German Workers Face Up to €400 Monthly Back Pay After EU Travel-Time Ruling

A recent European Court of Justice decision has thrown Germany’s construction, cleaning and care sectors into financial uncertainty, with employers potentially facing back-pay claims of up to €400 per month for each affected worker. The ruling, issued on October 9, 2025 (Case C-110/24), clarifies that travel time for employees who are collected from a central point and driven to changing work sites counts as working time under EU health-and-safety law.

The distinction matters because German national law still governs whether those hours must be paid. That gap creates a problem when the effective hourly wage — calculated by dividing pay by total hours including travel — falls below the minimum wage. From January 2026, Germany’s statutory minimum rises to €13.90 per hour. An employee who works 7.5 paid hours but spends 80 minutes daily commuting to shifting locations would see their effective rate drop to €11.81, triggering monthly back-pay obligations of up to €400.

Around 1.8 million workers in construction and building cleaning, 130,000 landscape gardeners and 450,000 mobile care staff are directly affected, according to 2024 data. Legal experts note that the ruling puts mounting pressure on the Federal Labour Court’s long-standing “burden theory,” which had allowed employers to treat unpaid travel time as a worker’s own responsibility.

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Tax-Free Overtime Plan Draws Fire Over Part-Time Exclusion

Alongside the travel-time clarification, the government is pushing through the Labour Market Strengthening Act, drafted on September 12, 2025. The bill would make overtime bonuses of up to 25 percent of base pay tax-free — but only for full-time employees. Under the proposal, full-time status kicks in at 34 hours per week for workers covered by collective agreements, and at 40 hours for everyone else.

Critics point out that roughly 30 percent of all employed people in Germany work part-time, including nearly half of all women. Those workers would see no benefit from the tax break. Data from the Institute for Employment Research (IAB) shows that in 2024 the average employee logged 28.2 overtime hours annually, of which only 13.1 were paid.

A separate draft amendment to the Working Hours Act would mandate electronic recording of daily start, end and duration of work — even for trust-based working-time models. Micro-businesses with up to ten staff and senior executives are exempt. Larger companies would get transition periods of two to five years.

Union Warns of Health Risks as Weekly Hours Model Looms

The Food, Beverages and Catering Union (NGG) Rhein-Main has voiced sharp criticism of the reform package. It fears the government is softening the eight-hour day in favour of a weekly-hours calculation, which could normalise 12-hour shifts. Accident statistics show the risk of injury doubles after twelve hours of continuous work, the union argues, raising concerns about both health and work-life balance.

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The importance of airtight time records is not just a German issue. In Austria, tax authorities demanded millions of euros in back payments from the Innsbruck and Vienna Higher Regional Courts for the period 2021 to 2025, after the authorities changed their interpretation of tax-free overtime lump sums. Without concrete proof of hours worked, the courts could not justify the tax exemptions. The Austrian legislature also amended the law in 2025 to create a legally secure framework for tax-free bonuses paid to full-time staff.

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