.5.2019 (C -55/18 [“CCOO”]), according to which the member states are obliged to introduce an objective, reliable and accessible system to measure the daily working time worked by each employee.

In concrete terms

The obligation to introduce a system for recording working time is not limited to the employer making such a system available to employees for their own use. Rather, the employer is obliged to actually make use of the system.

However, as already noted in the BAG ruling, the obligation to record working time should be delegable. This means that the employee, the line manager or the employer can record the time.

There is currently no obligation for purely digital time recording. This still means that employees must record their working hours and employers must provide an appropriate system for this purpose. However, this documentation may be implemented both in paper form (including handwritten) and in digital form. Only the start, end and duration of daily working hours must be recorded, but not the exact location and duration of individual breaks.

There is also the option of trust-based working time. Trust-based working time generally refers to a flexible working time model in which the employee is responsible for deciding the position (i.e. start and end) of the contractually agreed working time. The employer “trusts” that the employee will fulfill his or her contractual work obligations. Documentation of working hours does not stand in the way of such an agreement.

On the other hand, the provisions of public law on the protection of working time (in particular the maximum daily working hours and rest periods) serve to protect the safety and health of employees and must already be complied with in the case of trust-based working hours. Trust-based working time in compliance with these requirements is therefore still possible.

The provisions of the Working Hours Act already apply regardless of the place of work, e.g. even when working from home. This means that the regulations on maximum daily working hours and rest periods must already be observed even when working from home.

Role of the works council

The Federal Labor Court has ruled that the employer is already legally obliged to record working hours if Section 3 (2) no. 1 of the Occupational Health and Safety Act is interpreted in accordance with EU law and that there is no right of initiative of the works council under Section 87 of the Works Constitution Act in this respect – which may be enforceable with the help of the conciliation committee.

Pursuant to Section 87(1)(6) of the Works Constitution Act, the works council has a right of co-determination with regard to the introduction and use of technical equipment designed to monitor the behavior or performance of employees. In principle, this can also include the introduction of an electronic working time recording system, provided that there is still scope for regulating the content of the working time recording system, i.e. this is not already stipulated by statutory or collectively agreed regulations.

Legal supervision

Although the Working Hours Act and the Occupational Health and Safety Act are federal laws, it is the responsibility of the federal states to monitor the provisions of these laws. The federal states and the occupational health and safety authorities designated under state law (e.g. the trade supervisory offices) are also responsible for interpreting and applying the statutory provisions. Only they – and, in the event of a dispute, the courts – can therefore make binding decisions in individual cases. In the event of violations, they can, for example, demand improvements or, if necessary, impose fines, the amount of which is adjusted to the severity of the respective violation on a case-by-case basis.

Electronic recording: planned regulations (as of Dec. 2023)

In order to create legal certainty on the question of the “how” of the recording obligation, the Federal Ministry of Labor and Social Affairs drew up a proposal in April 2023 for the design of working time recording in the Working Hours Act and the Youth Employment Protection Act, which is currently still being discussed within the government:

According to the Federal Ministry of Labor’s draft law, companies must ensure that their employees’ working hours are recorded accurately. The law stipulates that the daily working hours of employees in Germany must be recorded electronically. However, collective bargaining parties can agree exceptions. Small businesses with fewer than ten employees are also exempt.

According to the draft law, employers will be obliged to electronically record the start, end and duration of employees’ daily working hours. However, the recording can also be carried out by the employees themselves or by a third party (delegation). According to the draft, the collective bargaining partners should be able to agree exceptions. For example, they should be able to deviate from the electronic form and permit manual recording in paper form.

It remains to be seen in what form and when the draft bill will be passed.

2. Effects on the compensation of overtime

It remains the case that employees must prove the existence and number of overtime hours if they wish to claim compensation for them. This was decided by the Federal Labor Court in its ruling of May 4, 2022, case no. 5 AZR 359/21.

In the case decided by the Federal Labor Court, a delivery driver was in dispute with his former employer over compensation for – as the driver had calculated – 429 hours of overtime. At first instance, the labor court came up with the idea of incorporating ECJ case law into its deliberations. The idea: If an employer is obliged to record every hour worked according to ECJ case law anyway, it can no longer deny afterwards that it was aware of and tolerated the overtime. The employee therefore no longer has to prove that and how much overtime was caused by the employer. This ruling caused a stir, as it was tantamount to a so-called reversal of the burden of proof. Previously, the employee was obliged to provide evidence for each specific hour of overtime. Only then did the employer have to explain whether and why it assumed there would be less overtime.

The Regional Labor Court and the Federal Labor Court have rejected this reversal of the burden of proof. The ECJ established the obligation to record time in the area of occupational health and safety in order to protect the health of employees by complying with maximum working hours. However, the delivery driver was not concerned with health and safety issues but with remuneration issues. The ECJ has no jurisdiction in this area. Therefore, the ECJ’s ruling has no effect on the burden of presentation and proof in overtime proceedings. This applies in any case when it comes to the question of the employer’s motivation – i.e. the ordering, toleration, approval and necessity – of overtime. The delivery driver was unable to prove this in the case decided.

This BAG decision is a relief for the employer in that the employee must provide evidence of the overtime.

In another decision from 2019 (BAG 26.6.2019 – 5 AZR 452/18), the BAG again ruled that the employer approves the overtime by signing off on working time records.

Therefore, in the case of documented overtime that is not accepted by the employer, we would recommend not signing off on it and even informing the employee that no overtime has been ordered and that it will therefore not be paid or compensated.