Germany Mandates Digital Time Logs as Coalition Overhauls Working-Hour Rules

Employers across Germany will soon be required to log every start, end, and break of their workers' days in electronic form, under a sweeping labor-reform package presented by the ruling coalition. The mandate, spelled out in a draft law from the Federal Ministry of Labour and Social Affairs (BMAS), responds to a September 2022 ruling of the Federal Labour Court that effectively ordered a nationwide system of time recording.

The transition will be phased. Most companies must comply one year after the law takes effect. Mid-sized firms with fewer than 250 employees get two years, and those with fewer than 50 get five. Micro-enterprises with ten or fewer staff are entirely exempt from the electronic requirement; collective-bargaining agreements can also carve out exceptions.

Holger Schwannecke, secretary-general of the German Confederation of Skilled Crafts (ZDH), attacked the plan. “The rules have nothing to do with the reality of many craft businesses,” he said. While trust-based working arrangements remain theoretically permissible, the documentation duty effectively restricts them, Schwannecke argued.

Flexibility at the core of the reform

The most consequential shift concerns how the working day is measured. Rather than capping daily hours at eight, future law will set a weekly maximum, allowing employees to distribute their time more freely across the workweek. The coalition describes the change in its “Programme for an Upswing in Employment” as a way to give businesses and workers greater flexibility.

Felix Pakleppa, chief executive of the Central Association of the German Construction Industry (ZDB), welcomed the move. Concentrating work by, say, Thursday evening would create longer weekends and match what many firms already want, he said.

Opposition came swiftly from the Church Labour Conference (KWA). Chairwoman Gudrun Nolte warned that the protective floor established by the eight-hour day was the fruit of decades of experience. “Flexibility must not become a one-way street at the expense of employees,” she said.

The IG Metall union also rejected the package, calling it a one-sided relief for employers and criticising the planned abolition of the eight-hour day.

At the same time, the reform shortens the balancing period for the weekly maximum from six months to four.

Fixed-term contracts, dismissal rules, and sick notes shift

The package, partly limited in effect until the end of 2030, includes major changes in employment law. Fixed-term contracts without a cause can run up to 48 months, renewable up to six times.

Dismissal protection is loosened for high earners. Anyone earning more than 1.75 times the contribution assessment ceiling can be let go with a severance payment and without the employer having to give reasons.

Sick-note rules tighten. A medical certificate must now be presented from the first day of illness. The pandemic-era option of obtaining a sick note by phone is abolished.

Minijobs become costlier

The flat-rate tax on mini?jobs (marginal part-time employment) rises from 2% to 5%. For a job paying the standard monthly ceiling of €603, the employer’s burden climbs from €12 to €30. Business representatives criticised the higher ancillary wage costs.

One bright spot: the tax-free thresholds for Sunday and public?holiday supplements rise from €50 to €75 per hour of base pay. A planned exemption from tax for overtime premiums for full-time workers, originally set for 1 January 2026, has yet to take effect.

Bakers and branch workers gain leeway

A relief for the baking trade: from 1 January 2027, staff can work up to eight hours on Sundays and public holidays, tripling the current three?hour limit. In Bavaria, however, state law keeps the Sunday sales window at three hours.

A recent European Court of Justice ruling clarifies mobile work. The return trip from a final job site to the depot counts as working time if the employee cannot determine the place, time, or vehicle. That directly affects daily rest?period compliance for field-service staff.

Fragmented workdays fuel overtime, study finds

Research from the Institute of Economic and Social Sciences (WSI), led by Yvonne Lott, examined the effects of broken workdays using survey data from 2019 to 2023. Fragmented schedules – time off for personal reasons followed by evening work – often produce extra unpaid hours. Instead of improving work?life balance, the pattern strengthens workers’ desire for shorter hours overall.

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