EU Time Tracking Law: Requirements, Compliance & Implementation (2026 Guide)

Labor inspectorate visit. No time tracking system. €30,000 fine (proposed maximum—actual enforcement typically starts with warnings and compliance orders), 30 days to implement objective tracking for every employee—including executives.

The 2019 EU Court of Justice ruling requires all employers across 27 member states to implement objective, reliable, accessible systems measuring daily working time for every employee. No exemptions for salaried workers, managers, or remote staff. Penalties: Germany up to €30,000 (proposed; current enforcement focuses on compliance orders), Spain up to €187,515 (most aggressively enforced), plus employee lawsuits for unpaid overtime.

Does This Apply to U.S. Companies?

Yes, if you have EU employees. Offices, remote workers, or subsidiaries in any of the 27 EU member states must comply for those employees.

When U.S. companies need to care: EU offices/branches, remote employees living in EU, EU subsidiaries, contractors classified as employees under EU law.

When you don’t: U.S. employees working entirely in the U.S.

💡 Quick Answer
The 2019 EU court ruling requires all employers in EU member states to track every employee’s hours with objective, reliable systems. Includes executives, remote workers, salaried staff—no exemptions. Spain fines up to €187,515 (most aggressive enforcement). Germany up to €30,000 (proposed; current enforcement emphasizes compliance orders over maximum fines). France enforces back pay for untracked overtime.

How to Comply: 3 System Requirements

Your system must meet three standards:

1. Objective (verifiable, not just trust)

Qualifies: Digital time clocks, time tracking software with audit trails, mobile apps with timestamps, any system creating verifiable records.

Doesn’t qualify: Honor system, unverified timesheets, assumptions based on contracted hours, “we trust our employees.”

Test: Could a labor inspector verify actual hours? If not, it’s not objective.

2. Reliable (accurate and consistent)

Captures actual start/end times
Protected from manipulation or data loss
Works consistently across all employees
Backed up and retained properly (3-5 years per member state)
Audit logs showing when records are edited

3. Accessible (employees and inspectors can see it)

Employees must view their own records
Inspectors access records during audits
Clear, understandable format in appropriate language
Employee portals or regular reports, secure but retrievable storage

⚠️ The “Executive Exemption” Myth
EU law has no exemptions. Your CFO, senior managers, and highest-paid employees all require daily time tracking. Labor inspectors specifically check whether companies are trying to avoid tracking senior staff.

What Are the Requirements for EU Time Tracking Systems?

1. Objective: Record actual time, not estimates. Verifiable, not subject to manipulation. Digital time clocks, software with approval workflows, biometric systems (GDPR-compliant), mobile apps all qualify. Honor system alone doesn’t.

2. Reliable: Accurately captures time, protected from loss, functions consistently. Automated tracking reduces errors. Regular backups, audit trails.

3. Accessible: Employees access own records. Authorities inspect on request. Records understandable and clear. Provide employee portals/reports, retain 3-5 years, appropriate languages.

4. Comprehensive: All employees tracked regardless of seniority, salary, location, or schedule. No exemptions.

How Do Member States Implement the EU Time Tracking Requirement?

Each EU country enforces differently:

Spain – Strictest: €750–€2,250 (minor), €2,251–€6,250 (serious), €6,251–€187,515 (very serious). Records: start, end, breaks, 4-year retention. Aggressive enforcement, surprise audits.

Germany: Proposed legislation suggests penalties up to €30,000 per violation, but current enforcement practice is far less aggressive. Most violations result in compliance orders, warnings, and modest fines—particularly for small and medium businesses. Enforcement has increased gradually, with focus on ensuring systems are implemented rather than imposing maximum penalties. Criminal charges for time tracking violations are virtually non-existent. Must track all working time.

France: Administrative fines, back pay for unrecorded overtime, potential criminal penalties. Well-established enforcement, employee lawsuits common.

Netherlands: Fines and sanctions from Labor Inspectorate. Must register hours, rest, breaks; 52-week retention. Enforcement varies by sector.

Italy: Administrative fines, increased high-risk sector scrutiny. Implementation accelerating.

All others: Belgium, Austria, Portugal, Poland, Sweden, Denmark, Greece and remaining states have national requirements. Core obligation is universal.

⚠️ Multinational Compliance
You need separate compliance for each country. A German-compliant system may violate Spanish law (4-year vs. 3-year retention). Work with local employment counsel in every member state.

Time tracking is personal data subject to GDPR.

Compliance requirements:

Lawful basis: Legal obligation (most common) or legitimate interest. Document in privacy policies.
Data minimization: Collect only necessary data (start/end times, breaks, hours). Avoid excessive monitoring unless justified.
Purpose limitation: Use for labor compliance, payroll. Don’t repurpose for unrelated surveillance without justification.
Transparency: Inform employees about systems, data collected, purposes. Update privacy notices.
Security: Protect data, restrict access to authorized personnel.
Retention: Retain as required (3-5 years), delete when no longer needed.
Employee rights: Access, correct, and (limited) delete records. Establish data subject request processes.

Best practices: Choose least intrusive compliant system, be transparent, limit data access/use, regularly review for both time tracking and GDPR compliance.

What Are the Compliance Steps for Employers?

1. Assess current systems: Do we track all employees? Is it objective, reliable, accessible? Does it meet each member state’s requirements? Are managers and remote workers included? Reality: no systematic, verifiable system = non-compliant.

