German Companies Scramble to Fix Vacation Accounting After Top Court’s Shift-Worker Ruling
Published on 07/01/2026 at 03:06 | Redaktion boerse-global.de
Shift workers across Germany are entitled to have vacation days counted only against days they actually would have worked — a principle the Federal Labor Court (BAG) has now cemented in a ruling that forces many employers to overhaul their payroll systems.
The decision, handed down on 19 August 2025 (case reference 9 AZR 216/24), squarely forbids the widespread practice of deducting leave on a simple calendar-day basis. Companies that operate shift models — particularly those involving weekend or public holiday duties — had routinely subtracted vacation days even when an employee would not have been scheduled to work. That approach violates the law, the court held.
Public holidays falling on a shift worker’s regular day off can no longer be booked as vacation time.
Retroactive Corrections Threaten Employers
The practical fallout is significant. Affected workers can demand that wrongly deducted vacation days be restored to their leave accounts. However, any claims may be limited by contractual or collective-bargaining exclusion deadlines.
Terminated employees may also benefit. In late 2025, the DĂĽsseldorf Regional Labor Court (3 Ta 216/25) examined a case involving compensation for unused vacation after dismissal. The lesson for businesses is stark: inaccurate leave records expose them to financial back-claims.
Tightening Time Recording Rules Converge
Vacation calculations are closely linked to the wider push for precise working time documentation. Since the European Court of Justice rulings in 2019 and subsequent BAG judgments in 2022, German employers have been required to record the start, end, and duration of daily work. Labor Minister Bärbel Bas has announced a new legislative draft for June 2026.
Until now, no specific recording system has been mandated — small firms especially enjoyed leeway. The obligation applies equally to home office arrangements and trust-based working time.
Travel Time Now Qualifies as Working Hours
In a parallel development, courts are sharpening the definition of working time. An ECJ ruling from 9 October 2025 established that travel from a base to an assignment site counts as hours worked when the employer dictates the travel arrangements. This affects field service, construction, and care-sector employees.
The BAG has confirmed that journeys from home to the first customer and back can be compensable when they form part of the employee’s core duties. Companies must update their time-tracking systems to reflect travel and transit time — or risk back-pay liabilities.
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