According to the BAG, the legal obligation for employers to introduce a working time recording system stems from Section 3(2) No. 1 of the German Occupational Health and Safety Act (ArbSchG), which stipulates that employers must enable "suitable organization" and provide the necessary means for this. In the background to this BAG decision is a landmark decision by the European Court of Justice (CJEU) in 2019, according to which all EU member states are required to oblige all employers to introduce an "objective, reliable, and accessible system" that documents the work performed by their employees (CJEU, C-55/18).
Call to action for employers
Employers do not need to go into panic mode, but equally, they should not wait for the legislator to pass a new law.
Employers who do not have a working time recording system in place should begin the process of implementing such a system to record start and finish times, the total duration of daily working time, and breaks.
For employers who already have a working time recording system in place, the focus should be on the possible need to adapt the system to meet the new requirements. Employers can choose any form of working time recording system, be it manual or electronic.
Time recording can be delegated to employees, but the employer remains responsible for establishing and running the working time recording system. Correct use of the system by employees should therefore be monitored regularly.
Companies with a works council must involve it in decision-making around the arrangement (the “how”) of the working time recording system.
Introducing a working time recording system and employee data protection
Regardless of the means of time recording ‒ whether through an app, software, or an Excel spreadsheet ‒ such time records are considered personal data under the General Data Protection Regulation (GDPR) and the Federal Data Protection Act (BDSG) and must therefore be handled in accordance with data protection principles.
When considering the introduction of a working time recording system, employers should also consider the data protection compliance of such a system. Employers planning to use electronic working time recording systems are advised to use providers based in Germany or the European Economic Area, as cloud-based solutions operated by providers in third countries may not guarantee a comparable level of data protection from a European perspective.
In the course of adapting existing working time recording systems or introducing new systems, employers should review and reconsider authorization concepts. Only a limited group of selected employees should have access to employees’ time records.
According to the principle of purpose limitation under Article 5(1)(b) of the GDPR, employees’ time records should only be used for the purpose of time recording and may not be used for other purposes within the company.
Employers should be sure to only process data required for the purpose of complying with their time recording obligations according to the new BAG decision. The working time recording system must be configured in such a way that no additional data is collected from employees.
Data should only be stored for as long as needed for the specific purpose of time recording. Storing data for longer is possible in case of existing statutory retention obligations, for example, regarding overtime, which must be retained for at least two years (Section 16(2) of the ArbZG).
Employers and the German legislator are expected to act in response to the BAG’s decision on the recording of working time. The Federal Ministry of Labour and Social Affairs (BMAS) has already announced its intention to present a draft bill to include the obligation to record working time in the Working Time Act in the first quarter of 2023.
Employers are advised to be proactive and rethink their timekeeping measures before the new law enters into force, as the new case law of the BAG’s decision is binding with immediate effect.
Client Alert 2023-011