A working time account is an instrument for flexible working time management that documents plus and minus hours. It functions like a time credit account: overtime is accumulated and later compensated with time off. Since the German Federal Labor Court (BAG) ruling in 2022, employers are required to systematically record working hours – a working time account fulfills this requirement.
Definition: What is a Working Time Account?
A working time account documents the deviations between the contractually agreed target working hours and the actual hours worked. The principle is similar to a savings account: if an employee works more than agreed, a time credit (plus hours) is created. If less is worked, time debts (minus hours) are created.
The salary remains constant – compensation occurs later through time off or additional work. This allows both companies and employees to react flexibly to fluctuating order volumes or personal needs. Working time accounts are particularly common with flextime, hybrid working models, and in industries with seasonal fluctuations.
Important: Maintaining a working time account is not legally required. The account must be agreed in writing in the employment contract or in a works agreement, as it obligates employees to work overtime upon request.
Types of Working Time Accounts
Short-Term Accounts (Flextime Account, Overtime Account)
Short-term accounts serve to balance working time deviations in the short term. The compensation period is typically three to twelve months. The classic flextime account is the most common form: employees can decide for themselves when they work within a defined framework and reduce overtime later.
Long-Term Accounts (Lifetime Working Time Account, Value Credit)
Long-term accounts enable the accumulation of working time over years – for example, for a sabbatical, partial retirement, or early retirement. These accounts are subject to special regulations under Section 7b of the German Social Code IV (SGB IV) and require a value credit agreement. Important: Above a certain credit level, there is a legal obligation for insolvency protection under Section 7d SGB IV.
Traffic Light Account as a Management Tool
The traffic light account is a special form with three zones: In the green zone, employees manage their time freely. The yellow zone is the warning zone – further plus or minus hours require coordination with supervisors. In the red zone, the permitted limits have been exceeded, and measures must be taken to reduce the balance. This model enables early intervention when extreme balances occur.
Legal Framework
Working Hours Act and Works Agreement
There is no universally binding legal definition of the working time account. In practice, implementation usually occurs through works agreements, as the works council has a right of co-determination under Section 87 of the German Works Constitution Act (BetrVG). The agreement should regulate the following points: maximum plus and minus hours, compensation period, provisions for payment, and where applicable, insolvency protection.
Minimum Wage Act – Special Rules for Working Time Accounts
For employees receiving the statutory minimum wage, special regulations apply under Section 2 (2) of the German Minimum Wage Act (MiLoG): The working hours posted to the working time account per month may not exceed 50 percent of the contractually agreed working time. Hours beyond this must be paid on the last banking day of the relevant month. Compensation must occur within twelve calendar months.
Federal Labor Court Ruling 2022 and Working Time Recording Obligation
The German Federal Labor Court ruled on September 13, 2022 (Case No. 1 ABR 22/21) that employers in Germany are obligated to systematically record their employees' working hours. This obligation arises from the interpretation of the Occupational Safety and Health Act in conformity with EU law. A working time account fulfills this documentation obligation and also offers the advantage of working time flexibility.
Plus and Minus Hours – What Applies?
Accumulating and Reducing Overtime
Plus hours are created when more than the agreed working time is worked. Reduction occurs through paid time off at a later date. The maximum level of plus hours should be defined in the works agreement or employment contract. For temporary agency workers, the German Temporary Employment Act sets an upper limit of 200 plus hours (in exceptional cases 230 hours).
Minus Hours and Their Consequences
From a legal perspective, minus hours represent a salary advance from the employer. They are created when less than the agreed time is worked. Employees are obligated to make up these hours later. Important: Minus hours may not be recorded for public holidays, vacation, or sick leave. If the minus hours are caused by the employer (e.g., lack of orders), this constitutes default of acceptance – offsetting against salary is then not permitted.
Compensation Period and Expiration
The statutory limitation period for overtime is three years. However, shorter periods can be agreed in employment contracts or works agreements. For minimum wage earners, compensation within twelve months is legally required. Employers should regularly monitor time account balances and actively manage compensation.
Working Time Account Upon Termination
When the employment relationship ends, existing balances must be settled. Plus hours are either reduced through time off before the contract ends or paid out. For employees in the minimum wage range, payment must be made no later than the month following termination.
Minus hours may only be offset against outstanding salary if the employee is responsible for their creation. If the minus hours were caused by the employer (e.g., through short-time work or lack of orders), they expire without salary reduction. The specific regulations should be reviewed in the employment contract or works agreement.
