Time tracking obligation in Germany 2026

1Short version: what applies today

Since the German Federal Labor Court ruling of 13 September 2022 (case 1 ABR 22/21), every employer in Germany must systematically record employee working time . The obligation applies regardless of industry, headcount, or whether a works council exists. For businesses with 1 to 100 employees this means: paper lists, spreadsheets, or pure trust-based time management are no longer sufficient in most cases.

The legal basis is not new — the Federal Labor Court (BAG) derived it from Section 3 Paragraph 2 No. 1 of the Occupational Health and Safety Act (ArbSchG) in combination with the European Court of Justice ruling „CCOO / Deutsche Bank“ of 14 May 2019 (case C-55/18), which requires employers to install an „objective, reliable, and accessible“ system for recording daily working time. The German Federal Ministry of Labour (BMAS) is currently drafting a revision of the Working Time Act (ArbZG) to codify this in detail. Until that draft becomes law, the BAG ruling itself is binding; the practical details are subject to interpretation.

Employers without documented time tracking should introduce it by 2026 at the latest. Not because of imminent fines — those will come with the specific statute — but because in labor disputes (overtime claims, dismissal protection cases) the burden of proof effectively rests with the employer when no reliable working-time record exists.

2The 13.09.2022 BAG ruling in detail

The case itself only tangentially concerned time tracking. A works council wanted to force introduction of a time-recording system via a co-determination initiative. The Regional Labor Court of Hamm had granted this; the Federal Labor Court set the decision aside — but with reasoning that has far broader nationwide implications: a co-determination initiative right did not exist precisely because the employer was already obliged to record working time under Section 3 Paragraph 2 No. 1 ArbSchG.

The Federal Ministry of Labour has accepted the ruling as current law. Consequence: the obligation exists; the exact "how" is now going through the legislative process. The current draft treats electronic recording as the standard case but allows exceptions for very small businesses and for collectively-agreed trust-based working time.

References: Full text of the BAG ruling and press release No. 35/22 at bundesarbeitsgericht.de/entscheidung/1-abr-22-21 . Working Time Act in full: gesetze-im-internet.de/arbzg .

3The ArbZG draft: what is likely coming

The BMAS draft (2023, still under political review) anchors the recording obligation in Section 16 Paragraph 2 ArbZG. The key points for businesses with 1 to 100 employees:

Electronic recording as standard. Start, end, and duration of daily working time must be recorded electronically.

Same-day recording. Time must be logged on the same day. Retroactive weekly bookkeeping is no longer envisaged as the rule.

Two-year retention. Matches the existing Section 16 ArbZG and Section 17 of the Minimum Wage Act (MiLoG) for mini-jobs and minimum-wage-sensitive roles.

Tamper resistance. Subsequent changes must be logged with timestamp and user ID. Overwriting a spreadsheet cell is not sufficient.

Delegation to employees is allowed. Employees may enter their own hours; the employer remains responsible for a functioning system.

Exceptions. Collectively-agreed trust-based time for "leading employees" under Section 5 Para. 3 Works Constitution Act stays possible; small firms with fewer than 10 employees may still record on paper for a longer transition — but they must still record.

Staggered transition periods. The draft foresees deadlines between one and five years after entry into force — larger firms (250+) first, small firms last.

Important: the draft has not been passed. It does, however, indicate the direction employers should plan for. Anyone rolling out a system in 2026 should make sure it can already meet the draft's requirements — otherwise a second migration will follow within a few years.

4What employers must actually do

The practical rollout for a typical business with 5 to 100 employees can be reduced to seven steps:

Step 1: Identify employee groups

Not every role is treated the same. Salaried staff, mini-jobbers, working students, apprentices, and leading employees each have different rules. For mini-jobbers and employees covered by Section 2a of the Undeclared Work Act (construction, gastronomy, freight, building cleaning, and others), the MiLoG recording obligation applies additionally — the topic has been binding for that group since 2015.

Step 2: Choose a recording medium

Realistic options for small businesses: dedicated time-tracking software (web/app), a time module inside an existing operations platform, or — for the very smallest teams — a tamper-resistant sheet system with signature. Loose paper lists are legal but produce evidentiary gaps in practice.

Step 3: Define what gets recorded

Start, end, duration, breaks. Formally that is enough. Businesses that want to capture project time for cost accounting (typical for agencies, IT service firms, and skilled trades with client billing) add a project or cost-center reference — not required by law, but a sensible extension.

Step 4: Separate breaks cleanly

Under Section 4 ArbZG, more than 6 hours of work requires at least 30 minutes of break; more than 9 hours requires 45 minutes. Breaks may be split into 15-minute blocks. Missing or forgotten breaks are a common audit finding by customs (Zoll) and trade associations. The system should either prompt for a break or automatically deduct one when the 6-hour threshold is crossed.

Step 5: Watch rest periods

Between two working days there must be at least 11 uninterrupted hours (Section 5 ArbZG). Stopping at 20:00 in the evening means you cannot restart before 07:00 the next morning. For shift-based businesses and on-call setups this is the most frequent compliance trap.

Step 6: Document maximum daily working time

Section 3 ArbZG: 8 hours per working day, extendable to 10 hours provided the average across the reference period (up to 6 months or 24 weeks) stays at 8. The system must be able to compute the reference period.

