New Court Ruling Makes Timekeeping Mandatory for All EU Companies
On May 14th, the European Court of Justice (ECJ) ruled that companies operating in the EU must set up a system that tracks and records the duration of time worked each day by each worker.
“In order to ensure the effectiveness of the rights provided for in the Working Time Directive and the Charter, the (EU) 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. Each country will be free to define how to implement such a system”, the ECJ said in a statement.
This decision comes as a result of a lawsuit brought against Deutsche Bank by Federación de Servicios de Comisiones Obreras (CCOO), a Spanish trade union.
According to the trade union, Spain’s lax timekeeping laws did not require detailed recordkeeping of the hours worked by employees, which led to Deutsche Bank underreporting the hours and underpaying for overtime. The CCOO argued that this violated EU labor law set out by the EU Working Time Directive. This directive stipulates that the average working time for a seven-day period must not exceed 48 hours, including overtime, and that a worker is entitled to a minimum of 11 consecutive hours of rest in every 24-hour period, among other things. The Court of Justice, the highest court in the EU, agreed with the challenge.
With the ruling delivered, EU countries will have to work out their own specific arrangements for enforcing the new law, with considerations for “the particular characteristics of each sector” and other factors such as company size.
Spain itself has already moved to bolster its timekeeping requirements. The government recently introduced rules requiring all companies, big and small, to keep records of employees’ daily working hours with fines to be imposed on those that fail to keep records for at least four years.
Consequently, for companies operating in the EU member states, it now becomes a top priority to take the steps necessary to set up a timekeeping system. One option that can address the timekeeping needs for these companies is a revolutionary cloud-based software system called Mihi.
Mihi provides time and attendance, vacation, leave management, and benefits administration services for companies with a global workforce. It automates the collection of detailed work-time data for hourly, salaried, or contingent employees.
The software provides a system for complete Human Capital Management (HCM) needs globally while lowering compliance risk:
- It automatically applies labor, pay, and timekeeping requirements – both statutory and non-statutory – at country, state, and provincial levels
- This centralized policy management means you’re audit-ready at all times, in all your countries of operation
- Real-time updates and alerts allow managers to monitor compliance and avoid undue overtime
- Employees get greater transparency with easy online access to clock in/clock out functionality, timesheets, and visibility into their time & attendance data
- Preset approval workflows ensure quick responses and resolutions, creating a more efficient, productive workforce