In its September 2022 decision on the recording of working hours (Case No. 1 ABR 22/21), the German Federal Labor Court (Bundesarbeitsgericht, or BAG) not only attracted a great deal of attention among employers and employees in Germany, but also gave the legislature homework to create a more defined statutory implementation of the obligation to record working hours. Shortly after publication of the reasons for the decision, the Federal Minister of Labor, Hubertus Heil, announced that a corresponding draft bill would be presented in the first quarter of 2023. Although eagerly awaited, the March 31, 2023 deadline passed without any sign from Berlin. Then, on April 18, 2023, the Süddeutsche Zeitung first reported on a draft bill it had received. The following is an overview of the possible legal changes this draft bill would create.

What the BAG decided in September 2022

On September 13, 2022, the BAG ruled on the question of whether employers must provide a system for recording working time and thus comprehensively record the working time of employees. The decision was based on a works council request to have a “right of initiative” to have electronic time recording confirmed—i.e., whether it could demand that employers electronically document time recording. The BAG denied the works council's right of initiative, but confirmed a comprehensive legal obligation to record working hours. The decision was perceived as a "game changer" by many German employers—first and foremost by those who had previously relied on trust-based working time and had deliberately refrained from monitoring their employees in this respect.

Among other things, the BAG clarified that the recording of working time can also be delegated to employees and that the exceptions of the European Working Time Directive apply (which is why a recording of working time is not required for executive employees within the meaning of the Works Constitution Act). However, the Federal Labor Court deliberately left room to maneuver, particularly with regard to the form: Electronic recording of working time should not be mandatory—at least as long as the legislator does not stipulate otherwise.

The draft bill

The draft bill provides for amendments to both the Working Hours Act and the Youth Employment Protection Act. The fact that the amendments are not made to the Occupational Safety Act (Arbeitsschutzgesetz, or ArbSchG) alone—from which the BAG derived the obligation to record working hours—is crucial, because unlike the Occupational Safety Act, the Working Hours Act provides for the possibility of imposing fines directly in the event of violations instead of only in the event of violations of official orders.

The draft bill clarifies that the recording of working hours can be delegated to employees.

In addition, the following (new) obligations arise for employers:

• Working time must be recorded on the day the work is performed—deviations of up to seven days are possible only by collective bargaining agreement.
• It is also possible to collectively record working time by using and evaluating electronic shift plans. This applies provided that the start, end and duration of the daily working time can be derived from the shift schedule for the individual employee and deviations from the working times specified in the shift schedule, e.g., vacation, absences and additional working times, are recorded separately electronically.
• Working time must be recorded electronically; in addition to time-recording devices, apps and spreadsheet programs are also mentioned as examples—again, deviations are also possible only by collective bargaining agreement.
• Employers are responsible for proper recording—recording of working hours by employees must be checked at least on a random basis.
• If employees have agreed to an extension of working hours on the basis of a collective agreement, a record of this must be kept.
• The timesheets must be kept for at least two years.
• The records required for checking compliance with the working time regulations must be kept available in German.
• At the request of the supervisory authority, the documents must also be kept available at the place of employment, e.g., in the case of construction work at the construction site.
• Upon request, the employer shall inform the employee of the recorded working time and provide a copy of the records.

The draft bill stipulates electronic recording and allows the parties leeway to deviate from this requirement only via collective bargaining agreement.

In addition, there is provision for at least a phased introduction according to employer size following the entry into force of the law. Employers with fewer than 250 employees will then have two years, and employers with fewer than 50 employees five years, to introduce the system. All others have one year after entry into force. Small businesses with up to ten employees and private households will be allowed to permanently maintain non-electronic records.

Parties to collective bargaining agreements may also exempt certain employees from the obligation to record working time. This is possible for those whose total working time is not measured or not determined in advance due to the special characteristics of the activity performed, or where the total time can be determined by the employees themselves. As examples, the draft explanatory memorandum mentions executives, prominent experts and scientists.

What will become of trust-based working time?

According to the draft bill, trust-based working time is to remain possible. The employer is allowed to continue to refrain from monitoring the contractually agreed working time.

However, the employer must still take suitable measures to ensure that it is aware of violations of the statutory provisions on the duration and location of working hours and rest periods. In effect, this means that employees working on a basis of trust must nevertheless comprehensively record their working time. Employers can, however, “limit” themselves to responding, for example, to notifications from the working time recording system in the event of violations of the Working Time Act. The retention obligations with regard to the recorded working times also apply in the case of trust-based working time.

Conclusion

It is important to note that this is currently only a draft bill. As a rule, the content of such a draft is revised several times. Each draft is voted on by the cabinet, i.e., all ministers involved in the government and the Chancellor. Only after a decision has been made by the Cabinet is it a formal government bill that can be voted on in Parliament. It can therefore be assumed that the regulations outlined above are not yet the “final word.”

However, in view of the already-observed practice of occupational health and safety authorities’ carrying out company inspections and ordering the introduction of electronic working time recording, it is recommended that employers consider appropriate working time recording without delay and prepare for its introduction.

In addition, working time recording makes violations of the Working Time Act and overtime more visible. The associated risks should be countered by accompanying compliance measures such as the delegation of employer duties, training and defined processes when working time violations are discovered. Employers are encouraged to work with their employment counsel in this regard.