Germany to Require Digital Clocking for All Staff by 2027 as Working-Time Overhaul Is Pushed to Autumn

The clock is ticking for every German employer: starting 1 January 2027, all companies will be legally obliged to record their employees’ hours electronically. The mandate is one of the few concrete measures already decided as part of a broader reform package that the government presented on 2 July, even as the centrepiece—an overhaul of the Working Time Act itself—was pushed to the autumn amid deep disagreement within the coalition.

Under the proposal from Labour Minister Bas, whose draft surfaced on 3 July, the traditional eight-hour day would stay on the books as the baseline. Deviation would only be possible through collective wage agreements, and even then the weekly average could not exceed 48 hours over the year. The requirement for mandatory electronic timekeeping applies across all sectors, regardless of whether a company uses collective deals.

Weekly limits, union anger

Chancellor Merz used a televised statement on 2 July to reaffirm his goal of switching from a daily to a weekly maximum working time—a pledge written into the coalition agreement. He insisted the fundamental rewrite of the law would be tackled after summer consultations. Labour Minister Bas, however, cited strong opposition from trade unions as a reason for her cautious timetable.

That opposition was on full display. On 2 and 3 July, both the DGB and ver.di came out forcefully against any weakening of the eight-hour rule. They promised protests and used their federal congress to underline the importance of existing protections. A study by the Economic and Social Sciences Institute backs up their scepticism: 75 per cent of employees fear negative consequences from greater flexibility.

Labour scientists warned that, given current workloads, the debate should instead focus on shortening the working day. The Hugo Sinzheimer Institute calculated that, if only the weekly limit were considered, theoretically 73.5 hours could be worked in a single week.

Sunday openings, sick notes reformed

For all the controversy over working hours, the government did finalise several changes on 2 July. Bakers and confectioners may now open for up to eight hours on Sundays, and libraries for up to six hours.

Sick-leave rules are also being tightened. The phone-based sick-note option is scrapped entirely. Instead, from day one of illness, employees must obtain a certificate of incapacity. Merz clarified that this does not necessarily mean a physical doctor visit on the first day. Health Minister Warken pointed to the increased use of video consultations as an alternative.

A €10bn package with a wealth-tax twist

The full reform package contains 34 separate measures and carries an estimated total cost of around €10 billion. To help finance it, the government plans to raise the top income-tax rate from 2027: 45 per cent on earnings above €250,000, and 47 per cent above €280,000. In addition, the state-owned development bank KfW will transfer €500 million annually to the federal budget in both 2027 and 2028.

The administration is aiming for economic growth above 1 per cent in 2027, betting on labour-market flexibility combined with tax relief for low and middle incomes. Leading economic institutes reacted with scepticism, questioning whether the measures are sufficient to pull the economy out of its slump. The cabinet will revisit the plans on 6 July as part of the 2027 budget deliberations.

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