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Employees under scrutiny: How far can workplace surveillance go?

Raphael Lugowski,
If you have any questions about this topic, please contact me by phone at 040 524 717 830 or by email to lugowski@smart-arbeitsrecht.de

Legal boundaries between control, data protection and co-determination

The technical monitoring of employees has long been a part of everyday business life. Cameras in entrance areas, GPS systems in vehicles, software for performance or communication analysis, and IT-supported monitoring in home offices are all technically feasible today. However, only some of these methods are legally permissible. This is because every form of employee monitoring infringes on the general right to privacy and is subject to strict labor and data protection laws.


What awaits you:

  1. Legal boundaries between control, data protection and co-determination
  2. Data protection as the starting point for all surveillance
  3. Video surveillance, GPS and IT tools
  4. Monitoring of emails and digital communication
  5. Performance control and proportionality
  6. Prohibitions on the use of evidence
  7. Co-determination of the works council
  8. Conclusion
  9. FAQs

Data protection as the starting point for all surveillance

The central benchmark is the General Data Protection Regulation (GDPR). Every monitoring measure constitutes the processing of personal data and therefore requires a sound legal basis. Article 6 of the GDPR and, in the employment context, Section 26 of the German Federal Data Protection Act (BDSG) are particularly relevant.

Monitoring is only permissible if it is necessary and the employer's interests do not outweigh the employees' fundamental rights. A general appeal to productivity, efficiency, or control is insufficient. Necessity, purpose, and proportionality must each be specifically justified and documented.

Consent does not usually play a significant role in the employment relationship, as it is generally not given voluntarily due to the dependency relationship.

Video surveillance, GPS and IT tools

Video surveillance may be permissible, for example in publicly accessible areas such as entrances or sales floors, if it serves security purposes and is not aimed at the permanent performance monitoring of individual employees. It is generally not permitted in particularly sensitive areas such as changing rooms, restrooms, or break rooms.

GPS tracking of vehicles is only permitted to the extent that it is necessary for operational purposes, such as route planning or vehicle security. Continuous monitoring or tracking outside of working hours is prohibited. Employees must be transparently informed about the type, scope, and purpose of the tracking.

The use of software to analyze behavior or performance is particularly sensitive. Covert surveillance measures such as keyloggers, screenshot tools, or comprehensive tracking constitute a serious intrusion into privacy. The Federal Labor Court has ruled that such measures are only permissible in cases of concrete suspicion of a serious breach of duty and may not be used without cause.

Monitoring of emails and digital communication

Reviewing work emails or communication tools like Teams or Slack is particularly complex from a legal perspective. In addition to data protection law, telecommunications law also plays a role. Depending on the nature of private use, the confidentiality of telecommunications may apply, now regulated by the Telecommunications and Digital Services Data Protection Act.

Regardless, access to communications is only permissible if there is a clear legal basis under data protection law. For internal investigations, Section 26 Paragraph 1 Sentence 2 of the German Federal Data Protection Act (BDSG) is particularly relevant, as it permits processing in cases of suspected criminal offenses or serious breaches of duty. This requires documented factual evidence, the necessity of the measure, and a balancing of interests in favor of the employer.

Continuous or indiscriminate monitoring of communications is inadmissible.

Performance control and proportionality

Performance reviews are generally permissible under labor law, but are subject to strict limits. Every review infringes on the general right to privacy of employees and simultaneously constitutes the processing of personal data. Therefore, the principles of necessity, proportionality, and transparency are paramount.

In particular, permanent or continuous monitoring that creates constant pressure to conform is inadmissible. Technical capabilities do not justify comprehensive control. However, time-limited, random, and purpose-oriented performance reviews may be permissible, provided they serve a legitimate aim and no less intrusive means are available.

Covert monitoring is generally unlawful. Employees must be informed whether and to what extent performance data is being collected. Objective measurements of individual work results may be permissible, as long as they do not lead to the creation of a comprehensive behavioral or personality profile.

In companies with a works council, Section 87 Paragraph 1 No. 6 of the Works Constitution Act (BetrVG) must also be observed. The use of technical systems for performance monitoring is legally contestable without prior co-determination.

Prohibitions on the use of evidence

A common misconception is that data protection breaches automatically lead to the exclusion of evidence. This is not the case. Instead, the courts conduct a balancing of interests. An exclusion of evidence is only considered if the employee's right to privacy outweighs the employee's right to privacy in the specific case.

If data was collected openly and serves to investigate intentional breaches of duty, it can be used despite data protection violations. Data protection is not protection against crime.

Co-determination of the works council

In companies with a works council, monitoring is further limited by works constitution law. According to Section 87, Paragraph 1, Number 6 of the Works Constitution Act (BetrVG), there is a mandatory right of co-determination regarding the introduction and use of technical equipment that is suitable for monitoring the behavior or performance of employees. The decisive factor is the objective suitability, not the intended use.

This right of co-determination regularly concerns the technical equipment as such. However, individual measures taken in cases of concrete suspicion are not necessarily subject to co-determination, provided they are carried out within the framework of existing company agreements.

