Germany’s move to mandatory electronic time tracking from December 2025 marks one of the most significant labour law shifts in recent years, with direct implications for global payroll, mobility, and HR operations. The new requirement obliges all employers—regardless of size—to record start times, end times, breaks, and overtime digitally, reshaping compliance expectations for multinational organisations operating in Germany. 

Germany hamburg lnscp

Why This Change Happened 

Germany’s shift toward compulsory digital time recording is the result of several converging legal and regulatory developments. A pivotal moment came with the 2024 ECHR Stegmann case, which highlighted the need for precise working time data to protect employee wellbeing and ensure compliance with working time limits. This created strong momentum for more structured and transparent time tracking practices. 

The decisive clarification arrived in December 2025, when the Federal Labour Court (Bundesarbeitsgericht, BAG) ruled that all working hours—not only overtime—must be captured electronically. This obligation applies universally, including to small employers. Alongside ongoing legislative discussions and draft proposals from the Federal Ministry of Labour and Social Affairs (BMAS) throughout 2025, it became clear that Germany was moving toward a fully standardised digital framework for working time compliance.

What Employers Must Now Record 

From December 2025, employers must electronically capture: 

  • Start time of daily working hours
  • End time of daily working hours
  • Breaks and rest periods
  • Overtime hours 

The BAG ruling requires a systematic, reliable, and accessible method for recording total working hours. Employers must also establish a clear internal procedure and communicate it effectively to employees. 

Who Is Affected? 

The requirement applies to: 

  • All employers, regardless of size or sector
  • All employees, including parttime, remote, mobile, and hybrid workers
  • Foreign employers with staff working in Germany
  • Global mobility populations, such as secondees and cross border commuters

This universality means global organisations must ensure their time tracking systems are consistent across German entities and compliant with local expectations. 

Implications for Global Payroll 

For payroll teams, the shift to mandatory digital time tracking brings several operational impacts. 

Greater accuracy in pay calculations 
Electronic data reduces errors in overtime, shift premiums, and break deductions. 

Improved audit readiness 
Digital records support compliance with the Working Time Act (Arbeitszeitgesetz) and reduce risk during inspections. 

Integration demands 
Payroll systems must integrate seamlessly with time tracking tools to ensure automated data flow, reduced manual intervention, and consistent reporting across jurisdictions. 

Increased transparency 
Employees gain clearer visibility into their hours, which may reduce disputes and improve trust. 

Implications for Global Mobility

For mobility teams managing employees on assignment in Germany: 

  • Host country compliance becomes essential. Even short-term assignees must be included in digital time tracking systems
  • Cross border workers must record hours electronically when working in Germany
  • Assignment policies may require updates to reflect new documentation expectations
  • Tax and permanent establishment considerations may be influenced by more accurate work pattern data

Implications for HR and Workforce Management 

HR teams will need to: 

  • Update employee handbooks and policies
  • Train managers and employees on new processes
  • Ensure systems accommodate flexible and remote work
  • Monitor compliance and intervene when patterns suggest risk
  • Align time tracking practices with health and safety obligations 

The change also supports broader HR goals such as wellbeing, burnout prevention, and workforce planning. 

Why This Matters for Global Organisations 

Germany is one of Europe’s largest labour markets, and its regulatory shifts often influence broader EU trends. For multinational employers, this change: 

  • Sets a new benchmark for working time compliance
  • Signals a move toward greater digitalisation of labour law enforcement
  • Highlights the importance of accurate, real-time workforce data
  • Reinforces the need for integrated global payroll and HR systems 

Germany – Global Insights 

For further detailed guidance on payroll, employment law, and compliance in Germany, visit our Germany Global Insights on the activpayroll website. 

Next Steps 

If you would like to understand how this minimum wage change may impact your payroll, mobility, or HR policies, please get in touch. Complete our Contact Us form, and a member of our expert team will be happy to assist with your queries. 

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