Track Time

What is the EU time tracking law? Information for business owners

Joseph Patterson | June 12, 2019
If you’re new to this whole time tracking thing, take it from an expert: Time tracking doesn’t have to be painful. In fact, it can benefit everyone involved—employers and employees alike. On May 14, 2019, the European Union’s highest court ruled that all employers must track their employees’ working hours. Previously, employers were only required to track overtime hours. But as a recent press release put out by the Court of Justice of the European Union shows that directive has changed: “In order to ensure the effectiveness of the rights provided for in the Working Time Directive and the Charter, the Member States must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured.” So what exactly does that mean? And how can employers and employees both benefit from measuring employee time?  

What does the new EU time tracking law mean for employers?

As stated in the press release, EU employers must set up “an objective, reliable and accessible system” for tracking employee time during the workday. What’s not clearly stated is what that time tracking system should look like. Until more specific time tracking directives are made, employers should focus on implementing a system that will protect workers first. “The Court recalls that the worker must be regarded as the weaker party in the employment relationship,” the press release states. In other words, the time tracking system employers use should be one that guards the employee as well as the business and takes employee privacy and workers’ rights into consideration. It should also not place the burden on the employee, the way keeping a spreadsheet that can be lost or altered might. But what isn’t said and should be understood, however, is that a good time tracking system doesn’t have to be a huge burden on employers either. “Businesses don’t have to sacrifice contemporary flexibility for exact timekeeping,” says a recent Bloomberg article. “Modern time- and attendance-tracking software, often offered as a cloud-based service, works on mobile phones. Clocking in requires a tap on the screen, so even when you check work-related emails or take a call from your boss at home, tracking the time isn’t a major inconvenience. Some systems will automatically check in employees at customary work sites using GPS. Many of the packages are priced so even a small business can afford them. Most provide handy analytical tools.”  

What does the new ruling say about tracking workers’ time?

In a word, little. At least in regard to a specific system or software. The law simply states that employers across the EU, with few exceptions, must have an “objective, reliable and accessible” time tracking system in place. Beyond that, the EU has left it up to member states to iron out the details. As for what is mandated, the ruling currently says employers must have a time tracking system not just to keep track of overtime hours, but also to ensure that employees get their obligatory rest periods—at least 11 uninterrupted hours a day and 24 uninterrupted hours per week, as well as rest breaks after every six hours of work. The law appears to be mostly interested in “the protection of the safety and health of workers,” which it associates with upholding those overtime and rest period directives. So how is this time tracking ruling different from existing labour laws in the EU? Like states in the U.S., countries within the EU have their own unique labour laws. In Spain, for instance, the law says there must be 12 hours of rest between shifts, not 11. The new ruling acts much like the Fair Labor Standards Act does in the U.S., where employers in each state must abide by whatever law is more in favor of the employee—taking into account any existing federal and state regulations. According to the European Commission, “The EU complements policy initiatives taken by individual EU countries by setting minimum standards…Individual EU countries are free to provide higher levels of protection if they so wish.”  

How can business owners comply with the EU time tracking law?

Business owners can comply with the new time tracking law by investing in a system that tracks time accurately and objectively. Some time tracking software, like TSheets, has additional features that may come in handy for fulfilling this obligation. These include overtime alerts that let managers know when an employee is about to hit overtime, scheduling add-ons that help everyone keep track of how many hours employees are working and geofences, which trigger reminders for employees to clock in and out at each job site, curbing forgetfulness or the need to retroactively adjust time cards.  

How to track employee time accurately and objectively

The new ruling doesn’t establish specific guidelines for tracking employee time, but there are a few options for recording hours worked if you’d like to be sure you’re making efforts to comply with the law. One of these is with a spreadsheet, such as an Excel or Google sheet. Another is with automated time tracking software that is can be used on any desktop or smartphone. Digital solutions are better at keeping track of employee time data for multiple reasons, least of all is they keep permanent records organised over time and can remind employees to record their times each day. Employees can then submit their time for payroll each week or two, and things like sick leave or vacation can accrue automatically behind the scenes. Employers who need to track time spent on projects or clients will appreciate such software as well, since it can help measure the difference between how much time a project was predicted to take versus how long it actually took. In a recent study, our team found that customers who tracked time using TSheets saved an average of 3 hours every time they ran payroll, a win-win for employers and employees.*  

What are the benefits of employee time tracking?

There are many benefits to employee time tracking, for EU employers and beyond:
  • More accurate payroll
  • Protection of workers’ rights
  • Improved productivity
  • Increased transparency
  • Organised, digitised records
  • Increased trust between employees and employers
  • And more
Something employers don’t often realise is that objective time tracking can benefit them too. Think about it: When workers are asked to track time, as opposed to just writing down an estimate of how many hours they think they’ve worked, the time they record is more accurate. In fact, according to that recent study, businesses that use TSheets for time tracking report an average 6% reduction in payroll costs.* That’s a savings of time and money. Additionally, depending on how settings are configured, companies may be able to do additional things with their time tracking system. Things like scheduling, job costing, or sending invoices. At a bare minimum, most automated systems help keep track of employee overtime and can help employers make sure employees aren’t working unexpected overtime. Another benefit of time tracking is improved productivity. A recent study found 60% of workers feel taking a daily lunch break helps boost their productivity. But busy workers can sometimes forget to take that necessary mid-day break. Automated time tracking systems can help by sending employees reminders when it’s time to take a break or clock out for lunch—a helpful feature considering one of the new provisions is that employees must get a break after six hours of work. Finally, automated time tracking, especially, is good for employer-employee relations. Apps often require some level of transparency, both on the part of the employer and the employee, which keeps everyone honest. Employees are more likely to record their working hours accurately, and employers are less likely to underpay—one of the contributors that led to the EU’s ruling. While automated time systems often get a bad rap for being too invasive, many people love such software for the assurance or fairness it provides to all parties involved.  

What’s next for the EU and time tracking?

Now that the EU has ruled in favor of employee time tracking, the next step is for member states to evaluate their options and build on the law as they see fit. How will the ruling go into effect from country to country? And how might more stringent time tracking regulations alter the current employment landscape of the EU? Results remain to be seen.  
*Based on a survey of 924 businesses that use TSheets for payroll and report savings. On average, they report reducing the time it takes to run payroll by 3 hours and reducing gross payroll costs by 6% by increasing accuracy and reducing overpayments. TSheets conducted an internal survey in January 2018.
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