Work Time Recording: What Applies? What’s Coming? How Do You Implement It in SAP HCM?
Working time recording is undergoing profound change, from the previous legal situation to the latest draft legislation. In this article, we take a look at the key points that are important for employers and employees alike:
- Legal situation to date
- Case law
- Current legal situation
- Draft law
- Compensation
- Practical tips for future implementation in SAP HCM
- Conclusion
Legal situation to date
Working hours are a central part of our everyday working life and there are clear regulations that employers and employees must observe. Here are some key points that are important in terms of recording working hours and complying with legal requirements:
- General obligation to record working hours over eight hours
- Inclusion of marginal employees
- Part-time employees are also subject to the time recording obligation regardless of the number of hours they work. This underlines the equal treatment of all employees with regard to the documentation of their working hours
- Maximum permitted working hours, breaks and rest periods
- Compliance with the maximum permitted working hours is crucial to protect the health and well-being of employees. In addition, break and rest times must be strictly observed to ensure optimal working conditions. The legal requirements for these times are clearly defined and should be respected by employers and employees alike.
Precise documentation and compliance with these requirements are not only legal obligations, but also help to create a good work-life balance and improve working conditions for everyone involved.
Jurisdiction
The handling of working hours and their legal requirements are repeatedly the focus of court rulings. Two landmark decisions underline the importance of working time recording and its legal implications:
- ECJ, May 14, 2019: Request to the legislator
The ECJ ruled that employers must provide their employees with an “objective, reliable and accessible system for recording work”. However, this decision is primarily interpreted as an invitation to the legislator. It suggests that the creation of clear legal regulations on working time recording is necessary to ensure uniform and fair implementation. - BAG, September 13, 2022: Obligation to record working hours from the Occupational Health and Safety Act
The BAG reaffirmed the relevance of recording working hours. It stated that a general obligation to record working hours already results from the Occupational Health and Safety Act. According to Section 3 (1) and (2) ArbSchG, the employer is obliged to take the necessary occupational health and safety measures. This also includes suitable organization, the provision of necessary resources and precautions to ensure that these measures are observed.
These rulings make it clear that the legal requirements for working time recording are becoming increasingly precise. Employers are required not only to react to existing laws, but also to proactively implement systems for recording working hours in order to ensure compliance with legal requirements.
Current legal situation
The current discussions focus on the obligation to record working hours, which the Federal Labor Court (BAG) has confirmed as already existing. Despite this clear position of the court, there is one decisive limitation: due to the lack of clear legal regulations, there is currently at least no clear basis for fines in this context.
It remains to be seen whether the legislator will react to this legal loophole and establish clear sanctions for non-compliance with the obligation to record working hours. In the meantime, employers are urged to take the existing obligation to record working hours seriously and to keep a close eye on possible developments in this area. Once again, it is clear how important it is that legislation and case law are in harmony to ensure clear and fair implementation of regulations.
Draft law dated 18.04.2023
On April 18, 2023, the Federal Ministry of Labor and Social Affairs (BMAS) published a draft bill that provides for significant changes in relation to the recording of working hours. Here are the most important points from the draft:
- Obligation to record working hours: accurately, electronically and for each working day
- According to the draft, employers must record the start, end and duration of their employees’ daily working hours.
- The obligation to record electronically is emphasized, with various methods such as time recording devices, apps or “conventional spreadsheet programs” being considered.
- Small companies with up to ten employees are exempt from the mandatory electronic form.
- Responsibility for recording and retention period
- Recording can be carried out by the employee or a third party, but the employer remains responsible for proper recording.
- The records must be kept for two years.
- Employees have the right to request information and copies of the records.
- Deviations by collective agreement or works agreement
- Collective agreements or company agreements based on them may stipulate exceptions, such as recording in non-electronic form or a longer period for recording.
- Special exceptions apply to employees whose working time cannot be measured or determined in advance, such as managers, experts or scientists.
- Transitional regulations for the electronic form
- In the first years after the law comes into force, non-electronic records (e.g. handwritten) may suffice.
- Different transitional regulations apply depending on the size of the company.
- Fines for violations
- Violations of the record-keeping obligation can be punished with fines of up to €30,000.
