Time Tracking - All You Need to Know

Time tracking fundamentally is about the recording of employees' working hours. However, there are various forms and methods within time tracking to offer the best options for your company. Additionally, the new legislation from April 2023 has brought new developments. Therefore, this article will shed light on the various types, methods, and tools for time tracking. It will also highlight the benefits of time tracking and address data protection and legal aspects.

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Different Types of Time Tracking

Time tracking can be carried out in various ways, with each method having its own advantages and disadvantages.

  • Manual Time Tracking: In this method, employees manually record their working hours in tables, workbooks, or time tracking forms. This method requires a certain level of discipline and can be susceptible to errors.
  • Electronic Time Tracking: Electronic systems allow working hours to be tracked using software solutions. Employees can enter their hours through computer terminals, mobile apps, or web applications. This method enables faster and more accurate tracking, simplifies analysis, and offers advanced features such as vacation planning and reporting.
  • Automated Time Tracking: With this method, working hours are automatically tracked without the need for employee intervention. This can be done, for example, through the use of biometric systems like fingerprint or facial recognition technology, or through the use of wearables such as smartwatches. Automated time tracking offers high accuracy and convenience but often requires a more extensive infrastructure, and data protection concerns must be considered.

The choice of the most suitable time tracking method depends on individual requirements, the size of the company, and data protection regulations. Each method has its own merits and should be carefully evaluated to find the optimal solution.

Benefits of Time Tracking

Time tracking offers numerous advantages for both companies and employees. Here are some of the key benefits:

  • Improved Efficiency: Accurate time tracking allows companies to enhance efficiency by identifying bottlenecks, avoiding overtime, and optimizing workflows. Analyzing the tracked data also helps allocate resources more effectively.
  • Transparency and Traceability: Time tracking creates transparency, enabling employers and employees to trace the time spent on various tasks or projects. This can increase productivity, ensure fair distribution of work hours, and help manage workloads more effectively.
  • Employee Motivation and Satisfaction: Transparent time tracking can enhance trust and satisfaction among employees, as compensation becomes fairer and more understandable. Additionally, time tracking can support work-life balance by limiting overtime and enabling better time management.

Is Time Tracking Mandatory?

In September 2022, the Federal Labor Court ruled that employers must record employees' working hours. In April 2023, the Ministry of Labor subsequently published a draft law that includes the obligation of electronic time tracking. According to the BAG's case law, this obligation already exists.

However, there are the following transition periods for implementation:

  • For companies with 10 employees or fewer, paper-based recording is permitted.
  • For companies with fewer than 50 employees, a transition period of 5 years applies.
  • For companies with fewer than 250 employees, the transition period is 2 years.
  • For companies with 250 or more employees, there is a 1-year transition period.

Sooner or later, every companies will need to implement a tool for time tracking. Our tip: Take the opportunity to introduce an all-in-one HR software solution. This will not only address time tracking but also allow you to comprehensively optimize HR processes.

Methods and Tools for Time Tracking

There are various methods and tools that can be used for time tracking. Here are some of the most common options:

  • Time Tracking Software: These software solutions enable the digital recording and management of working hours. They offer features such as one-click time tracking, project allocation, reporting, and integration with other systems like payroll. This method provides the most comprehensive overview and functionality.
  • Time Clocks and Terminals: These physical devices are often used in companies to track working hours. Employees can register their working hours by stamping cards, scanning fingerprints or using terminals.
  • Apps and Web-Based Solutions: With the help of mobile apps, employees can track their working hours directly on their smartphones. These apps often offer additional features such as location tracking, vacation requests, and notifications.
  • Wearables and Biometric Tracking: Advanced technologies like smartwatches or biometric sensors allow for the automatic tracking of working hours by detecting employees' presence or activities.

The choice of the appropriate method and tool depends on the company's requirements and the nature of the work. It is essential that the chosen solution is user-friendly, complies with data protection regulations, and can be well integrated into the existing infrastructure. An effective time tracking method and corresponding tools significantly contribute to the accuracy, efficiency, and transparency of time management.


We would like to point out that our website provides non-binding information, which under no circumstances constitutes legal advice. This also, and especially, applies to topics within the sphere of legal HR advise. The content of this contribution cannot and is not intended to replace individual and binding legal advice. For this reason, all information provided is without guarantee of correctness and completeness, but always researched with the utmost care.

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