German Small Businesses Push Back Against Mandatory Electronic Time Logs Set for 2027
Published on 07/03/2026 at 12:31 | Redaktion boerse-global.de
Germany’s planned electronic time-tracking requirement is drawing sharp criticism from the country’s powerful crafts sector, as employers brace for a new wave of bureaucracy. The Central Association of German Crafts (ZDH) warned in July 2026 that daily digital recording of working hours would disproportionately burden small enterprises. The association is demanding far more flexibility from policymakers.
The obligation itself stems from a September 2022 ruling by the Federal Labour Court (BAG), which effectively made time recording compulsory. Now the government is hammering out the details. A draft bill under discussion would require companies to document the start, end and duration of work electronically — though current law does not yet mandate a digital format. Experts anticipate a legal requirement by 2027, with a particular focus on so-called audit trails: systems that make any corrections to time entries tamper-proof and fully traceable.
Employers may delegate the actual recording to their staff, but the ultimate responsibility stays with the company.
Ultimate responsibility for compliance applies in health and safety too, where missing risk assessments or safety documents can lead to substantial fines. A free toolkit provides ready-to-use risk assessments, checklists and toolbox talks to help UK employers meet their legal duties. Download the free Health & Safety Toolkit
Penalties climb as high as €30,000
Violating the recording obligation can trigger fines of up to €30,000. Companies must log start, end, breaks and overtime — including for employees working from home. Records must be kept for two years.
The tax side is tightening as well. Starting with the 2025 assessment period, the tax office demands detailed time records for anyone claiming the home-office flat-rate allowance. Since January 2026, a uniform distance allowance of 38 cents per kilometre has applied, but workers can claim only one of the two allowances per working day.
Coalition talks on flexibility remain stuck
The Federal Association of Business Law Firms has also entered the debate, proposing a shift from daily to weekly maximum hours and calling for exemptions for high earners earning at least €150,000 a year. The coalition agreement already envisions some flexibilisation, yet labour scientists warn that the daily limit is essential for protecting employee health. Chancellor Friedrich Merz has signalled a decision by summer 2026.
Beyond time tracking, the Health & Safety at Work Act 1974 imposes its own compliance demands on UK employers. A free toolkit with 9 tools — including risk assessments, checklists and a directors' liability guide — helps you stay on the right side of the law. Download the free Health & Safety at Work Act Toolkit
Digital time-tracking market heats up
The looming mandate is fuelling demand for digital time-recording solutions. Numerous apps targeting small and medium-sized enterprises are available, most charging a monthly fee per user. Prices range from free basic versions to more than €7 per employee. Employers selecting a tool should ensure it complies with the General Data Protection Regulation (GDPR) and offers audit-proof revision security. Some providers offer local data storage with no ongoing costs.
Workers have a further right under Article 15 of the GDPR to request information about their recorded working hours at any time — a provision that may gain practical relevance once electronic logging becomes the norm.
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