- Exemptions for senior executives
- Senior executives are still exempt from the obligation to record working hours.
Points of criticism of the draft include the lack of definition of the concept of working time, particularly in relation to business trips and on-call times, as well as the lack of approaches to flexibilization and more comprehensive reforms. All parties will now be eagerly awaiting how this draft will be implemented in practice and what further discussions it will spark in the coming months.
Compensation
There are some misunderstandings in the discussion about working time recording that are worth clarifying. Here are some important aspects:
- Only applies to protective provisions under public law
The obligation to record working hours relates primarily to protective provisions under public law. This means that companies can structure their internal agreements and remuneration unchanged. - Compensation still based on the agreements
Despite the recording of working time, the remuneration of working time remains unchanged. The regulations and agreements between employers and employees remain in place. - Practical effects to be expected due to precise recording
However, the precise recording of working time can have practical effects. It enables working hours to be recorded more transparently and provides a basis for improving working conditions and processes. - Overtime clauses remain possible
Overtime clauses, for example the compensation of up to 20 hours of overtime per month with the salary, are still permitted and can be agreed individually. - Principles regarding travel times remain unchanged
The principles regarding travel time remain unchanged. Travel time within regular working hours must always be remunerated. Outside regular working hours, remuneration depends on the agreements or the circumstances. In the case of senior employees, it is conceivable that travel time may be compensated to a certain extent with the salary, even without a separate agreement.
It is important to emphasize that the recording of working hours does not necessarily lead to serious changes, but rather offers an opportunity for a more precise and transparent organization of working time models. Companies can continue to act flexibly and make individual arrangements as long as the legal principles are observed.
Transitional arrangements for the electronic form
In the midst of the current discussions around working time recording, it is crucial for companies to consider and prepare suitable procedures and media. Here are some important considerations:
- Check and prepare suitable time recording options
Companies should actively examine and prepare suitable time recording options. It is important to choose an effective system that meets the requirements of the new law. - Automatic break deduction in the time recording system is not sufficient
It should be noted that automatic break deduction in the time recording system alone may not be sufficient. It is important to ensure that the systems cover all relevant aspects of the new legislation. - No urgent need for immediate action
There is currently no urgent need for immediate action. Companies can wait and see how the discussions and the legislative process develop before taking concrete action. - Await further discussions and the legislative process
Further discussions on this first draft and the legislative process remain to be seen. It is advisable to pay attention to the latest information and react flexibly to any changes. - Take measures against unauthorized working hours
Companies should take measures to prevent unauthorized working hours. Close monitoring and adjustment of working time models can help to ensure legal compliance. - Check whether adjustments to the compensation regulations are necessary
It is advisable to check whether adjustments to the compensation regulations are necessary. A precise analysis of the current remuneration structures can reveal possible adjustment requirement
Practical tips on implementation in SAP HCM
1. How should it be done technically?
The technical implementation of working time recording requires careful examination and coordination with existing regulations. It is very important to take into account the current legal situation, works agreements and collective agreements. But how does this process work in practice, and are there any exceptions, especially for specialized working groups such as “experts”?
- Take existing regulations into account
First and foremost, companies should carefully examine the existing regulations on working time recording. These may be laid down in collective agreements or collective bargaining agreements or defined at company level. - Observe the legal situation
The current legal situation, especially with regard to the current draft law on working time recording, must be carefully considered. It is important to ensure that existing regulations comply with the legal requirements or are adapted accordingly. - Check possible exceptions for “experts”
An important aspect of technical implementation is to consider whether exemptions can be considered for certain groups such as “experts”.
2. What are your technical requirements?
Defining the scope of application is crucial when it comes to introducing working time recording systems. Here are some considerations and questions that can help companies make a decision:
- To which group of employees does working time recording apply?
The first step is to clearly define the scope of application. Which employees should be covered by working time recording? This definition can vary depending on the company structure and requirements. - A wide range of options: Excel to self-service
There are various methods of working time recording available, from traditional Excel spreadsheets to modern self-service solutions (also with SAP Fiori). Which solution do you prefer and which best meets the needs of your employees? - Evaluation of time events (infotype 2011): Sufficient or additional measures required?
