How the EU Time Tracking Law affects your Business
EU’s Working Time Directive (2003)
The EU’s Working Time Directive regulates working time in the EU member states to ensure employees’ health and safety.
If you’re an employer in an EU member state, you need to guarantee the minimum standards regarding work hours set by the EU employment law, which include the following:
- Working time — Employees can’t work longer than 48 hours per week on average over a 4-month reference period (overtime included).
- Daily & weekly rest — Employees must have at least 11 consecutive hours of daily rest & a minimum of 24 hours of uninterrupted weekly rest.
- Breaks — Employees must be provided a break after 6 hours of work.
- Annual leave — Employees have the right to at least 4 weeks of paid leave per year.
- Overtime — Member states may allow individual employees to opt out of the 48-hour week limit (under strict conditions).
- Night work — Night workers mustn’t work more than an average of 8 hours per 24-hour period. If they perform dangerous or strenuous work, they must not work longer than 8 hours in any 24-hour period.
The purpose of the European employment law is to protect employees’ health and safety since long working hours are a major cause of stress, depression, and illness. EU countries have the lowest number of working hours per year in the world. But, shorter work time doesn’t impact the EU workers’ productivity, proving that longer hours don’t make employees more productive. So, the Working Time Directive has both the employees’ and employers’ best interests in mind. However, there’s a problem with it.
The problem with the EU’s Working Time Directive (2003)
The European working hours legislation was issued to protect employees from getting overworked.
The issue with it was it left too much wriggle room for employers to abuse it. The directive didn’t require businesses to track employee work time, which made it difficult to assess if employers truly abided by the regulations. This issue was brought to light by a lawsuit and consequently amended by the case ruling in 2019.
The EU timekeeping requirement (2019)
In May 2019, the European Court of Justice (ECJ) ruled that all employers must track their employees’ working hours. This decision was a result of a lawsuit against the Spanish subsidiary of Deutsche Bank by Federación de Servicios de Comisiones Obreras (CCOO), the Spanish trade union. The trade union wanted the bank to adopt mandatory tracking of employee work hours. At the time, Spain’s lax timekeeping laws did not require detailed record keeping of the hours worked by employees.
This led to Deutsche Bank underreporting employee hours and underpaying for overtime. Such activities violated EU labor law set out by the EU’s Working Time Directive and Charter of Fundamental Rights. The ECJ ruled that everyone must keep track of all work time (regular hours and overtime). Consequently, member states have to require employers to establish “an objective, reliable, and accessible system” for measuring daily working time. The Court has left it up to individual member states to work out the specifics of incorporating the time recording requirement into their labor laws.
Implementation of the EU time tracking requirement in member states
Many EU member states already had an explicit timekeeping requirement in their labor laws, even before the ECJ ruling, including:
Those member states whose labor laws didn’t specify any employee time tracking requirements before the ruling have been slowly introducing amendments to the law to change that. For example, in June 2021, Greece adopted a new employment law that mandates the implementation of an electronic system for employee timekeeping via digital work cards. The system must connect to the country’s ERGANI platform for employers. In Germany, the Federal Labor Court (BAG) ruled on September 13, 2022 that there is an obligation to record the working hours of dependent employees. This law’s primary goal is to protect all employees’ rights and ensure their employers are not exploiting them and that they are receiving their overtime pay. On the other hand, many are criticizing this decision, believing it will negatively impact schedule flexibility and working from home.
The prevailing opinion in legal circles is that the ruling is not in accordance with the current national legal situation. So, the 2019 timekeeping addition to the EU labor law has sparked debates in some member states. Other EU countries, such as France and Italy, still show no signs of formally implementing the ruling in their national labor laws.
Example of EU time tracking ruling implementation — Spain’s time tracking law
So, until May 2019, timekeeping in the European Union was not obligatory (unlike in the US).
Spain was the first member state to implement the new timekeeping requirement into their Royal-Decree Law in response to the CCOO vs. Deutsche Bank ruling.
The law stipulates the following:
- All companies must track their employees’ work hours, whether they are salaried or hourly workers.
- Companies must keep their employees’ time records for four years.
- Employees must be familiar with the duration and distribution of a normal workday.
- Time records must be public and available to employees, unions, and the government.
- The unions must be informed monthly of employee overtime hours.
- A record must be kept of the start and end of every working day for each employee, including breaks (even for remote workers).
Recording working hours is the responsibility of the employer and not the employee. Should there be any irregularities, the company will be held responsible. Businesses that fail to comply will face serious financial penalties. The law does not specify how employers should track employees’ work hours and attendance. In most cases, a simple clock-in/clock-out system for monitoring work time suffices.
