Two Million German Workers Set to Receive Back Pay After Landmark Travel-Time Ruling
Published on 07/24/2026 at 08:40 | Redaktion boerse-global.de
A cascade of regulatory changes is reshaping Germany’s labor landscape, with a European court decision on travel time poised to deliver significant financial compensation to more than two million employees. The shift comes alongside a government reform package that tightens sick-leave rules while loosening fixed-term contracts.
Travel Time Counts as Work, Court Decides
The European Court of Justice ruled in October 2025 that journeys from a worker’s fixed base to varying assignment locations must be classified as working hours—provided the employer dictates the schedule and the employee cannot freely manage that time. The decision affects over two million people across several industries.
The largest group includes more than 1.8 million workers in construction and cleaning services. Around 450,000 people in nursing field services are also impacted, along with roughly 130,000 landscape gardeners. For an employee traveling 80 minutes daily, the back-pay implications are substantial. With Germany’s minimum wage set at €13.90 since January 2026, monthly arrears could reach €400.
Electronic Time Tracking Becomes Mandatory
Employers have been required to record all working hours since September 2022, following a Federal Labor Court ruling. Now the government is making electronic timekeeping compulsory, with fines of up to €30,000 for those who neglect documentation.
The market is already responding. ATOSS, a specialist in workforce management software, saw its cloud revenues jump 27 percent in the first quarter of 2026 to €27 million, out of total sales of €51.4 million.
With electronic time tracking now mandatory and travel time counting as work, accurate documentation of working hours has never been more critical. For UK employers, the same principle applies to health and safety records—keeping compliant risk assessments that reflect every aspect of your team's workday. A free toolkit with 41 ready-to-use templates and checklists helps you document workplace hazards efficiently and stay on the right side of the law. Download the free Risk Assessment Toolkit
Workers face consequences too. In 2023, the Hamm Regional Labor Court upheld the summary dismissal of an employee who visited a café during stamped working hours. The court ruled that time theft destroys the trust relationship, even without a prior warning.
Government Reform Package Shifts Sick-Leave and Contract Rules
In early July 2026, the federal government unveiled its “Program for Upturn and Employment.” One key element expands fixed-term contracts without objective cause. For new hires until the end of 2030, contracts can run up to 48 months with six possible extensions. From January 2027, the written-form requirement will also be dropped.
At the same time, health management is being tightened. Germany’s average sick leave hit 18.6 days in 2025, according to the Techniker Krankenkasse. A study by Pronova BKK found that 60 percent of employees had reported sick at least once despite being fit to work.
The government’s response includes:
- Eliminating phone-based sick notes
- Requiring a medical certificate from the first day of illness
- Tougher penalties for doctors who violate documentation rules
Bakeries Win Sunday Exemptions
The reform package also brings sector-specific adjustments. Handicrafts president Jörg Dittrich had pushed for relaxing the ban on Sunday baking. Starting January 2027, bakeries will be allowed to bake for up to five hours and spend three hours delivering on Sundays.
As German regulators tighten rules on sick leave and documentation, UK employers face their own compliance challenges under the Health & Safety at Work Act. A free toolkit provides nine practical tools—including risk assessments, checklists, and a director's liability guide—to help you meet your legal duties and protect your workforce. Get the free Health & Safety at Work Act 1974 Toolkit
Pay rules are changing too. The flat-rate tax on mini-jobs rises from 2 to 5 percent. For top earners with annual salaries above €177,450, a new dissolution option is being introduced: employers can terminate the employment relationship against a severance payment of 12 to 18 months’ salary. If the employee is rehired quickly, those severance payments receive tax advantages.
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