German Craft Firms Face Retroactive Pay Claims as EU Court Rules Travel Time Is Work
Published on 07/17/2026 at 14:18 | Redaktion boerse-global.de
Small and medium-sized trades businesses in Germany are scrambling to recalculate payrolls following a European Court of Justice decision that classifies employer-ordered group travel as paid working hours. The ruling, combined with a rising minimum wage and a pending mandate for digital time-keeping, threatens to trigger significant retroactive wage claims.
A new draft law from the labour ministry, expected this autumn, may loosen Germany’s strict weekly hour caps—but only for unionised firms, according to Chancellor Merz’s mid-July announcement. A June draft from Labour Minister Bas had floated similar flexibility primarily for tariff-bound companies. The political push aims to align regulations with modern, mobile work patterns.
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Court Ruling Resets the Clock
On the judicial front, the European Court of Justice settled a long-running dispute in autumn 2025 (Case C-110/24). Where an employer designates the departure point, start time, and vehicle for a shared journey from a company hub to various job sites, judges ruled that this travel qualifies as full working time. Workers cannot freely dispose of that period. The ruling directly affects crafts, construction, cleaning services, field sales, and home-care sectors. The ordinary commute from home to a fixed workplace remains outside working time.
Minimum Wage Pressure
Since the start of 2026, Germany’s statutory minimum wage has stood at €13.90 per hour. The effective hourly pay must not fall below that threshold. If travel time was previously uncompensated, employers may face substantial back-pay demands. Calculations show that 90 minutes of daily travel not factored into pay can generate roughly €20 in additional daily entitlements—depending on the original wage structure.
Contractual clauses that flatly exclude compensation for travel time are now largely void under current case law. The standard three-year statute of limitations applies, ending at year’s close, though individual exclusion periods in employment contracts can shorten the window for claims.
Digital Time Recording Becomes Law
A 2022 landmark ruling by Germany’s Federal Labour Court already obliges employers to document the start, end, and duration of daily work hours. A new draft law now pushes systematic electronic recording. Implementation timelines vary by company size:
- Firms with under 50 employees receive up to five years to comply.
- Larger businesses must switch within one to two years.
- Micro-enterprises with ten or fewer staff are exempt from purely electronic formats but must still keep records in some form.
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Home-Office Lunch Breaks and Trucking Logs
Insurance coverage for accidents is also evolving. Decisions handed down by the Hesse State Social Court in spring 2026 show that trips to get lunch while working from home can be covered by statutory accident insurance—provided a tight business schedule or set break rules restrict the employee’s free choice. Where workers have fully flexible time, that protection typically falls away.
Separately, since early July, cross-border freight operators face fresh compliance demands. All vehicles above 2.5 tonnes must now carry a second-generation digital tachograph. The only exception is for internal works transport (Werkverkehr)—provided driving takes up less than 30% of monthly working time and is not the employee’s primary duty.
For the thousands of German craft businesses that dispatch teams from a central yard, the message is clear: the old practice of treating travel as a free cost buffer is no longer legally viable. With back-pay claims, electronic time tracking, and a higher minimum wage all converging, a comprehensive overhaul of wage calculations is no longer optional.
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