Germany faces mandatory work-time recording rule and €40 bn pension funding shortfall

The German Federal Labor Court (Bundesarbeitsgericht) ruled that employers must introduce a system to record employees' working hours. The decision implements the European Court of Justice's 2019 requirement for an "objective, reliable and accessible" time‑recording system. The duty applies immediately; violations are overseen by state labour‑inspection authorities, which can impose corrective measures and fines after a breach is identified. The ruling aims to improve transparency, ensure rest‑time compliance and curb unpaid overtime. The government expects digital solutions and notes possible exemptions for executives and very small firms. Labour Minister Hubertus Heil stressed the need for practical, employer‑friendly implementations.

Separately, the statutory pension insurance in Germany shows an annual financing gap of roughly €40 billion for non‑contributory benefits such as mother’s pensions, childcare, care periods and former East‑German earnings. The federal subsidy falls short, meaning the shortfall is borne by employees and employers. As the Ministry of Labour and Social Affairs explained, "Die Differenz zwischen nicht beitragsgedeckten Leistungen und Bundesmitteln wird durch die Beitragszahlenden, also Arbeitnehmer und Arbeitgeber, getragen." A commission has recommended reforms, but concrete legislative measures are still pending.