Germany Plans Weekly Work-Hour Caps and Mandatory Digital Time Clocks in Major Labour Overhaul

A broad package of labour-law changes set to take effect in 2027 is drawing sharp lines between business groups and unions. At its core, the reform replaces the current daily maximum working time with a weekly limit, while simultaneously introducing a legal requirement for employers to record hours electronically.

The fiercest objection comes from the German Trade Union Federation (DGB). Citing surveys, it says 72 percent of employees do not want to work more than eight hours a day. The union body warns that allowing longer daily shifts, as long as the weekly average stays within 48 hours, will erode work-life balance.

Employers see the opposite. The German Hotel and Restaurant Association (Dehoga) has long called for exactly this flexibility to manage seasonal peaks. Dr. Jörg Brückner, president of the Confederation of German Employers' Associations, pointed to OECD data showing that Germans worked an average of only 1,300 hours per year in 2025—among the lowest in the developed world. He also noted that the part-time employment rate jumped from 16 percent in 2000 to 35 percent in 2025, arguing that high marginal tax rates discourage extra hours and that red tape must not increase.

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Chancellor Friedrich Merz has taken personal ownership of the reform. In mid-July 2026 he clarified his vision for a more flexible maximum-hours system, just as the Labour Ministry presented details on the mandatory electronic time-tracking regime.

The key structural change: instead of capping daily hours at eight—or ten under certain conditions—the new rule would permit longer single days provided the 48-hour weekly ceiling is respected. An earlier draft from Labour Minister Bärbel Bas, dated 18 June, had limited this flexibility to companies with collective-bargaining agreements. Merz insisted on widening it to all businesses, and the compensation period was shortened from six to four months.

Digital time tracking, with phased compliance

Alongside the hours reform, a separate draft from the Federal Ministry of Labour and Social Affairs (BMAS) on 17 July would oblige employers to digitally record the start, end and duration of daily working time.

Transition timelines are staggered:
- One year for all companies
- Two years for businesses with fewer than 250 employees
- Five years for those with fewer than 50 employees

Micro-enterprises of up to ten staff may be exempt from the electronic format. So-called "trust-based working time" would remain legal in principle, but the employer would still be responsible for monitoring compliance with the maximum-hour limits.

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Additional changes arriving from 1 January 2027

The coalition is also advancing several other measures:

• Fixed-term contracts: Fixed-term employment without a specific reason will be allowed for up to 48 months, with up to six renewals. The rule is limited to the end of 2030.
• Written-form requirement: Employment contracts will no longer need a handwritten signature to be valid.
• Sick notes: A doctor’s certificate from the first day of illness will become the statutory default.
• Partial retirement: The minimum entry age for Altersteilzeit rises from 55 to 58, and the "block model" is under review.

One surprise element: bakeries would be permitted to open for up to eight hours on Sundays. However, shop-opening hours fall under state jurisdiction, and Bavaria has already announced opposition. Whether the national rule will take effect remains unclear.

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