The ECJ makes digital time recording mandatory

In September 2022, the Federal Labor Court (BAG) in Erfurt issued a judgment of great importance. According to file number 1 ABR 22/21, it was clarified that all employers are required to implement a system for documenting their employees’ working hours in accordance with Section 3 Paragraph 2 No. 1 of the Occupational Safety and Health Act (ArbSchG). It is noteworthy that the BAG explicitly refers to a previous decision by the European Court of Justice (ECJ) regarding the obligation to record time in the justification of its judgment.

The context of the ECJ ruling

In May 2019, the ECJ had already issued a fundamental ruling stating that all companies in the European Union must implement systems with which employees can record their working hours. However, the specific design of these systems was left to the individual member states. Due to the corona pandemic and the federal election scheduled for fall 2021, this ruling was not initially implemented into national law in Germany. There are exceptions for small businesses. It is planned that anyone who employs fewer than 10 employees will be exempt from the obligation to record their working hours electronically.

What does this mean for companies?

These rulings result in a clear obligation for companies to introduce systems for recording employees’ working hours in their companies. According to the ECJ, the recording of working time must be reliable, objective and easily accessible. Although the use of electronic systems is not explicitly required, the system must be audit-proof and practical for employees.

Current developments

A draft law from the Ministry of Labor has been available since April 13, 2023, which stipulates the use of electronic time recording systems in response to the judgments mentioned. This bill still needs to be passed by the Federal Cabinet and the Bundestag in order to become valid. Nevertheless, companies are already obliged to implement appropriate systems based on the aforementioned Section 3 Paragraph 2 No. 1 of the Occupational Safety and Health Act. It is not enough to simply provide the systems; employers must actively ensure their use.

Why is electronic time recording essential for companies?

In short: The introduction of a digital time recording system brings significant advantages for employers and employees compared to the traditional paper method. Digital handling can significantly minimize the administrative effort.

What is recorded?

The start of work, the end of work, break times, rest times and the entire working time must be documented. A time recording system makes it possible to transfer the collected data directly into a payroll and accounting system. If necessary, this can be supplemented by additional interfaces to a project management tool. Of course, the system must be designed in such a way that neither unauthorized access nor data loss is possible.

Transparency and legal certainty

Transparency and legal certainty are guaranteed for you as an employer and for your employees. If there are any uncertainties, for example in payroll accounting, the stored data can be used at any time to check the working hours worked.

Resource planning and project management

In addition, digital time tracking enables precise checking of the workload for completed projects. Based on the existing data, resource planning for future projects can be carried out much more precisely.

Trusted working hours remain intact

In discussions about working time recording, people often fear the end of trust-based working hours. However, this concern is unfounded. Trusted working hours mean that the employer does not specify fixed times for the start and end of work, but only the daily length of work. Digital time recording provides more precise evidence of compliance with agreed working hours.

Self-organization and optimization

Since employees have access to their recorded data at any time, digital time recording also becomes a tool for self-organization and optimization. This means that each employee can easily check how much time it took them to complete certain tasks.

Which working time recording system is available to companies?

Digital time recording has established itself as an indispensable tool in the modern working world. But what variants are there and how can the recording of daily working hours be optimally used?

Stationary terminal

A stationary terminal serves as a central point of contact for time recording and is often placed at the entrance to a company or department. It works similarly to a traditional time clock and is ideal for manufacturing plants or business areas where employees need to be physically present.

Web browsers and desktop apps

For office workplaces and home offices, time recording via a web browser or an installed desktop app is ideal. This method is particularly practical when the work computer is connected to the company’s software system online.

Mobile apps

Mobile apps for time recording are suitable for employees in the field or at decentralized locations who are not constantly connected to the company network. Time recording via app allows working hours to be recorded and documented flexibly and regardless of location.

Ease of use and automation

In most digital time recording systems, handling is extremely easy. No manual entries for login, logout or breaks are required. Instead, a clock runs in the background that already takes statutory break times into account. A simple click on a button is enough and the system automatically registers the time and the employee.

Transparency for employers and employees

All users have access to their personal employee account. This means you can see your current status of overtime or minus hours at any time. Employers also have the option of setting individual regulations such as core working hours or maximum number of overtime hours. In addition, you can check in real time which employees are currently clocked in.

How digital time recording minimizes the challenges of recording working hours

Recording working hours is a critical part of everyday business life, but it can often lead to errors and ambiguities. In this article, we explain how digital time tracking systems effectively address these issues.

Susceptibility to errors in the paper form

Classic time recording on paper is not only cumbersome, but also prone to errors. Manually, hours worked and all other data must be recorded later in payroll, which can lead to inaccuracies, especially if entries are made late or from memory.

Simplicity and accuracy of digital time tracking

In contrast, digital time recording enables precise and uncomplicated recording of working hours with just one click. This data is automatically saved in the employee account and sent directly to payroll, without the need for any manual steps.

Flexibility and mobility

Digital time recording systems are flexible and can be used on the go via mobile apps. This is particularly useful for employees in the field or at remote locations.

Transparency and data security

Digital storage of working hours creates transparency for employers and employees. Both parties have access to the data at any time, which is stored securely and cannot be manipulated. This ensures both data security and data protection.

Project-related working time recording

The ability to record project-related working times makes it easier to evaluate the workload for ongoing and completed projects and supports resource planning for future projects.

Compliance with legal requirements

Last but not least, digital time recording helps companies comply with legal requirements. The data is available at any time for reporting, billing or auditing and is already in a digital format that does not require manual transmission.

Why digital time recording is essential for companies

Digital time recording is more than just a trend; it is a necessity that offers numerous advantages for companies. In this conclusion we summarize the most important points.

Legal compliance

By using a digital time recording system, companies not only meet existing legal requirements, but are also prepared for future legal changes. The system ensures compliance with the ECJ’s requirements regarding reliability, objectivity and easy accessibility of the recorded data.

Versatile features

Digital time recording systems offer a number of functions that make it easier for employees to record their own time:

• Easy recording of working times and breaks
• Automatic calculation of actual working hours
• Overtime management
• Applying for vacation is easy
• Flexible check-in and check-out via various devices

Payroll support

The systems make payroll accounting easier by providing prepared data that can be further processed directly. Integration with project management tools also enables project-related working times to be easily calculated and compensated.

Error minimization

Digital time recording reduces the risk of errors that can occur with manual recording and data transfer. One click is enough and the system automatically records the time.

Transparency and data security

The system offers complete transparency for all authorized persons and the respective employee. Data transmission is encrypted and access is only permitted to an authorized group of people.

Digital working time recording not only simplifies the management of working hours, but also minimizes errors and ensures legal certainty. With upcoming regulatory changes, now is the ideal time to implement such a system in your company.