Conclusion

Employers have legitimate interests in monitoring their employees. However, these interests end where personal rights, data protection, and employee participation are violated. Technical capabilities do not justify unlimited surveillance. Every measure must be proportionate, transparent, and legally sound.

For companies, this means that monitoring is only legally sound with a clear legal basis, thorough documentation, and early involvement of the works council. For employees, the rule is: not all monitoring is permitted – and unlawful monitoring remains open to challenge.

Frequently Asked Questions for employee monitoring and internal investigations

When is an employer allowed to monitor employees or conduct internal investigations?
Is mere suspicion sufficient grounds to search emails or communications?
Is it permissible to review private content in professional email accounts?
Is continuous or indiscriminate surveillance permissible?
What role does informing employees play?
Does the works council need to be involved in monitoring measures?
Are external service providers allowed to be used in internal investigations?
Is a data protection impact assessment necessary?
Does a data protection breach automatically lead to the exclusion of evidence?
How can companies minimize legal risks associated with employee monitoring?

Employment law 2026: Employers must be aware of these changes now

Raphael Lugowski,
If you have any questions about this topic, please contact me by phone at 040 524 717 830 or by email to lugowski@smart-arbeitsrecht.de

New obligations, increasing requirements and growing liability risks for companies

The year 2026 brings with it a number of changes to labor law that will have significant practical implications for employers. Human resources departments, in particular, will need to implement new transparency obligations, documentation requirements, and compensation regulations in a legally compliant manner. While employees in certain areas will benefit financially, the organizational and legal burden for companies will increase noticeably. Early legal advice from a labor law expert will help reduce liability risks and avoid compliance violations.


What awaits you:

  1. New obligations, increasing requirements and growing liability risks for companies
  2. Minimum wage increase and new challenges for mini-jobs
  3. Active pension: New incentives with potential for legal conflict
  4. Later retirement for severely disabled people
  5. Pay transparency will become a central issue in labor law in 2026.
  6. Time tracking remains a perennial issue.
  7. Works council elections 2026 and increasing susceptibility to errors
  8. Conclusion: 2026 requires active labor law management
  9. FAQs

Minimum wage increase and new challenges for mini-jobs

As of January 1, 2026, the statutory minimum wage was raised to €13.90 gross per hour. The legal basis is Section 1, Paragraph 2 of the Minimum Wage Act (MiLoG). Employers are obligated to comply with this minimum wage, regardless of the contractual arrangements.

There are immediate consequences for marginal employment. The earnings limit for mini-jobs has been adjusted to €603 per month. The relevant provision is Section 8, Paragraph 1, Number 1 of the German Social Code, Book IV (SGB IV). In practice, the combination of the rising minimum wage and the fixed earnings limit means that the maximum permissible monthly working hours will decrease further. Even minor overtime can trigger mandatory social security contributions. Employers should therefore carefully monitor working hours and regularly review existing employment contracts.

The minimum wage increase is particularly important in the care sector. From July 2026, higher sector-specific minimum wages will apply based on the Care Working Conditions Ordinance. Care facilities must adjust their remuneration structures accordingly to avoid violations of the Minimum Wage Act.

Active pension: New incentives with potential for legal conflict

The so-called "active pension" was introduced at the beginning of 2026. It is designed to incentivize employees to continue working voluntarily even after reaching the standard retirement age. Additional monthly earnings of up to €2,000 remain tax-free; income exceeding this amount is subject to regular income tax.

In principle, the existing system will remain in place under social security law. The regulation is initially temporary and will be evaluated after two years. The exclusion of certain groups of people, particularly the self-employed, freelancers, and those in marginal employment (minijobs), is legally controversial. In this context, constitutional concerns are already being discussed with regard to the principle of equal treatment enshrined in Article 3, Paragraph 1 of the Basic Law. Initial lawsuits have been announced and could lead to court decisions during 2026.

Later retirement for severely disabled people

For severely disabled individuals, the retirement age for a full pension without deductions has been raised. According to Section 236a of the Sixth Book of the German Social Code, a full pension without deductions is now only possible upon reaching the age of 64. Early retirement from the age of 61 remains permissible, but is still subject to permanent deductions. A recognized degree of disability of at least 50 is a prerequisite. Transitional provisions apply to older age groups.

Pay transparency will become a central issue in labor law in 2026.

The greatest need for action on the part of employers arises from the implementation of the EU Pay Transparency Directive (Directive (EU) 2023/970), which must be transposed into national law by 7 June 2026. The aim is the consistent enforcement of the principle of equal pay for equal or equivalent work.

In the future, employers will be required to include information about compensation or salary ranges in job postings. Furthermore, employees' rights to information will be expanded. This development is linked to Section 7 of the German Pay Transparency Act (EntgTranspG) and goes significantly beyond its scope. Violations will result in fines and claims for damages.