What EU timekeeping law means for employers
As stated in the ECJ press release, EU employers must set up “an objective, reliable, and accessible system” for tracking employee time during the workday. What’s not clearly stated is what that time tracking system should look like. The EU left it up to individual member states to iron out the details. As we’ve said, some countries have implemented more detailed instructions, whereas others haven’t even acknowledged the ruling yet.
Until more specific time tracking directives are made in the latter countries, employers should focus on implementing a timekeeping system that will protect workers first. As for what is mandated, the ruling currently says employers must have a time tracking system:
- To keep track of overtime hours
- To ensure employees get their obligatory rest periods
Where the ruling is implemented, employees have an easier time winning lawsuits to compensate for overtime. Before the time tracking requirements, it was up to employees to prove to the court their overtime hours. Now, the burden of proof is on the shoulders of the employer, i.e. the employer has to disprove an alleged overtime claim. So, whether you’re in a country that has implemented the time tracking ruling or not, it’s a lot safer to invest in a time tracking system that allows you to track time accurately and objectively.
Ensuring Compliance in a Remote Work Landscape: Best Practices for EU Time Tracking
The adoption of the EU time tracking law has brought significant changes to the way organizations track and manage employee working hours. However, with the rise of remote work, new challenges have emerged in ensuring compliance with the law’s requirements such as:
- Variable Work Schedules: Remote work often allows for flexible work schedules, making it challenging to track hours worked accurately. Without a centralized system, it becomes difficult for employers to ensure that remote employees adhere to the mandated recording of their working hours.
- Time Zone Differences: With distributed teams spread across different time zones, coordinating and aligning work schedules becomes more complex. This can lead to difficulties in accurately recording hours worked and determining the appropriate time frame for breaks and rest periods, as stipulated by the EU time tracking law.
- Distractions and Interruptions: Remote work environments are susceptible to various distractions and interruptions, including household responsibilities, technical issues, or personal emergencies. These disruptions can make it difficult for employees to accurately track their working hours, potentially resulting in non-compliance with the law.
Master Time Tracking in the Remote Work Era by focusing on the following objectives:
- Clear Communication and Expectations: Establish transparent guidelines and expectations regarding time tracking for remote workers. Clearly communicate the importance of accurate record-keeping and compliance with the EU time tracking law. Encourage open dialogue to address any questions or concerns.
- Time Tracking Tools and Software: Leverage technology solutions specifically designed for remote work. Consider implementing time tracking software that allows employees to record their working hours easily. These tools can automatically track time spent on tasks and generate comprehensive reports for accurate record-keeping. For a detailed overview of the top time tracking tools available, click here to check out our blog article on the “5 Best Time Tracking Tools for Small Businesses and Companies in 2023.”
- Training and Education: Provide training sessions or resources to educate remote employees on the requirements of the EU time tracking law and how to effectively use time tracking tools. Offer ongoing support to address any challenges they may encounter.
- Regular Check-ins and Feedback: Establish regular check-in sessions to monitor progress, provide feedback, and address any issues related to time tracking and compliance. This helps foster a culture of accountability and ensures that employees understand the importance of accurate time tracking.
- Flexibility and Adaptability: Recognize that remote work requires flexibility. While the EU time tracking law sets specific requirements, it’s essential to strike a balance that respects employees’ need for autonomy and flexibility in managing their work schedules.
Time tracking benefits
A time tracking system is not just beneficial for keeping up with the laws regarding working hours in European countries.
There are numerous other benefits of timekeeping, for both employees and employers.
Some time tracking benefits for employees include the following:
- No more overtime without remuneration
- Legal Protection from abusive employers
- Saner work hours and healthier work-life balance
- Right to digital disconnection needed to truly enjoy the benefits of time-off
- No more consecutive work shifts (minimum 12-hour break between working hours)
Kimai Mobile – The Time Tracking Solution for Individuals and Companies
If you’re not sure where to start, Kimai Mobile is a great free tool that helps you keep up with the European time tracking requirement. It allows you to keep track of all work-related time, including breaks.
The easiest way for employees to report their hours online.
The detailed Kimai Mobile reports will help you make the best use of your employees’ time while complying with the EU time tracking law with ease.
DISCLAIMER: Using time tracking software doesn’t make you compliant with the EU time tracking requirement by default
Kimai Mobile allows you to set up “an objective, reliable, and accessible system” for measuring employee working time, as per the EU requirements. However, having a time tracking system does not automatically make you compliant with the time tracking law. You need to make sure you’re using the software correctly.
We advise you to consult with your legal advisor about the best way to establish a timekeeping system so that you’re compliant with the EU timekeeping regulation.