Compliance and recording working time: postponed does not mean canceled.

 BMAS postpones digital documentation – however, companies need to remain proactive.

Tobias Vößing

Compliance and recording working time: postponed does not mean canceled.

The Federal Minister of Labor, Hubertus Heil, has postponed the new regulations governing stricter timekeeping obligations for the time being. Nevertheless, the judges of the European Court of Justice have stated that companies are already required to utilize timekeeping systems to document and monitor working time (Ref: C-55/18). What do HR managers need to do now?

Proposed legislation: Daily working hours always documented immediately and digitally

According to the proposed legislation regarding “changes to marginal employment” put forward by the Federal Minister of Labor, Hubertus Heil, eleven industries including construction, building cleaning, and freight carriers, along with the hotel and restaurant industry, will be required to record both the duration and end of each working day electronically, and in a tamper-proof manner as of October. This has to be documented on the same day as the work itself, and the start of work must be documented immediately. Companies face the risk of fines in the event of violations. The proposal triggered massive criticism from industry associations, which saw themselves facing difficult legal and technical problems. Although the companies have to record the employees’ working hours in accordance with Section 17 of the Minimum Wage Act, they do not necessarily have to do so electronically. The Federal Ministry of Labor has presently postponed these plans for digital timekeeping.

Development of a free digital solution for employers?

Instead, the Federal Ministries of Labor, Social Affairs and of Finance intend to jointly examine options for digitally implementing timekeeping without placing excessive burdens on small and medium-sized companies, in particular, by forcing them to purchase digital timekeeping systems. The development of a digital application that can be made available to employers free of charge is being considered.

ECJ requires member states to introduce working time documentation

Nevertheless, employers need to use this grace period to take action. The European Court of Justice (ECJ) ruled that member states are required to introduce working time documentation in 2019. Oriented on this ruling, German case law also requires employers to implement a timekeeping system. A paper-based system does satisfy the Luxembourg judges, provided that it is objective, reliable and accessible. However, the accelerated rate of digitalization in response to the corona pandemic has now clearly demonstrated that electronic timekeeping is the more efficient approach. Consequently, it is also more advantageous for employers provided that the legal requirements are both practical and allow adequate time for implementation.

Act now and involve the works council

The free application proposed by the Federal Minister of Labor, Hubertus Heil, and the Federal Minister of Finance, Christian Lindner, will not be the optimum solution for every employee and company. In this respect, supervisors and HR managers need to take proactive action and obtain a clear overview of the suitable digital systems capable of recording the working time of all employees – including those at the office and those working from home or at customers. This applies even more so to companies who need to involve the works council pursuant to Section 87 (1) no. 6 of the Works Constitution Act (BetrVG), and need to schedule this involvement into their planning.

Caution with data protection

Digital records of working hours represent personal data. Therefore, they require special protection, such as against hacker attacks. Particular caution is also required because this information is also fundamentally suitable for monitoring employees on the basis of their movement profiles. However, using the data for this purpose violates the principle of limitation to a specific purpose pursuant to Art. 5 (1b) of the General Data Protection Regulation (GDPR): Accordingly, the timekeeping data may only be used for the specific purpose of recording working time. As a result, the records of a locking system in an office or production building may not be used to monitor working hours. In principle, employers may freely decide on how to determine the working time. Yet, as we have already reported, the Berlin-Brandenburg State Labor Court time has ruled that recording working time via biometric fingerprint, for example, is not permissible without the employees’ consent. Last but not least, the data storage itself requires particular attention: Personal data must be deleted after termination. As a rule, a two-year retention period is regarded as permissible if the data is needed for court proceedings, for example.

One thing is clear: Digitally working time will become mandatory. After all, the ECJ judges have already imposed this obligation on German lawmakers. Companies need to act now in view of compliance and in order to avoid facing fines. This leaves companies with plenty of time to find the solution that suits their specific needs, complies with data protection law and is also practical. A solution which covers both mobile work from home, as well as work at the customer’s premises. Acting now also allows sufficient time for co-determination.