Working Time Act: Control intensity and enforcement of sanctions are noticeably increasing.

"We'll wait and see until the legislature creates a clear regulation." This phrase echoed like a mantra through German HR departments and executive suites in recent years. It was a comfortable position: as long as the Working Time Act (ArbZG) didn't explicitly mandate a " time clock requirement " in black and white, the hope was that the troublesome issue of comprehensive time tracking could be postponed indefinitely. But while politicians in Berlin hesitated, reality had long since overtaken companies.

It's a rude awakening for many businesses when the first letter from the regulatory authority arrives in the mailbox. What began as a theoretical discussion about European legal requirements has developed into a concrete enforcement practice . The regulatory authorities – mostly the trade supervisory offices – have lost patience. They no longer act solely in an advisory capacity, but consistently resort to the instruments of administrative law: orders, inspections, and substantial fines are the new normal. Anyone who still believes they can get away without a system is playing a risky game with the rule of law and their own budget.

From Luxembourg to Erfurt: The legal cementing of an obligation

To understand why we, as a law firm, are issuing such a strong warning today, we must look back. The European Court of Justice (ECJ) set the ball rolling back in 2019 with its groundbreaking ruling in the CCOO/Deutsche Bank case (Case C-55/18) . The court made it unequivocally clear that member states must require employers to establish an objective, reliable, and accessible system for measuring daily working time . This is the only way to effectively monitor compliance with rest periods and the limits on maximum working hours.

In Germany, it was often argued that this ruling still needed to be incorporated into national law. However, the Federal Labor Court (BAG) put an end to this hope with a resounding decision in September 2022 (Case No. 1 ABR 22/21) . Since then, we have consistently pointed this out to our clients: The BAG derived the obligation to record working hours directly from existing occupational health and safety law. Specifically, Section 3 Paragraph 2 No. 1 of the Occupational Health and Safety Act (ArbSchG) is cited. This means that recording the start, end, and duration of work is no longer optional, but a legally mandated obligation under occupational health and safety law that applies directly. Even the Federal Ministry of Labor and Social Affairs (BMAS) has long since adjusted its communications and confirms this legal situation unequivocally.

The Hamburg Administrative Court is creating facts: Enforcement without a "new law"

A milestone in current case law is the ruling of the Hamburg Administrative Court (VG) of August 21, 2024 (Case No. 15 K 964/24) . In this case, an authority had ordered a company to submit past records of working hours and to implement a system for comprehensive recording in the future. The company contested this order – and failed miserably . The court confirmed that, based on Section 22 Paragraph 3 Sentence 1 No. 1 of the German Occupational Health and Safety Act (ArbSchG) , the authorities are empowered to take all necessary measures to remedy violations of the Act.

Particularly significant for practical application: The court clarified that no further clarification by the legislature is necessary. The general clauses of occupational safety regulations are entirely sufficient to enforce time tracking by the authorities. We are observing that this "Hamburg approach" is gaining traction nationwide. Authorities are no longer waiting for a reform of the Working Time Act; they are enforcing existing law. Often, a single anonymous complaint from a dissatisfied employee or a works council is enough to bring the entire company under scrutiny by inspectors.

The three levels of risk: When it gets expensive

Companies that ignore this issue risk entering a downward spiral of sanctions . We generally divide the risk into three stages. First comes the request for information and documentation. The authorities demand data from the past – data that often doesn't even exist. This leads to significant administrative stress and exposes the company's organizational weaknesses.

The second stage involves the threat of fines. While simply failing to have a system in place is often not directly punishable, the trap snaps shut as soon as an official order is issued and ignored. According to Section 25 Paragraph 2 of the German Occupational Safety and Health Act (ArbSchG), substantial fines can then be imposed. A glance at the standard schedules of fines shows that these can quickly reach sums far exceeding the cost of a modern software solution. Furthermore, anyone who persistently refuses to comply risks having their management's reliability called into question.

The third stage concerns the so-called "hidden costs." Without proper documentation, employers simply lack the necessary material for a successful defense in legal disputes concerning overtime or compensation . Companies without time tracking almost always find themselves on the defensive before labor courts, as they can barely meet their burden of proof.

Trust-based working hours and governance: A way forward

Despite the strict regulations, trust-based working time is not yet obsolete. We repeatedly emphasize that the European Court of Justice and the Federal Labour Court require the measurability of working time , but do not prohibit flexibility. Even with trust-based models , the start, end, and duration must be recorded – the specific arrangements, such as how and where work is carried out, remain at the company's discretion. The Hamburg Administrative Court has explicitly confirmed that no specific software is required, as long as the objective of occupational health and safety is achieved.

For companies, this means they now need to establish robust governance. Simply purchasing a tool is not enough. Responsibilities must be clearly defined: managers must be trained to take their supervisory duties seriously, and employees must know how to accurately record breaks and corrections.

Conclusion: Act instead of react.

The era of legal gray areas is definitively over. The confirmation of official sanctioning practices by administrative courts clearly demonstrates that time tracking is no longer a "nice-to-have," but a strict compliance requirement . Those who act now retain control and can choose systems that suit their own business. Those who wait until the authorities come knocking with a legally binding order and threatened fines will not only lose money, but also the flexibility to implement solutions. We strongly advise you to immediately review your internal processes and ensure your documentation is legally compliant.