Practical Implementation for HR
Introducing a working time account requires careful planning. HR managers should consider the following points:
Checklist for Implementation:
- Obtain employee consent (regulation in employment contract)
- If a works council exists: negotiate a works agreement
- Define maximum plus and minus hours
- Define compensation period (e.g., 6 or 12 months)
- Establish regulations for termination and payment
- For long-term accounts: check insolvency protection (Section 7d SGB IV)
- Select time recording system (digital or analog)
- Inform employees about rights and obligations
Flexible working time models are an important factor for employer branding and a positive candidate experience. They contribute to health in the workplace by promoting work-life balance.
Frequently Asked Questions About Working Time Accounts
What is a working time account?
A working time account is an instrument for recording and flexibly managing working time. It documents deviations between the agreed target hours and actual hours worked. Plus hours (overtime) and minus hours are balanced and must be compensated within a defined period. The account can be maintained in analog form (e.g., Excel spreadsheet) or digitally (time tracking software).
Is a working time account mandatory?
No, maintaining a working time account is not legally required. However, since the Federal Labor Court ruling of September 13, 2022, there is an obligation for systematic working time recording. A working time account fulfills this requirement. Employee consent is required for implementation, and the works council has a right of co-determination regarding the design.
Can overtime in a working time account expire?
Generally, the statutory limitation period of three years applies. However, shorter compensation periods can be agreed in employment contracts or works agreements. For employees receiving minimum wage, compensation must occur within twelve calendar months. Employers should therefore actively ensure regular reduction.
What happens to the working time account upon termination?
Plus hours are either reduced through time off before the contract ends or paid out. For minimum wage earners, payment must be made no later than the month following termination. Minus hours may only be offset if the employee is responsible for them. For employer-caused minus hours (default of acceptance), no salary deduction is permitted.
What do I need to consider regarding minimum wage?
Under Section 2 (2) MiLoG, a maximum of 50 percent of the contractually agreed working time may be posted to the working time account per month. Hours beyond this must be paid immediately at the end of the month. Compensation must occur within twelve calendar months. Upon termination of employment, the credit must be paid out in the following month.
What is the difference between short-term and long-term accounts?
Short-term accounts (e.g., flextime accounts) are balanced within one year and serve short-term flexibility. Long-term accounts (value credits) enable accumulation over years – for sabbaticals or early retirement, for example. Long-term accounts require a value credit agreement under Section 7b SGB IV and are subject to mandatory insolvency protection.
What is a traffic light account?
A traffic light account is a working time account with three zones: In the green zone, employees can freely decide on their time allocation. The yellow zone is the warning zone – further deviations require coordination with supervisors. In the red zone, limits have been exceeded, and binding measures for reduction must be agreed.
Do I need insolvency protection for working time accounts?
For normal short-term accounts, generally not. For value credits (long-term accounts), there is a legal obligation under Section 7d SGB IV for insolvency protection once the credit exceeds the monthly reference amount including social security contributions. For temporary agency workers, a special rule applies: proof of insolvency protection is required from 150 plus hours onward. Possible security instruments include guarantees, pledges, or trust accounts.
Conclusion
A working time account offers companies and employees the opportunity to design working hours flexibly and respond to fluctuating requirements. For HR managers, it is important to know the legal framework: the Federal Labor Court ruling of 2022 on working time recording obligations, the special rules for minimum wage earners, and the requirements for long-term accounts under German Social Code IV. A carefully formulated works agreement creates legal certainty for both parties.
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Sources
- Minimum Wage Act (Mindestlohngesetz – MiLoG). Federal Republic of Germany, 2025.
https://www.gesetze-im-internet.de/milog/ - Social Code Book Four (Sozialgesetzbuch IV – SGB IV). Federal Republic of Germany, 2025.
https://www.gesetze-im-internet.de/sgb_4/ - Federal Labor Court Decision on Working Time Recording (Case No. 1 ABR 22/21). Federal Labor Court (Bundesarbeitsgericht), 2022.
https://www.bundesarbeitsgericht.de/entscheidung/1-abr-22-21/ - FAQ on Working Time Recording. Federal Ministry of Labor and Social Affairs (BMAS), 2023.
https://www.bmas.de/DE/Arbeit/Arbeitsrecht/Arbeitnehmerrechte/Arbeitszeitschutz/Fragen-und-Antworten/faq-arbeitszeiterfassung.html - Works Constitution Act (Betriebsverfassungsgesetz – BetrVG). Federal Republic of Germany, 2025.
https://www.gesetze-im-internet.de/betrvg/ - Working Time Account: Legal Requirements for Employers. Haufe, 2025.https://www.haufe.de/personal/arbeitsrecht/arbeitszeitkonto-rechtliche-vorgaben-fuer-arbeitgeber_76_445170.html
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