Employment Law Reform 2026:
What Employers Need to Know.
Knowledge | Juli 20. 2026
Every reform brings uncertainty and concern while it is being developed. The planned revision of the German Working Hours Act for 2026 is no exception. In this case, the main points of discussion are the move away from the traditional 8-hour working day and the introduction of mandatory electronic working time recording. However, the German Federal Government is not planning a revolution. Instead, Germany is following many other European countries in implementing the European Working Time Directive, which provides for an average maximum working week of 48 hours while allowing considerably greater flexibility.
What is meant by the Employment Law Reform 2026?
When people refer to the Employment Law Reform 2026, they are generally referring to the planned revision of the German Working Hours Act (Arbeitszeitgesetz – ArbZG). The legislation dates back in its core form to the 1960s and was last amended in 1994. Since then, the workplace has changed significantly through home working, project-based work, flexible working time and shift models, international teams and remote working. The revision, which is currently expected to come into force in 2026, is intended to bring the legislation in line with these realities. The two most significant planned changes are the introduction of mandatory electronic working time recording for most businesses and the replacement of the current maximum daily working time of 10 hours with a maximum average weekly working time of 48 hours.
What already applies to employers today?
Regardless of the planned reform, employers are already required to record working time systematically and in a way that can be verified. The European Court of Justice established this principle in 2019, and in 2022 the German Federal Labour Court ruled that the existing Working Hours Act (ArbZG) already obliges employers to do so. The planned revision therefore does not introduce a new obligation to record working time. It merely specifies how this must be carried out.
Electronic working time recording: Which data must be recorded?
According to the draft Employment Law Reform 2026, employees’ daily working hours must be recorded systematically and to the minute on the same working day. This includes the start and end of working time, the total duration of work, breaks and overtime. All records must be archived for at least two years and remain available for retrospective verification.
Working Hours Act 2026: From the 8-hour day to a weekly assessment?
The objective of the 2026 revision is to provide greater flexibility for both employers and employees while creating a legal framework that reflects how people actually work. Technically, the 8-hour working day still applies today. In practice, however, exceptions already exist: daily working time may be extended temporarily to up to 10 hours, provided that average weekly working time does not exceed 48 hours over a six-month reference period.
The proposed model replaces the daily assessment with a weekly one. The existing daily limits would no longer apply. Instead, employees could work up to 12 hours per day, while the maximum average weekly working time of 48 hours would remain unchanged.
Despite this increased flexibility, the existing health and safety provisions remain in place. Employees must still receive at least 11 hours of rest between two working days. Anyone working more than six hours must take a minimum break of 30 minutes, while those working more than nine hours must take at least 45 minutes. Likewise, the prohibition on working on Sundays and public holidays under Section 9 of the German Working Hours Act remains unaffected by the revision.
What opportunities does this create in practice?
The revision is intended to make it easier to adapt working hours to operational requirements. For example, longer shifts could be combined with longer periods of time off. This is particularly beneficial in sectors that rely on on-call services, such as healthcare, fire and rescue services, critical infrastructure and customer service operations, where it enables simpler shift planning. Continuous 24/7 coverage could potentially be organised using a two-shift system instead of three.
The new rules would also make it easier to deal with temporary peaks in workload, for example in project-based work or seasonal businesses, without breaching working time legislation. If work at a customer site in the field takes longer than expected, employees could continue working rather than stopping purely because of daily time limits, potentially avoiding additional journeys.
What does the Employment Law Reform mean for management, HR and payroll?
The impact will depend on each organisation’s individual circumstances. After all, the maximum average weekly working time remains unchanged. Longer working days do not automatically result in higher productivity. On the contrary, productivity generally declines as working hours increase, while the risk of accidents also rises.
For employers, the main benefit lies in being able to adapt working hours more flexibly and in full legal compliance to match operational demand. This enables businesses to deploy their workforce more efficiently while supporting new working time models beyond the traditional nine-to-five schedule.
The impact on payroll is more difficult to predict. Recording working time accurately may initially create additional administrative work if monthly working hours vary for each employee and working time accounts have to be monitored over longer periods. At the same time, however, electronic working time recording also reduces administrative effort through automation.
This does, however, require accurate, complete electronic working time recording and, where necessary, the implementation of solutions capable of meeting these requirements.
Checklist: How to prepare your business for mandatory working time recording
Electronic working time recording is already standard practice in many organisations. Nevertheless, even existing solutions should be reviewed to ensure they meet the new requirements of the revised Working Hours Act.
Step 1: Assess your current situation
- Which requirements will apply to your organisation? Are there any exemptions?
- Does your current working time recording solution comply with the requirements of the proposed Working Hours Act, including data protection and compliance?
- Which transition periods apply to your business?
Step 2: Take action
- If required, implement a legally compliant digital working time recording solution.
