EU’s time tracking law and what it means for your company

The EU time tracking law—what is it, exactly? How did it come about? And what does it mean for your business? Here’s a simple breakdown.

In 1993—and updated in 2003—the EU set rules all its member states must follow in regard to work time and rest time. These rules included items such as:

• Maximum weekly working time of 48 hours
• Rest breaks during work if the day is longer than 6 hours
• Minimum 4 weeks paid annual leave
• And more

This is the EU Working Time Directive and member states had to integrate it into their own national legislation. 

In 2019, there was a lawsuit against Deutsche Bank in Spain, initiated by Spanish labor unions. 

The reason for the dispute? The local subsidiary of Deutsche Bank was only tracking employee overtime. That, however, didn’t fully meet the requirements of the EU’s Working Time Directive, which states: employers must ensure their staff get sufficient rest periods.

By allowing companies to track only overtime hours, employees are left in an unfavorable position. It becomes impossible for them to ensure that their fundamental rights, as well as the rights established in national legal acts, are complied with—or prove otherwise. 

The lawsuit went to the Court of Justice of the European Union, which delivered a ruling, stating: all companies within the EU are obligated to track their employees’ working hours.

What does the court ruling mean for EU companies?

The ruling came into force instantly and refers to all types of businesses and companies of all sizes that employ people in any of the EU member states. 

It has become known as the EU time tracking law, but, in essence, it’s just an official clarification/interpretation of the Working Time Directive that’s closing a potential loophole. 

This means that all employers should already be using “an objective, reliable and accessible” time tracking system, as the ruling requires, to comply with the EU Working Time Directive and national legal acts. Neither lack of awareness of such a ruling, nor lack of funds in the company’s budget releases the employer from this obligation. 

What happens if an employer decides not to comply with the EU time tracking law?

For one, like Deutsche Bank, the company is at risk of getting sued. Employees who feel that their work time isn’t accurately tracked—meaning, they cannot be certain that their labor rights are respected—can take legal action against the company.

And two—if there is a dispute between the employer and employee, the court will always take into account the worker’s position of weakness in the employment relationships. For example, if an employee states that he or she has worked 48 hours a week, while the employer argues that it’s only been 30, it’s the employer’s responsibility to present proof in the court. 

For these reasons, implementing work time tracking is in the company’s best interests. Not to mention that stats also show time tracking gives an instant 30% employee productivity boost, which in the long-term results in higher revenue.

How to implement time tracking in your company?

Your first step should be to check in with your national legislation and labor laws. While the EU time tracking law imposes these rules on all member states, the specifics of adoption can differer from country to country. For example, in Denmark, a new time tracking bill recently came into effect. 

Neither the directive, nor the ruling specify what time tracking systems employers must use. Theoretically, this can be punching in and punching out on arrival and departure, manually filling out spreadsheets, or simply writing down your arrival, breaks and leaving time on a piece of paper.

However, there is a question of reliability: can you 100% trust a time tracking system which relies on manual inputs? And, after all, how practical is that when there are more modern and automated tools available, such as software?

There is a plethora of time tracking software to choose from. How to pick the best one that will help you comply with the new ruling, as well as ensure other benefits, such as higher productivity and efficiency? Here’s what to look for:

• Automatic. It starts automatically as soon as the employee turns on a computer and stops when he or she logs out. Make sure the time tracking solution doesn’t require much manual input, which will make it more reliable and user-friendly.
  
• Idle time tracking. It registers the time when an employee is away from the computer, for example, on a break. Choose a time tracking system that allows employees to log in their time manually, so that they can register work-related reasons for being offline, such as meetings, business lunches, etc. 
  
• URL and app tracking. It tracks what websites and programs an employee has used during the working hours. This is useful in case of disputes, especially when it comes to pay. For example, if an employee argues that he/she has worked 8 hours, but has spent 90% of that time scrolling social media, the truth—and the proof—is on your side.
  
• Private time features. Time tracking is sometimes perceived as privacy invasion, so make sure the time tracking tool you choose has employee-friendly features, such as the ability to enable a private time option and surf the web without being tracked. Because remember—you and your employees must work together, not fight against each other. So, look for a solution that balances the rights and needs of both parties.

DeskTime is an automatic time tracking solution that offers all of the above and more. 

EU’s time tracking law—do not ignore it

The EU time tracking law represents a significant shift in how companies must approach employee time management, requiring concrete systems to protect both worker rights and business interests. 

While companies have flexibility in how they implement these requirements—from manual systems to automated software solutions—the key is choosing a reliable, objective method that can withstand potential legal scrutiny. Ignoring these requirements isn’t an option for EU businesses, as non-compliance risks legal action and puts companies at a disadvantage in potential labor disputes, making it crucial to implement appropriate time tracking systems sooner rather than later.