Germany: Overtime payable to part-time employees

Employer Action Code: Act

The Federal Labor Court (Bundesarbeitsgericht – BAG) recently ruled that part-time workers are generally entitled to overtime compensation for hours worked over their agreed-upon part-time hours. Common practice in Germany, consistent with the terms of many collective bargaining agreements (CBAs), has been to pay overtime compensation to part-time workers only when they work beyond the regular hours of full-time employees. The BAG (the court of last resort on labor issues) found, after obtaining clarification of EU law from the European Court of Justice (ECJ), that this practice, in the absence of objective reasons, discriminates against part-time workers and also indirectly against women.

Key details

The case before the BAG involved a nurse working 40% of a full-time schedule for an outpatient dialysis provider with over 5,000 employees. Under the applicable CBA, only overtime beyond the monthly hours of a full-time employee is subject to a 30% overtime pay premium, either in addition to normal pay or as a working time credit. The worker sued her employer to receive the 30% overtime premium for hours she had worked beyond her regular 40% work schedule but under full-time hours; she also sued for lump sum compensation for gender-based discrimination. Over 90% of the employer's part-time workers covered by the CBA are women.

Following the ECJ's guidance, the BAG ruled that:

• It found no objective justification in this case for the unequal treatment of the part-time worker regarding overtime compensation and therefore that the relevant CBA provisions are invalid and the employee is entitled to the 30% premium for all hours worked beyond her 40% schedule
• Through application of the CBA, the worker also experienced indirect discrimination based on gender; the BAG awarded the worker 250 euros, describing it as a necessary and sufficient amount to compensate the worker and have a deterrent effect on the employer

Employer implications

Nearly 90% of companies in Germany surveyed by WTW employ part-time workers. Employers should obtain legal counsel on whether they need to change their overtime compensation practices for part-time employees, based on their specific circumstances.

More broadly, over 35 million workers (17% of the total EU workforce) were part-time employees in 2023, with 75% being women (Eurostat data). Employers across the EU should also consider the effects of the ECJ's ruling that this case violates EU laws against treating part-time employees less favorably than comparable full-time employees as well as laws against direct and indirect gender-based discrimination — unless objective reasons exist (which is for national courts to determine).