German Working Hours Act: Draft bill significantly stricter than EU requirements

The draft can be considered as a direct response to rulings by the European Court of Justice ("ECJ") and the German Federal Labor Court ("BAG"), which had demanded an exact recording of working hours. We have summarized for you the most important planned amendments, which are now being coordinated within the German government.

Recording requirement: Digitally and on the same day

Daily working time, i.e., start, end and duration, is to be recorded digitally, with a few exceptions. Exemptions from the obligation to record working time electronically are possible,

• in a collective bargaining agreement or on the basis of a collective bargaining agreement in a works agreement,
• for employers with up to ten employees,
• for foreign employers without a permanent establishment in Germany who assign less than ten employees to Germany, and
• for domestic employees in private households.

In addition, there are to be staggered transitional arrangements for smaller companies with less than 250 employees, which can continue to record their working hours on paper.

It is mandatory that the working hours be recorded on the day on which the work is performed – although exceptions are also possible by collective agreement – but no later than the end of the seventh day (Art. 16 (7) no. 2 ArbZG/RefE (Draft bill to the German Working Hours Act)). The employer is obliged, as it were, to inform all employees “at their request” of the hours worked and to provide printouts/electronic copies for this purpose. These must be kept in German and stored in Germany – for at least two years (like German Minimum Wage Act (MiLoG)/German Employee Secondment Act (AEntG)).

The employer is responsible for recording. However, he can delegate the recording to the employee or a third party, but yet remains responsible for the correct recording (Art. 16 (3) ArbZG/RefE).

Trust-based working hours as a working time model

The draft bill presented understands the concept of trust-based working hours as a working time model in which employers refrain from bindingly specifying the start and end of the daily working time to the employee. This model, which is not a trust-based working time model in the “classic” sense, i.e., as an agreement between employer and employee to generally waive time recording, remains possible. However, this requires for the working hours being recorded accordingly. The employer can therefore waive the recording. However, in such case he must “take appropriate measures” in order to ensure that he becomes aware of any violations of the statutory provisions on the start, duration and end of working hours as well as rest periods (Art. 16 (4) ArbZG/RefE).

Exemption from the obligation to record working hours for certain occupational groups

Collective bargaining partners are to be given the possibility to agree upon exceptions. Waiving time recording (trust-based working time in the “classic” sense) is possible for some occupational groups, but only if this is permitted by collective agreement or a works agreement based on a collective agreement (cf. Art. 16 (7) no. 3 ArbZG/RefE).

These conditions may be met, for example, by executives, prominent experts or scientists who are not obliged to be present at the workplace at fixed times, but who are free to determine the scope and timing of their working hours (Explanatory Memorandum of the RefE end of page 14).

Allowing for an exemption of certain occupational groups is in line with the requirement under European law; however, the draft bill provides for a “tightening” by allowing exemptions only if a trade union agrees.

Fine for violations of the obligation to keep records

Violations of the record-keeping requirement constitute an administrative offense which can be punished with a fine of up to EUR 30,000.

Conclusion: Companies should promptly consider digital recording of working hours

This draft bill is not a major achievement and it remains to be seen what will be left in the end. In any case, employers with more than ten employees – if they have not already done so – should consider the introduction of a digital working time recording system.

It is remarkable that this draft bill’s authors now feel obliged to emphasize digitalization (thus even going beyond the requirements of European law), given that they were unable to bring themselves to deviate from the strict written form requirement and allow digitized contract signatures in the German law on the documentation of conditions governing an employment relationship (“NachwG”).