Seven years after the Court of Justice of the European Union told every member state to make employers measure daily working time, many companies still run on gut feeling and Excel. The employee time recording law that applies to you depends on where your people sit, and in Germany the requirements have shifted twice since 2019, with a third change on the table. Below: what must be recorded, which time tracking systems comply with the law, whether trust-based working time survives, GDPR limits, and a compliance checklist.
One note first: this is general information, not legal advice.
Where does the obligation to record working time come from?
On 14 May 2019 the CJEU ruled in case C-55/18 (CCOO v Deutsche Bank SAE) that the Working Time Directive and the EU Charter of Fundamental Rights require member states to oblige employers to set up an “objective, reliable and accessible system” that measures the daily working hours of each worker. Without such a time recording system, the court said, neither the 48-hour limit per week nor daily rest periods can be enforced. The official CJEU press release on case C-55/18 is available on the court’s website.
Germany did not amend its Working Hours Act in response. Instead, the Federal Labour Court (Bundesarbeitsgericht, BAG) stepped in. In its decision of 13 September 2022 (1 ABR 22/21) the court held that the employer is already obliged under section 3(2) no. 1 of the Occupational Health and Safety Act (Arbeitsschutzgesetz, ArbSchG), read in line with EU law, to introduce a system that records the start, end and duration of daily working time, including overtime.
In practice this means:
- Employers must record working hours for all employees, in every sector and company size, at the office, on the road or from home.
- Recording only hours beyond eight per day, as section 16(2) of the Working Hours Act (ArbZG) has long required, is no longer enough.
- The form is not prescribed. Paper, spreadsheets, a terminal or an app all count, as long as the time records are reliable and inspectors can check them. The employer may delegate the tracking, but stays responsible.
Is trust-based working time still allowed?
Yes. Vertrauensarbeitszeit, the model where nobody checks when you start and stop, survives the BAG ruling in modified form. Employees still decide when they work; what changes is that their hours must be written down. Most companies now let staff track their own start, end and breaks in a self-service tool that flags breaches of the maximum working time and the 11-hour rest period. The trust concerns the *scheduling*, not the *documentation*. Flexitime, working time accounts and remote work follow the same logic.
Germany’s draft law: status in September 2026
A first draft amendment to the ArbZG from April 2023 would have made electronic time tracking mandatory; it never reached parliament before the coalition behind it broke apart in late 2024. A new Referentenentwurf (ministry draft) followed on 18 June 2026. Its core requirements:
| Draft rule (June 2026) | Content |
|---|---|
| What to record | Start, end and duration of daily working hours, entered on the same day |
| Form | Electronic by default; the specific time tracking system is not prescribed |
| Transition periods | 1 year for all employers; 2 years under 250 employees; 5 years under 50 |
| Micro-employers | Up to 10 employees: permanently exempt from the electronic form |
| Trust-based working time | Remains lawful; employers must still learn of breaches, e.g. via automated alerts |
| Retention | At least two years |
| Fines | Up to EUR 50,000 for missing records, faulty retention or denying inspectors access |
As of September 2026 the cabinet has not adopted the draft, so none of this is law yet. The BAG ruling and section 16 ArbZG remain the binding baseline.
How do the rules differ across countries?
| Jurisdiction | Who must be tracked | Legal basis | Notes |
|---|---|---|---|
| EU (general) | All workers, daily | CJEU C-55/18, Directive 2003/88/EC | Member states implement differently |
| Germany | All employees | § 3(2) no. 1 ArbSchG (BAG 2022), § 16(2) ArbZG | Electronic recording planned in the 2026 draft |
| Austria | All employees | § 26 Arbeitszeitgesetz (AZG) | Start, end, duration and breaks; self-recording allowed for flexitime and home office |
| Switzerland | Most employees | Art. 46 ArG, Art. 73a/73b ArGV 1 | Waiver for autonomous high earners; simplified recording for staff who set 25%+ of their hours |
| United Kingdom | Workers within the 48-hour limit | Working Time Regulations 1998, reg. 9 | “Adequate records” kept two years; no daily clock-in duty |
| United States | Non-exempt employees | Fair Labor Standards Act (FLSA) | Hours worked each day and week; any method; payroll records three years, time cards two |
The pattern: continental Europe tracks everyone, the UK records enough to prove the weekly cap, and the US ties time records to overtime pay for hourly staff. Cross-border employers need a per-country rule set for employee time tracking.
Which time tracking systems comply with the law?
The CJEU’s bar is objective, reliable, accessible. Applied to real tools:
- Terminal or badge systems – tamper-resistant, but expensive and impractical for remote workers.
- Time tracking software and mobile apps – the standard choice. Staff log start, end and breaks from any device; the software flags overtime and missing rest periods automatically.
- Spreadsheets – legal in Germany for now, but easy to edit without a trace. Austrian labour inspectors already challenge plain Excel files, and the German draft would phase them out for most employers.
- Paper sheets – still permitted, and the 2026 draft keeps them for micro-businesses. Retain them for two years, legible and complete.
The records should feed into payroll cleanly; many companies pair a time tracking app with digital payroll accounting so that overtime, supplements and absences flow through without retyping.
GDPR: collect what the law needs, nothing more
Working time data is personal data, and the recording duty itself is the legal basis under Article 6(1)(c) GDPR.
- Data minimisation: GPS location, screenshots, keystroke logging or biometric clock-ins go beyond what the time recording law requires and need a separate, documented justification.
- Transparency: Tell employees what is tracked, why, who sees it and how long it is kept (Article 13 GDPR).
- Works council: In Germany, a system that can monitor performance triggers co-determination under section 87(1) no. 6 of the Works Constitution Act. Agree it before rollout.
What are the penalties for non-compliance?
In Germany today, failing to keep the overtime records required by section 16 ArbZG is an administrative offence with fines of up to EUR 30,000. The broader ArbSchG duty carries no direct fine yet; labour inspectors first issue an order, and ignoring it can also cost up to EUR 30,000. The pending draft would raise the ceiling to EUR 50,000.
The bigger risk is often civil: without reliable data, employers struggle to defend overtime claims, and courts tend to shift the burden of proof onto the company. HR teams managing growing headcounts will find more in our piece on scaling company growth and personnel management.
Compliance checklist: employee time recording law
Run this audit yearly and after any change in headcount or country.
- [ ] Start, end, breaks and total daily working hours are recorded for all employees, including remote staff.
- [ ] Entries are made on the day of work, not reconstructed at month end, and cannot be altered without an audit trail.
- [ ] Managers review the time records regularly and act on breaches of maximum hours per week and rest periods.
- [ ] Records are kept for at least two years (three years for US payroll records).
- [ ] Only data required by law is collected; no GPS or screenshots without a documented reason.
- [ ] Employees have been informed in writing (Article 13 GDPR), and the works council has agreed where one exists.
Ticking all six boxes puts you ahead of most employers, and close to where the 2026 draft would take you.
*This article provides general information on employee time recording law as of September 2026 and does not constitute legal advice. Laws change; consult a qualified employment lawyer for your specific situation.*