2. Choose compliant system:

Options: Digital software (cloud/on-premise, automated, payroll integration, audit trails), time clocks (badge/biometric), mobile apps (remote/field workers, GPS if GDPR-compliant), hybrid (combination for different groups).

Key features: ease of use, GDPR compliance, reporting/audit capabilities, employee record access, integration.

3. Develop policies: Written policies on tracking obligations, system use, accuracy requirements, approval workflows, correction procedures, retention/access. Communicate in handbooks, training, translations.

4. Train employees and managers:

Employees: how to use system, importance of accuracy, access rights. Managers: review responsibilities, compliance monitoring, handling exceptions, legal obligations.

5. Implement and monitor: Pilot first, address technical issues, provide transition support. Ongoing: audit for completeness/accuracy, address non-compliance, update as laws evolve.

6. Retain records: Spain 4 years; Germany, France, Netherlands typically 3-5. Secure, accessible, retrievable for inspections.

What Are Common Challenges and Solutions?

Salaried/senior resistance: Communicate legal requirement, emphasize privacy protections, use user-friendly systems, lead by example.

Remote/hybrid work: Digital tools accessible anywhere, clarify expectations about recording all work time, respect disconnect, trust but verify.

Flexible arrangements: Mobile apps, focus on total hours and rest compliance not rigid schedules, regular check-ins.

Multinational: Local counsel in each jurisdiction, implement strictest requirements, centralize oversight with local customization.

Common mistakes: ❌ Assuming salaried employees exempt ❌ Relying solely on honor system ❌ Failing to track remote workers ❌ Not providing employee access ❌ Using data for unrelated surveillance (GDPR violation) ❌ Ignoring requirement entirely

What Are the Benefits Beyond Avoiding Penalties?

Legal: Avoid fines, protect against overtime lawsuits, demonstrate good faith in inspections.

Financial: Ensure correct pay, reduce payroll errors, identify overtime trends.

Operational: Identify overworked employees, prevent burnout, optimize staffing, improve project budgeting.

Strategic: Analyze productivity patterns, identify inefficiencies, support workforce planning.

Employee protection: Ensure required rest, prevent excessive hours, support work-life balance.

What Is the Status in the UK Post-Brexit?

Status: No longer bound by CJEU ruling or EU directives.

Current law: Working Time Regulations 1998 remain. No explicit systematic tracking requirement.

Enforcement: Must ensure maximum hours and rest compliance. Record-keeping obligations less prescriptive.

Recommendation: Many UK employers maintain tracking to ensure compliance and protect rights.

What’s the Bottom Line?

EU time tracking law requires all employers in EU member states to implement objective, reliable, accessible systems measuring each employee’s daily working time. Applies to all employees without exemption.

Key points:

Stems from Working Time Directive, enforces maximum hours and rest protections
All 27 EU member states implement through national legislation with varying penalties
Systems must be objective (verifiable), reliable (accurate), accessible (available to employees/authorities)
All employees tracked including senior executives, remote workers, flexible schedules
GDPR compliance required—time data is personal data with privacy protections
Penalties substantial: fines, back pay, legal liability
Benefits include accurate payroll, workload management, employee protection

Consult local employment counsel for country-specific requirements.

Looking for EU-compliant tracking? ShiftFlow’s time tracking meets objective, reliable, accessible standards, digital timesheets provide employee access and audit trails, and workforce insights help identify violations before inspections.

Sources

Court of Justice of the European Union – Case C-55/18
European Commission – Working Time Directive
Spanish Ministry of Labor – Labor Regulations
German Federal Ministry of Labour – Working Time Act

Frequently Asked Questions

Do U.S. companies with EU employees need to comply?

Yes. If you have employees located in any EU member state—whether through offices, remote work, or subsidiaries—you must comply with EU time tracking laws for those employees. Your U.S. headquarters doesn’t exempt your EU-based staff from local requirements. Work with employment counsel in each EU country where you have employees to ensure compliance.

What are the penalties for not tracking working time in the EU?

Penalties vary by country. Spain: €750–€187,515 depending on violation severity (most aggressive enforcement). Germany: proposed legislation suggests up to €30,000, but current enforcement emphasizes compliance orders and warnings over maximum fines, particularly for small businesses. France: administrative fines plus back pay for untracked overtime. All countries allow employee lawsuits and labor inspectorate enforcement actions. Penalties increase for repeat violations.

Do senior executives need to track their time?

Yes. EU time tracking law has no exemptions for executives, managers, or highly paid employees. The CJEU ruling applies to all employees regardless of seniority, salary, or autonomy. Labor inspectors specifically check whether companies are attempting to avoid tracking senior staff.

What kind of time tracking system is required?

The system must be objective (verifiable, not just self-reported), reliable (accurate and protected from loss), and accessible (employees and inspectors can view records). Digital time tracking software, time clocks, mobile apps, and biometric systems all qualify if properly implemented. Informal self-reporting or honor systems do not comply.

How long must time tracking records be kept?

Retention periods vary by member state. Spain requires 4 years. Germany, France, and Netherlands typically require 3–5 years. Check specific national requirements for each country where you operate. Records must be stored securely and made available for labor inspectorate audits.

What should I do if my company isn’t tracking time for all employees?

Immediately assess current systems and identify gaps. Consult employment counsel in each EU member state where you operate. Choose and implement a compliant time tracking system that meets objective, reliable, and accessible standards. Develop written policies and train employees. Prioritize compliance—enforcement is increasing and penalties are substantial.