German Court Expands Part-Time Overtime Pay and Parental Leave Safeguards as Debate Over Digital Time Tracking Intensifies
19.06.2026 - 16:16:59 | boerse-global.de
A flurry of legal developments in Germany is tightening employer obligations on multiple fronts – from how part-time staff are paid for extra hours to when a parent returning from leave can be dismissed. At the same time, a controversial draft law on mandatory electronic work-time recording is pitting unions against business associations and exposing cracks in the coalition agreement.
Part-time workers win equal overtime treatment
In a November 2025 ruling, the Federal Labor Court (BAG) held that employees on reduced hours are entitled to overtime premiums from the very first hour worked beyond their individual contracted time. Until now, many companies only paid such supplements once a part-timer exceeded the full-time threshold – a practice the court declared unlawful.
The decision rests on the Part-Time and Fixed-Term Employment Act. According to the court, compensation must be proportionate to working time. For works councils, the ruling creates clear oversight duties and co-determination rights when it comes to pay structures.
Staying on top of employer obligations isn’t just a German concern – UK companies that fail to keep their health and safety documentation up to date also face serious penalties. A free Health & Safety Toolkit provides ready-to-use risk assessments, checklists, and compliance templates to help you avoid fines and protect your workforce. Download the free Health & Safety Toolkit
Parental leave protection renewed for each segment
A separate judgment handed down on June 18, 2026, clarifies the rules for split parental leave. The protection against dismissal kicks in anew before each individual leave period – even if all segments were applied for in a single letter.
The case involved a father who received a termination notice in October 2024, just before a further parental leave block was due to start in November. The court ruled the dismissal void because the required approval from the state authority had not been obtained. The judges stressed that the law’s protective purpose cannot be circumvented by bundling multiple leave requests into one application.
Electronic time recording sparks political battle
Parallel to the court rulings, a draft bill from the Federal Ministry of Labor is generating controversy. Its centerpiece: a requirement for companies to digitally record the start, end and duration of each employee’s daily working time, with the aim of reducing unpaid overtime.
The draft also proposes that employers bound by collective agreements could deviate from the daily maximum hours and instead agree on a weekly ceiling. Companies not covered by a collective bargaining agreement would remain subject to the daily limit.
Business lobby groups are pushing back hard. The opposition CDU/CSU argues the draft violates the coalition agreement, which promised more flexibility for all businesses, not just those with collective bargaining coverage. Industry associations Gesamtmetall and the BVMW called the plan a “relapse into old regulatory patterns.” The SPD, meanwhile, defends the link to collective bargaining as essential for protecting workers’ rights. The ministry stresses that the text is an internal working version still subject to negotiation.
Other BAG rulings provide further clarity
Beyond the headline decisions, the court has settled additional questions in recent years:
Travel time for field service counts as paid working time. Works agreements that exclude travel under 20 minutes from compensation are invalid.
Understanding your compliance duties is key whether you are in Germany or the UK. Under the Health & Safety at Work Act 1974, UK employers must document risks and protect employees – and a free toolkit with 9 practical tools, including risk assessments and director liability guides, can help you meet those requirements. Get the free Health & Safety at Work Act Toolkit
Mandatory internships – those required as a prerequisite for enrollment in a degree program – do not entitle the intern to the minimum wage, the BAG ruled in January 2022.
Mass layoffs: any mistake in the notification to the Federal Employment Agency renders a dismissal void. The court clarified in April 2026 that the sequence of works council consultation, agency notification and actual termination must be strictly followed.
