Fraud of Working Hours Act Penalties & Rules

In the modern world of work, flexible working hours and overtime are often the rule. But where is the line between committed commitment and illegal conduct? The German Working Hours Act sets clear limits to protect employees. In our blog article, we shed light on legal regulations, explain possible penalties for violations and give practical tips on how both employees and employers comply with the regulations and oppose working time fraud be able to protect.

Current requirements: How must working hours be recorded?

According to the German Working Hours Act, working hours must be recorded precisely and reliably to ensure compliance with legal requirements. In particular, regulates Section 16 (2) ArbZGthat the employer is obliged to record working time beyond working hours and to keep the records for at least two years. This documentation requirement serves to protect employees and to be reviewed by supervisory authorities.

Fines: How much do violations of the Working Hours Act cost?

The exact project time tracking is not only good business practice, but also a judicial and partly collective agreement requirement in Germany. Companies that violate the Working Hours Act expose themselves to the risk of fines and other consequences.

Excerpt from the catalog of fines

Violations of the Working Time Act are often treated as administrative offenses and can result in fines of up to 30,000€ per infringement be punished. These fines can be imposed on both the company and the responsible manager personally. The exact amount of the fine is at the discretion of the competent supervisory authority in accordance with state law (e.g. district government, trade inspectorate). The current catalog of fines, published by National Committee on Occupational Safety and Safety Technology (LASI) is published.

Die 5 most common violations and their fines:

Even though the individual fines appear manageable at first, they can quickly add up to five or six-figure amounts, even in smaller companies. This is because the Statute of limitations two years and the supervisory authority can check the working time sheets of all employees for the last 24 months in order to punish any violations identified accordingly. In addition, can Repeated and intentional infringementswho endanger the health of an employee are prosecuted. These can be done with Imprisonment of up to one year or be punished with fines.

Reputational damage

Companies that violate time recording regulations risk their reputation and credibility. This can lead to a loss of trust among customers, business partners and employees and have long-term negative effects. Violations of occupational health and safety laws quickly lead to negative media coverage, as with an Amazon subcontractor in 2021, who was criticized in the ZDF magazine “Frontal.” Amazon filed a criminal complaint back then after the subcontractor exploited its employees, which led to barely sustainable salaries, work pressure, unpaid overtime and disregard of legal rest periods.

Violation of the Working Hours Act: Which rules must be adhered to?

Violations of working time regulations are no trivial matter — quite the opposite. They affect the health of employees and can result in high costs in an emergency. The saying “ignorance does not protect against punishment” applies particularly to working hours. Since the Working Hours Act is intended to ensure the health protection of employees, compliance lies with the employer.

Break time

It's not just your body that tells you when it's high time for a recess is, the legislator also has strict rules as to when a break MUST be taken. This is regulated in Section 4 of the Working Hours Act.

After six hours at the latest, the legislator requires a A break — this also applies to the most dedicated workaholic. However, employees can divide their breaks into several sections — the break does not have to be taken in one go.

Sample calculation:

You start your work at 8:00 in the morning. In this case, according to the ArbZG, you must take a break of 30 minutes at the latest at 14:00. However, you can split this half hour into two 15-minute sections — such as a break from 12:30 to 12:45 and the next from 1:45 to 14:00. But beware: A break block must be at least 15 minutes long!

Maximum working time

Suppose that in a company, an employee drops out unexpectedly while at the same time an urgent complaint needs to be handled and an important customer request arrives. Another employee is the last to stay in the office after a 12-hour day to get everything done — but this is against the Working Hours Act. This is because the following limits apply to maximum working hours:

Rest periods

There are different views on whether you live to work or work to live. But with the legally required rest period, there is no room for discussion: There must be at least 11 hours between the end of one working day and the start of the next — even in the following situations:

📞 A phone call after a business lunch counts as working time, and the 11-hour rest period starts afterwards.

🍽️ Business lunches count as working time if they are part of the task or have been arranged by the manager.

🏡 The legal regulations on rest periods must also be complied with when working from home.

Sundays and holidays

The Working Hours Act sets a general ban on employment on Sundays and public holidays, with exceptions for certain occupations and emergencies. Employees who still have to work on these days are entitled to at least 15 free Sundays a year. Exemptions can be requested for work on Sundays and public holidays, but replacement days must be granted, usually within two weeks for Sundays and within eight weeks for public holidays.

However, it is possible to apply to the competent supervisory authority for an exemption to work on these days. This includes:

1. A maximum of 10 Sundays and public holidays per year in retail for Sunday shopping.

2. One Sunday a year to comply with the legally required inventory.

3. A maximum of 5 Sundays and public holidays per year at Averting disproportionate damage, although this damage must be significant and the work on these days must be justified. This could be, for example, the impending production downtime due to unexpected repairs.