The evaluation of time events (in SAP HCM infotype 2011) can be an effective approach. However, consider whether additional measures are required to fulfill all requirements for working time recording. The type of time events to be recorded is crucial. Should only standard times be recorded, or is there a need to consider more specific events such as overtime or special services? A clear definition of the time events to be recorded is essential. - Concerns and checkpoints: Work schedule rules, planned working time (IT 0007)
When implementing working time recording systems, consider the maintenance of work schedule rules and the definition of planned working time (IT 0007). A thorough review of all work schedules in SAP HCM is essential. - Correction of incorrect postings: Processes and tools
How should incorrect postings be corrected? An efficient process and clear tools for correcting incorrect entries are crucial to minimize possible discrepancies and ensure the accuracy of time recording. - Rules for time evaluation: break regulation, time account creation, time violations
A well thought-out set of rules for time evaluation is essential. Make sure that break regulations, the creation of time accounts and the handling of time violations are clearly defined and comply with legal requirements. - Time sheets: efficient and transparent design
Time tracking should be efficient and transparent. Consider how this process can best be integrated into your workflows.
The clear definition of the scope of application and the selection of a suitable working time recording method are decisive steps for a successful implementation. Take into account both the technical aspects and the individual requirements of your employees in order to establish an effective and smooth working time recording system.
3. How & who should be made aware of time violations?
Time evaluation is not only an instrumental tool, but also a way of creating transparency and clearly defining responsibilities. Here are some thoughts on time evaluation and how to deal with time violations:
- Information Sharing with Managers, HR, Employees, and Works Council
How should the information about the time evaluation be structured? Clear communication to managers, HR, employees, and the works council is crucial to create an understanding of the collected data and to promote a transparent work environment. - Presentation via ESS/MSS Reporting
The presentation of the time evaluation can be done through Employee Self-Service (ESS) and Manager Self-Service (MSS) reporting. This allows employees and managers direct access to their individual evaluations and promotes personal responsibility. - Handling Time Violations: Establish Clear Processes
How should time violations be handled? It is important to establish clear processes that define the handling of violations against working time regulations. This can range from training measures to disciplinary actions.
The time evaluation serves not only for internal control but also for creating transparency and accountability. The presentation via ESS/MSS reporting enables direct access to relevant information. At the same time, a clearly defined process for handling time violations is of great importance to ensure compliance with working time regulations.
Our Approach
If not already existing or set up at your organization, we recommend at least a SAP HCM-based positive time management “light.” This would include the customization of standard working hours and work schedule rules, as well as defined checks for working time violations identified based on time evaluations. Definitions for break rules and any accrued balances must be established for the time evaluation itself.
By recording time events/punches via Employee Self-Service, the legal obligation can be met. It is also possible to correct or subsequently record time events.
An overview of any working time violations will be identified based on the time evaluation and made available to the relevant committees clearly via Self-Service. Employees will receive a time record in their ESS certificate center at the end of the month.
Conclusion
Amid the current developments surrounding time recording, a time of change and adaptation is emerging. The recent rulings of the European Court of Justice (ECJ) and the Federal Labor Court (BAG) have underscored the importance of precise time recording and made it clear that companies should proactively respond to legal changes.
The draft bill from the Federal Ministry of Labor and Social Affairs (BMAS) dated April 18, 2023, establishes the basis for a contemporary obligation to record working hours and sets clear requirements for companies.
As the legal landscape continues to evolve, companies face the challenge of examining and preparing appropriate measures. Defining the scope, selecting technological solutions, adjusting compensation rules, and developing clear processes for time evaluation are key aspects on the path to successful implementation. Flexibility and adaptability are essential to be prepared for possible changes in legislation and the corporate landscape.
Time evaluation is not only a means of complying with legal requirements but also a way to promote transparency and accountability in everyday work. As companies look to the future of time recording, it is crucial to find a balanced approach between legal compliance and individual company requirements.
The coming months will show how the discourse develops and which practices establish themselves as leading for modern and effective time recording.
Recording
This blog article is based on a presentation at our scdsoft Information Days 2023. If you were unable to attend and are interested in the slides and recordings, you can request them here.
Disclaimer:
This blog article does not constitute legal advice but is merely an interpretation and reproduction of various statements and assessments.