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’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.
From December 2025, employers must electronically capture:
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.
The requirement applies to:
This universality means global organisations must ensure their time tracking systems are consistent across German entities and compliant with local expectations.
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.
For mobility teams managing employees on assignment in Germany:
HR teams will need to:
The change also supports broader HR goals such as wellbeing, burnout prevention, and workforce planning.
Germany is one of Europe’s largest labour markets, and its regulatory shifts often influence broader EU trends. For multinational employers, this change:
For further detailed guidance on payroll, employment law, and compliance in Germany, visit our Germany Global Insights on the activpayroll website.
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