Special features: What exceptions are there?

Exceptions confirm the rule — even when it comes to working time:

Business trips

The assessment of whether travel time should be regarded as working time depends on the means of transport used and on how employees may or must spend the time during the trip. With Airplane or rail travel Travel time is considered working time if employees are required to work. However, if they are free in their design and use the time for relaxation or personal activities, it is regarded as leisure time. In the case of Car trips to customers Is the driving time for the driver working time, while the passenger usually has free time.

Part-time job

If employees work part-time for another employer or are self-employed on a part-time basis, both the maximum permitted working time and the rest period of 11 hours apply in total. The Working Hours Act focuses primarily on dependent employment, but running your own business is generally permitted as long as it is not in competition with the main employer. However, excessive self-employment may be prohibited, in particular if it leads to fatigue and impairs the fulfilment of employment law obligations with the main employer.

Special groups of people

Attention: For particularly vulnerable groups such as pregnant and breastfeeding women, Young people under 18 years and severely disabled people may apply special regulations and working time restrictions. These relate in particular to the maximum permitted working time, overtime and work on Sundays and public holidays.

When is recording working time particularly important? 3 examples

The importance of a precise working time tracking covers various areas, from public procurement to Customer billing and compliance with employment law regulations. Especially in industries where public money is involved or hourly billing is common, accurate time recording is essential to avoid contractual penalties and maintain customer trust.

Public contracts

When awarding public contracts, strict requirements are often imposed on project time tracking asked. Contracting authorities need detailed records to ensure that contractual obligations are met and that public funds are used correctly. Failure to meet these requirements may result in contract penalties or even exclusion from future assignments.

Customer billing

When you bill customers by the hour, it's essential to accurately record project time. Mistakes or irregularities in project time recording can lead to a loss of trust among your customers and question the financial integrity of your company. In addition, there may be disputes over the services provided and payment defaults. This can be remedied by time sheets that can be sent regularly during the project period. All times worked are then broken down in detail once again in the attachment to the invoice.

Labor law regulations

At the latest with BAG verdict and the resulting draft bill from the BMAS, recording working hours has also become mandatory in Germany. In addition, working conditions in some industries are influenced by Collective agreements regulated. These may include individual project time recording requirements to ensure that working time and compensation are recorded correctly — particularly in handicraft, in healthcare or in retailing.

Unless otherwise specified in collective agreements or company/service agreements, the following applies:

Working time must be documented (electronically). Companies with up to 10 employees are subject to the electronic registration requirement BMAS bill except — but must record their times in another form.

Avoid violations of the Working Hours Act - with ZEP!

Are you still relying on manual project time tracking methods? Errors and inaccuracies are then almost inevitable. For the following reasons:

🕒 Forgotten or incorrectly entered project times by employees

📉 Susceptibility to human error when recording manually

💸 Possible consequences: incorrect billing, excessive working hours, irregularities in reports

🔍 Lack of transparency due to incorrect or incomplete project time recording

📊 Lack of billing overview leads to difficulties with planning and cost control

⚠️ Risk of not keeping track of project progress and identifying problems in good time

In order to avoid violations of the Working Hours Act, a precise and legally compliant Working time recording essential. With ZEP, you have a comprehensive software platform that covers all relevant areas of your project work and at the same time meets all requirements of the Federal Labour Court for recording working time.

Replace error-prone, manual time sheets with a digital working time recording. With the integrated time clock, you can document your employees' working hours precisely and in accordance with the law. This allows you to keep track of hours worked at all times and ensure transparent and secure billing.

Even the project time tracking is significantly simplified with ZEP. Your employees can book time directly for customers, projects or individual sub-projects. Thanks to automated workflows, you reduce administrative costs and ensure that all working hours are recorded efficiently and seamlessly.

For a precise project controlling ZEP offers comprehensive real-time reports and automated workflows. This allows you to always keep an eye on budgets and project progress and react to bottlenecks at an early stage — completely paper-free, if desired.

As Professional Services Automation (PSA) ZEP supports you throughout the entire project cycle — from procurement to final billing. Automated processes optimize your processes and make administration easier.

Do you have big plans? As ERP system ZEP enables you to holistically manage resources, finances and project progress. Thanks to software developed specifically for project-based work, you can optimize your business processes and ensure that you reliably comply with all legal requirements.

With ZEP, you not only manage your projects more efficiently, but also easily meet the legal requirements for recording working time.

{{blog-cta}}

Conclusion

In the modern world of work, compliance with the Working Hours Act is essential to protect both employees and employers. Violations can result in severe fines and damage a company's reputation. Accurate recording of working time is therefore crucial to comply with legal regulations and avoid potential consequences. Modern solutions such as ZEP make this task easier and offer transparency and legal security.