Germany’s Labor Overhaul Goes Beyond Digital Time Clocks: Weekly Hours, Sunday Baking, and Longer Contracts

Germany's coalition unveils sweeping labor reform with a 34-point plan, replacing daily with weekly working hours and mandating digital time recording for firms over 10 employees from 2026.

Germany’s coalition government has unveiled a sweeping reform of labor law, packaged as a 34-point “Program for Recovery and Employment.” While a mandatory digital time?recording system for firms with more than ten employees – set to take effect in 2026 – has grabbed headlines, several other changes are likely to reshape workplaces more profoundly.

Weekly cap replaces daily limit

The most structural shift is the abolition of the daily maximum working hours of eight or ten hours. In their place, a weekly ceiling will become the sole legal limit. A corresponding amendment to the Working Hours Act is scheduled for 2026. Industry groups quickly applauded the move. Felix Pakleppa, managing director of the Central Association of the German Construction Industry (ZDB), said longer single days would allow workers on remote building sites to finish the week earlier. Hospitality and tourism, he added, would also gain flexibility to handle seasonal or order?driven peaks.

Digital recording becomes mandatory, with exceptions

Alongside flexibilization, documentation obligations are tightening. Following rulings by the European Court of Justice in 2019 and the Federal Labor Court (BAG) in 2022, employers are already required to record the start, end, and duration of daily work. From 2026, digital time recording will be compulsory for companies with more than ten employees. Smaller businesses may continue using paper?based systems. Larger firms must introduce minute?accurate documentation and retain data for at least two years. The obligation applies to home?office and mobile work as well – employees enter their own data, and employers check for plausibility. Legal experts stress that pure trust?based working time without any documentation has been unlawful under current case law.

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Bakeries get extra Sunday hours

Bakers and confectioners receive a sector?specific concession: from 1 January 2027, they may deploy staff for up to eight hours on Sundays and public holidays, up from the previous three?hour limit. The German Bakery Trade Association called the change a long?overdue equalization. The background is a structural decline – the number of bakeries fell from 12,155 in 2015 to 8,659 in 2025. Unions such as NGG and ver.di, as well as church representatives, have criticised the move. The planned increase in the flat?rate tax on mini?jobs in the skilled trades – from 2 percent to 5 percent – is also provoking debate.

Other key provisions at a glance

The reform package, still subject to parliamentary approval, includes further changes:

• Fixed?term contracts: The maximum duration for fixed?term contracts without a specific reason will be extended to 48 months with up to six renewals. This temporary rule would apply until 31 December 2030.
• Sick notes: The pandemic?era allowance for telephone sick notes will be revoked. From now on, employees must obtain a medical certificate on the first day of incapacity.
• Severance options: High earners may be offered new ways to end employment agreements with a severance package. Tax incentives are designed to promote swift job changes after a dismissal.
• Technology and AI: The introduction of artificial intelligence in workplaces is to be accelerated, while works councils retain their co?determination rights.

The government defends the package as a necessary stimulus for economic growth. Opposition parties and employee representatives argue that it weakens dismissal protection through longer fixed?term contracts. Whether all measures will be implemented as planned is uncertain: urgent motions against linked social reforms are already pending before the Federal Constitutional Court.