The Federal Ministry of Labor and Social Affairs (BMAS) had announced that it would amend the Working Time Recording Act (ArbZG) as soon as possible in order to incorporate the decision of the Federal Labor Court (1 ABR 22/21) into law. This is because the BAG had determined that employers are obliged to record their employees’ working hours.

This “Draft Act amending the Working Hours Act and other regulations” (hereinafter: RefE-ArbZG) is now available. This gives an initial indication of where the journey could take us. In the following, we present the core components of the draft bill, place them in the context of economic practicability and point out possible legal problems.

Probably the most important provision of the draft bill: Section 16 para. 2 RefE-ArbZG

The draft bill provides for a basic obligation for employers to record employees’ working hours. § Section 16 (2) RefE-ArbZG provides that

“Start, end and duration of the daily working time […] ”

are to be recorded.

In addition, it should be possible for the employer not to take over the recording itself, but to transfer it to third parties or the employee. However, this does not change the fact that the employer remains responsible – Section 16 (3) RefE-ArbZG.

The extent of the employer’s responsibility can be derived from Section 22 para. 1 No. 9 RefE-ArbZG, which deals with the question of when an employer is in breach of regulations. It states that working time records must be prepared correctly, completely, in the prescribed manner and in good time and must be kept for two years.

However, there is still no regulation on the consequences of an employee negligently failing to record working hours correctly. The relationship between the employee and employer with regard to the recording of working hours must then be based on existing regulations under tort law.

RefE-ArbZG provides for electronic recording of working time on the same working day

Electronic recording is important, although the law does not initially specify what such electronic recording should look like.

Time recording devices that are already commonly used should be just as possible as recording with the help of apps on a cell phone or conventional spreadsheet programs. However, the explanatory memorandum to the draft also clarifies that recording in the form of evaluating electronic shift schedules could also fall under the term “electronic recording”. Although this is a convenient way for employers to comply with the electronic recording obligation, it is somewhat surprising, as this is no longer a specific recording of working time.

In addition, the electronic recording must be made immediately on the same working day. However, according to the explanatory memorandum to the draft bill, this should not prevent the records from being corrected, for example. In this context, collective agreements should also be able to regulate the recording of working hours up to seven days later – Section 16 para. 7 No. 2 RefE-ArbZG.

What questions remain unanswered?

Unfortunately, the current version of the draft bill does not address two problems that have arisen in connection with the aforementioned BAG decision.

On the one hand, the question of which employees are covered by the obligation to keep records – i.e. whether the working time of executive employees in particular must be recorded – and on the other hand, the question of how so-called non-time-critical activities during rest periods are to be assessed.

1. recording obligation with regard to executive employees

In the so-called “time clock judgment” of the ECJ (ECJ, judgment of 14.05.2019 – C-55/18), the ECJ assumed in principle that an employer’s obligation to record working time can also apply to executive employees. According to Art. 17 para. 1 of Directive 2003/88/EC, Member States may exclude the obligation to record working time for managerial employees. However, the ArbZG does not currently apply to “executive employees” (Section 18 (1) no. 1 ArbZG); this is not to be changed by the draft bill.

However, the parties to collective agreements are to be given the option to exclude the recording of working time in collective agreements for those employees for whom “the total duration of working time is not measured or cannot be determined in advance or can be determined by the employees themselves due to the special characteristics of the work performed” (Section 16 (7) no. 3 RefE-ArbZG). As a case of application of Section 16 para. 7 No. 3 RefE-ArbZG, the draft explanatory memorandum provides for managers, for example.

However, the question arises as to why the parties to the collective agreement can make such a provision if managers, as executive employees, are excluded from the scope of the ArbZG anyway in accordance with Section 18 ArbZG. The draft bill adopts the wording of Art. 17 para. 1 of Directive 2003/88/EC, but not the list of standard examples, which includes senior executives. According to the explanatory memorandum to the law, the relatively narrow concept of executive employees from Section 5 BetrVG is to apply to Section 18 ArbZG, to what extent this also applies to Section 16 para. 7 RefE-ArbZG or to what extent it is consistent with the current wording of Section 16 para. 7 RefE-ArbZG is unclear.