Step 7: Involve the works council

If one exists: introducing or changing a time-tracking system triggers co-determination under Section 87 Paragraph 1 No. 6 Works Constitution Act. Without a works council this step is skipped, but transparent communication with the team is still smart.

5Systems and legal requirements in detail

A permissible time-tracking system must, by prevailing interpretation, satisfy the following criteria:

Objective. Recording must not depend on a supervisor's subjective judgment. Automatic timestamps at clock-in and clock-out satisfy this.

Reliable. Data must not be lost. Cloud-based systems need a documented backup concept.

Accessible. Employees must be able to inspect their own recorded hours. A purely employer-side "black box" is not compliant.

Tamper-resistant. Changes to recorded hours must be logged — who, when, from what to what. A raw overwrite in a spreadsheet does not satisfy this.

GDPR-compliant. Time records are personal data. Data-processing agreements with the software vendor, defined retention limits, no biometric markers without consent.

An often underestimated point: geofence-based recording is technically possible but legally problematic without documented operational necessity (for example: on-site construction measurement). Employers using it need a technical concept, a data-protection impact assessment (DPIA), and, where a works council exists, its consent.

For businesses with cross-border presence — for example branches in Austria or Switzerland — the German recording obligation applies to employees based in Germany. Posted workers additionally trigger notification duties under the Posted Workers Act (AEntG).

6Common mistakes

Six patterns recur across research with businesses from 5 to 80 employees:

Trust-based time with no legal basis. "Trust-based time" in the strict legal sense only applies to a narrow group (leading employees, Section 18 ArbZG). For everyone else, even under a "trust" culture, hours must be recorded — the employer may delegate the recording to employees, not abolish it.

Breaks not tracked separately. "09:00 to 17:00 makes 8 hours" is wrong because it omits the 30-minute break. Systems that don't prompt for breaks produce MiLoG violations for mini-jobbers.

Excel as the system. An XLSX on a shared drive is not tamper-resistant. Anyone with write access can change hours without leaving a trail. It only works if a signature or approval step is technically enforced.

Reference period is not computed. Section 3 ArbZG allows 10-hour days only if the reference-period average stays at 8. Businesses that don't calculate this risk fines.

Rest-period breaches from on-call and home office. A client call at 22:30 followed by a 07:00 start the next day violates Section 5 ArbZG. The system should flag such patterns.

No retention. Section 16 ArbZG requires records to be kept for at least two years. Businesses that clean up after a year have no evidentiary basis in a dismissal or overtime dispute.

Summary: what to do this quarter

If you are responsible for a business with 1 to 100 employees, these are the three actions with the highest value per hour invested:

Take stock. Do we record time today? Where? How? Is it tamper-resistant? Are breaks and rest periods handled correctly? Use our ArbZG compliance checker for a five-minute self-assessment.

System decision. Businesses under 10 employees often manage with a lightweight time-tracking app. From about 15 employees onward it becomes worthwhile to bundle time tracking with HR/vacation, project billing, and travel expenses in one tool to avoid duplicate data maintenance.

Four-week rollout. Week 1: pick the system. Week 2: pilot with one team. Week 3: roll out across the business. Week 4: inform the works council (if any) and file the documentation.

The time-tracking obligation is not a bureaucratic burden but operational clarity: businesses that know today where the hours go have tomorrow the reliable basis for capacity planning, quoting, and fair compensation. And the legal basis is fixed either way.

Sources and further reading

Federal Labor Court, decision of 13.09.2022, case 1 ABR 22/21: bundesarbeitsgericht.de/entscheidung/1-abr-22-21

Working Time Act (ArbZG): gesetze-im-internet.de/arbzg

Occupational Health and Safety Act (ArbSchG) Section 3: gesetze-im-internet.de/arbschg/__3.html

Minimum Wage Act (MiLoG) Section 17 Recording obligations: gesetze-im-internet.de/milog/__17.html

Frequently asked questions

When did the time-tracking obligation start in Germany? It has been in force since the Federal Labor Court (BAG) ruling of 13 September 2022. The court derived the obligation from Section 3 (2) No. 1 ArbSchG in conjunction with the ECJ ruling of 14 May 2019 (C-55/18). It applies immediately to every employer, regardless of industry or headcount.

Is Excel enough for time tracking? In most cases, no. A spreadsheet on a shared drive is not tamper-resistant — changes cannot be logged without additional technical enforcement. Excel is only acceptable when a signature or approval step is technically enforced. From roughly five employees upward, a dedicated time-tracking tool is more practical.

Does the obligation also apply to businesses with fewer than 10 employees? Yes. The BAG ruling does not differentiate by size. The pending ArbZG draft foresees longer transition periods for very small firms before mandatory electronic recording, but does not lift the recording obligation itself.

How long must time records be kept? At least two years under Section 16 (2) ArbZG. For mini-job and minimum-wage-sensitive employees, Section 17 MiLoG (also two years) applies additionally. Tax-relevant time data is additionally subject to the ten-year GoBD retention obligation.

Can employees record their own hours? Yes. Employers may delegate the recording task to employees but remain responsible for ensuring the system is objective, reliable, accessible, and tamper-resistant. Pure trust-based time without any recording is only permitted for leading employees under Section 18 ArbZG.