Time Tracking Obligation 2026: What Employers Need to Know

The obligation to record working time already applies

If you think the obligation to record working time will only come with a new law, think again. It already exists: in 2019, the European Court of Justice ruled (case C-55/18) that employers must set up an objective, reliable, and accessible system for recording daily working time. Germany's Federal Labour Court confirmed this obligation in 2022 (decision of 13 September 2022, case 1 ABR 22/21).

In concrete terms: start, end, and duration of daily working time must be documented – including breaks. The obligation applies regardless of company size and place of work, including home office and marginal employment.

What changes in 2026: the planned Working Time Act reform

What has remained open so far is the form of recording. This is exactly where legislators are stepping in: the planned reform of the German Working Time Act (ArbZG) provides for electronic recording of working time. The coalition agreement contains corresponding provisions, and a draft bill is expected in the course of 2026.

Based on the key points known so far from the draft:

• Electronic recording becomes the standard: Start, end, and duration of daily working time are to be recorded electronically – on the day the work is performed.
• Transition periods for smaller companies: Staggered transition periods are being discussed for SMEs; micro-enterprises may be exempted.
• Delegation is possible: Recording can be delegated to employees – but responsibility remains with the employer.
• Trust-based working time remains possible: Flexible working time models remain permissible as long as hours are documented.

Important: even without a passed law, the recording obligation already applies today. Those who wait risk fines of up to €30,000, evidence problems in overtime disputes, and conflicts with the works council.

Is Excel still allowed?

Handwritten timesheets and Excel lists are currently still formally permissible – but a bad idea for three reasons:

1. Not tamper-proof: Subsequent changes cannot be traced – a significant evidence problem in disputes.
2. Error-prone: Manual entries are forgotten, rounded, or filled in generically. Recording is then neither objective nor reliable.
3. Not future-proof: With the expected reform, electronic recording will become mandatory anyway. Companies relying on Excel now will have to switch again shortly.

Checklist: how employers implement the obligation in 2026

1. Analyse the status quo: How is working time recorded today? Where are the gaps (home office, field service, marginal employment)?
2. Choose a system: Electronic, tamper-proof, with automatic checks of breaks and rest periods. Ideally integrated into existing tools rather than a standalone solution.
3. Involve the works council: The works council has co-determination rights when introducing time tracking. Early involvement speeds up the project.
4. Clarify data protection: Time tracking data is personal data – define GDPR compliance, access rights, and retention periods. More in our article on GDPR-compliant time tracking.
5. Bring employees on board: Create transparency: it is about documentation and protection (maximum working hours, rest periods), not surveillance.
6. Connect processes: Export to payroll, overtime evaluation, reporting for compliance documentation.

The easiest path for Microsoft 365 companies

For companies already working with Microsoft Teams and Outlook, implementation does not have to be an IT project. timeghost Time Tracking is integrated directly into Microsoft Teams:

• Check-in, break, check-out with one click in the Teams app – on desktop and mobile
• Automatic verification of maximum working hours, rest periods, and breaks in line with legal requirements
• Automatic time suggestions from Teams calls, Outlook appointments, and Planner tasks
• Single sign-on via Microsoft 365 – no separate login, automatic on- and offboarding via Teams groups
• GDPR-compliant, ISO 27001 certified, data stored in the EU – and already approved in practice by multiple works councils

For a practical guide to getting started, see Time Tracking in Microsoft Teams: How to Get Started.

Conclusion: 2026 is the year to act

The recording obligation already applies, and the electronic form is approaching by law. Companies that introduce a digital system now comply with today's legal situation, are prepared for the reform, and avoid a double changeover later.

With timeghost Time Tracking, legally compliant work time tracking is set up in minutes – install it directly from the Microsoft Teams Store and try it free for 14 days.

Sources and further information

• ECJ, judgment of 14 May 2019, case C-55/18 (CCOO v Deutsche Bank)
• Federal Labour Court (BAG), decision of 13 September 2022, case 1 ABR 22/21
• Draft bill of the German Federal Ministry of Labour on amending the Working Time Act
• German Working Time Act (ArbZG), in particular sections 3, 4, 5, 16
• Work time tracking with timeghost Time Tracking

Related articles

• Working Time Recording: What the ECJ Ruling Means for Companies
• GDPR-Compliant Time Tracking: What Companies Need to Know
• Overtime Management & Compliance: Keeping Time Tracking Legally Sound

This article is for general information purposes only and does not constitute legal advice. For a binding legal assessment, please consult a specialised lawyer. Content has been editorially reviewed. As of: August 2026.