2. rest period interrupted by work email?

It is also questionable whether a non-time-critical activity during the rest period leads to an interruption of the rest period. As a result, this would mean that the rest period would have to start again in order to guarantee the “uninterrupted rest period” (Section 5 (1) ArbZG) of eleven hours. This raises the question of whether writing a business email at the end of the working day interrupts this rest period.

Unfortunately, the draft bill does not provide for any legal regulation in this regard. As there is still no decision on this topic in the case law of the Federal Labor Court, the legal uncertainty in connection with non-time-critical activities during the rest period remains.

Trust-based working hours are also possible under the RefE-ArbZG!

According to § 16 Para. 4 RefE-ArbZG, trust-based working hours, i.e. flexible working hours under the employee’s own control, should continue to be possible. To this end, the employer must comply with the provisions of Section 16 para. 3 and 4 RefE-ArbZG. On the one hand, the employee must record the working hours (Section 16 (3) RefE-ArbZG), and on the other hand, the employer must refrain from monitoring compliance with the contractually agreed working hours (Section 16 (4) RefE-ArbZG).

Even if such regulations are made, Section 16 para. 3 RefE-ArbZG continues to stipulate that the employer is responsible for the recording. The employer is therefore responsible for ensuring that the employee records the working time on the one hand, but also that the accuracy of the record is guaranteed on the other.

Employers must also note that they must continue to take “appropriate measures” to ensure that “they become aware of violations of the statutory provisions on the duration and location of working hours and rest periods”. It may therefore make sense – according to the explanatory memorandum – to provide employees with appropriate electronic recording systems so that appropriate monitoring remains possible.

Failure to comply with the obligation to keep records is now subject to a fine

As already mentioned, but nevertheless new, a breach of the employer’s obligation to keep records is now an administrative offense. This is therefore a new legal consequence for such violations – Section 22 para. 1 No. 9 RefE-ArbZG. According to this, the employer commits an administrative offense if he intentionally or negligently violates his obligations under Section 16 para. 2 RefE-ArbZG is violated. The administrative offense can be punished with a fine of up to € 30,000 – Section 22 para. 2 RefE-ArbZG.

Transitional provisions in the RefE-ArbZG: Companies get a grace period

Electronic recording is not mandatory for all employers. Companies with fewer than ten employees are not obliged to keep electronic records – Section 16 para. 8 S. 3 RefE-ArbZG, but conversely, a form of working time recording is also mandatory for these companies. The reason given for this is the financial cost of introducing an electronic recording system, which the legislator does not want to impose on such micro-enterprises. Nevertheless, it can also make sense for such companies to use an electronic recording system – not least for verification reasons.

In addition, the draft bill in Section 16 para. 8 RefE-ArbZG also provides for transitional regulations for companies during implementation. Accordingly, employers with fewer than 50 employees have five years after the law comes into force to introduce an electronic recording system. Employers with fewer than 250 employees have two years and all other employers, i.e. those with more than 250 employees, have one year to introduce electronic working time recording in their company.

Recording working hours: New provisions planned in the Working Hours Act, but unanswered questions remain.

The basic rule that employers are obliged to record the working hours of their employees will be incorporated into the Working Hours Act with the draft bill. However, exceptions, such as trust-based working hours, should still be possible. In some cases, collective agreements may deviate from the main provisions of the Working Hours Act, e.g. same-day recording and the recording of working hours of managerial employees.

However, it should be noted that the legislator has left some important questions unanswered, including the question of which activities interrupt rest periods.

It is not yet clear whether the draft bill will become law. However, it is clear that the legislator is willing to enshrine a general obligation to record working hours in the ArbZG in accordance with the decision of the BAG. In this respect, it seems advisable for companies to take appropriate precautions.

Focus on working time recording

In our thematic focus “Working time recording according to the Federal Labor Court“, we deal with the legal and practical structure of working time recording according to the latest European and supreme court rulings. So far, this series has included a presentation of the ECJ ruling on working time recording, the subsequent ruling of the Federal Labor Court and the consequences of this case law for operational practice.