- Update employment contracts and works agreements. Your workforce scheduling processes may also need to be revised.
- Train employees and managers accordingly.
- Define responsibilities and monitoring procedures.
Step 3: Put the system into practice
- Record working hours accurately every day.
- Archive records in accordance with the legal requirements.
- Delete data once the statutory retention period has expired and document the deletion.
Have questions? We're happy to help.
How Celero One supports workforce management and compliance
The overarching objective of the Employment Law Reform 2026 is to increase flexibility and, ultimately, operational efficiency. Celero One’s workforce management software is designed to orchestrate people, processes and field operations in real time while delivering an outstanding frontline experience. It already provides all the tools organisations need to comply with the planned changes introduced by the Employment Law Reform and to take full advantage of the opportunities it creates.
Integrated digital working time recording
Accurate electronic working time recording is the foundation of flexible working hours. Based on employees recording the start and end of their working day as well as their break times, Celero One automatically calculates net working time. If actual working time exceeds the scheduled assignment duration, the system immediately identifies the excess as overtime.
Within Celero One, recording working hours and breaks is an integral part of every assignment and is completed actively by employees within the mobile app. All recorded working time data is centrally archived in Celero One in full compliance with the GDPR and applicable legal requirements.
Individual working time models
Although the proposed Employment Law Reform introduces an average maximum weekly working time of 48 hours, actual working hours are often lower due to part-time contracts and other flexible employment models. Managing different contractual working hours can make workforce scheduling significantly more complex.
Celero One provides complete real-time transparency. Individual contractual working hours, such as maximum weekly working hours, can be stored for every employee. If planned assignments exceed these limits, Celero One immediately alerts schedulers, helping to prevent planning errors.
Collaborative task allocation
Celero One offers two primary ways to assign work. The first is the traditional approach of manually assigning tasks to individual employees. In addition, Celero One’s Booking module and Auto-Assign feature automate task allocation.
Using intelligent algorithms, the system identifies the most suitable resource and offers the assignment to that employee. The employee can either accept or decline the task. If declined, the assignment is automatically offered to the next most suitable person.
This significantly accelerates and simplifies workforce scheduling while actively involving frontline employees in the planning process, leading to better resource utilisation and higher workforce satisfaction.
Optimising the utilisation of available resources
In many organisations, additional working hours—and overtime in particular—are not primarily caused by insufficient capacity but by uneven workload distribution and a lack of flexibility in planning and operational control.
In practice, reallocating work from one employee to another rarely fails because of missing skills. More often, the challenge is providing all the technical and procedural information required to complete the task efficiently.
Celero One’s Process Manager brings all workflows together in one central platform and provides employees with detailed task instructions for each on-site assignment directly on their smartphones. To eliminate language barriers, these task descriptions can be translated instantly into a wide range of languages using the integrated translation tool.
This enables organisations to delegate work quickly and flexibly while optimising resource utilisation across the entire frontline workforce.
Have questions? We're happy to help.
FAQ on the Employment Law Reform 2026
Does the obligation to record working time only apply from 2026?
No. The obligation to record working time already applies today. The European Court of Justice (ECJ) established this principle in 2019. In 2022, the German Federal Labour Court (BAG) further ruled that the current German Working Hours Act (Arbeitszeitgesetz – ArbZG) already provides the legal basis for working time recording in Germany.
Employers are therefore already required to record and store employees’ working hours systematically and in a verifiable manner. The revision planned for 2026 specifies how working time recording must be implemented in practice.
What must be recorded electronically?
The start, end and duration of working time, as well as overtime and breaks, must all be recorded electronically and stored. Working time must be recorded to the minute. Rounded time blocks or 15-minute intervals, which have often been common in shift-based operations, will no longer be permitted. All data must be collected in compliance with the GDPR and retained for at least two years.
Will trust-based working hours remain permitted?
Yes. Trust-based working hours (Vertrauensarbeitszeit) will continue to be permitted. The conditions are that employees record their own working hours in accordance with the requirements of the Working Hours Act and that employers fulfil their obligation to carry out at least spot checks to verify the plausibility of those records.
What does the maximum weekly working time mean?
Instead of a maximum daily working time, the revised legislation introduces a maximum weekly working time. The proposal provides for an average weekly limit of 48 hours calculated over a reference period that is expected to be between three and four months.
How many hours may employees work per day?
Under the proposed Working Hours Act, employees could work up to 12 hours per day instead of the current maximum of 10 hours. However, the average weekly limit of 48 hours, together with the existing rules on breaks and minimum rest periods, would remain unchanged.
What role does payroll play?
Payroll remains responsible for processing wages and salaries. The proposed requirement for digital, minute-accurate and timely working time recording is expected to reduce administrative effort by improving the quality and availability of working time data.