These guidelines are supported by the current case law of the Federal Labor Court. According to the so-called "pair comparison" case law, it is sufficient that a female employee earns less than a specifically named colleague in a comparable position. In this case, discrimination is presumed, and the employer bears the burden of proof for objective reasons for the pay difference (Federal Labor Court, Judgment of October 23, 2025, Case No. 8 AZR 300/24).

Time tracking remains a perennial issue.

The obligation to record working time already exists. The legal basis is Section 3 Paragraph 2 Number 1 of the Occupational Health and Safety Act. The Federal Labour Court has expressly confirmed this obligation and derived it from the Working Time Directive in accordance with EU law (Federal Labour Court, decision of 13 September 2022, case no. 1 ABR 22/21).

Legal regulations are expected to be more specific by 2026, particularly regarding electronic time tracking and more flexible working time models. Even though details are still pending, employers should already ensure that working hours are fully, objectively, and transparently documented.

Works council elections 2026 and increasing susceptibility to errors

Regular works council elections will take place between March and May 2026. The relevant provisions are those of the Works Constitution Act, in particular Sections 7 et seq. The increasing complexity of company organizational structures increases the susceptibility of the election process to errors. Formal errors can lead to an election challenge under Section 19 of the Works Constitution Act. Therefore, early legal support during election preparation is strongly recommended.

Conclusion: 2026 requires active labor law management

The 2026 labor law will not bring relief to employers, but rather a further intensification of legal obligations. Minimum wage, pay transparency, time tracking, and works council elections require structural adjustments and legally sound processes. Those who act early and review their internal procedures reduce legal risks and avoid costly disputes. Sound legal advice on labor law is a crucial factor for success in this regard.

Frequently asked questions about Labor Law 2026

What changes to labor law will come into effect for employers in 2026?
What will the statutory minimum wage be in 2026?
What impact will the minimum wage in 2026 have on mini-jobs?
What does the active pension mean for employers and employees?
What obligations does the EU Pay Transparency Directive 2026 entail?
From what point are companies required to produce payroll reports?
When does unlawful pay discrimination occur?
Will there be a legal requirement to record working hours in 2026?
Will overtime pay be tax-free in 2026?
Why should employers seek legal advice on employment law in 2026?

Works council and artificial intelligence: Why AI surveys trigger new co-determination rights

Raphael Lugowski,
If you have any questions about this topic, please contact me by phone at 040 524 717 830 or by email to lugowski@smart-arbeitsrecht.de

Employee surveys: between digitalization, surveillance and co-determination

Digital employee surveys have become standard practice in modern HR. However, the use of AI-supported analytics is fundamentally changing the legal framework. What was once considered a harmless, anonymous survey can now be a monitoring tool subject to co-determination. Companies using AI-based survey or people analytics tools are legally obligated to involve the works council. Otherwise, the entire system risks being deemed legally invalid.


What awaits you:

  1. Employee surveys: between digitalization, surveillance and co-determination
  2. Co-determination according to the Works Constitution Act
  3. Anonymity does not protect against participation.
  4. Information and control rights of the works council
  5. Selection decisions and AI
  6. Impact of the European AI Regulation
  7. Case law on the demarcation
  8. Practical consequences for companies
  9. Conclusion
  10. FAQs

Co-determination according to the Works Constitution Act

The central point of reference is Section 87 Paragraph 1 Number 6 of the Works Constitution Act (BetrVG). According to this provision, the works council has a mandatory right of co-determination regarding the introduction and use of technical equipment designed to monitor the behavior or performance of employees. The decisive factor is not whether monitoring actually takes place, but whether the system is objectively capable of doing so. The mere theoretical possibility of evaluating performance or behavior is sufficient.

This is precisely where the use of AI comes in. Modern survey platforms no longer limit themselves to collecting individual responses. They analyze free text, recognize sentiments, create group profiles, and evaluate response behavior. Even if individuals are not to be identified, the technical possibility of re-identification or group assignment can be sufficient to trigger participation.

Anonymity does not protect against participation.

In practice, it is often argued that employee surveys are anonymous and therefore not subject to co-determination. This argument no longer holds true for AI-supported systems. The decisive factor is not the employer's intended use, but the technical capabilities of the tool employed.

AI-based sentiment analysis, automatic reminder functions, or the evaluation of participation rates can allow conclusions to be drawn about behavior, engagement, or work discipline. This affects workplace conduct, which can additionally establish a right of co-determination under Section 87 Paragraph 1 Number 1 of the German Works Constitution Act (BetrVG).

Information and control rights of the works council

In addition to legally enforceable co-determination rights, there are extensive rights to information. According to Section 90, Paragraph 1, Number 3 of the German Works Constitution Act (BetrVG), the employer is obligated to inform the works council at an early stage about the planning and introduction of new technical processes. This explicitly also applies to AI systems.

The employer must disclose not only which questions are asked, but also how the data is processed and what analyses are technically possible. The works council is entitled to a transparent explanation of how the system works. A mere reference to data protection or provider certifications is insufficient.

Section 80, paragraph 3 of the German Works Constitution Act (BetrVG) is particularly relevant. Since the Works Council Modernization Act, it has been explicitly clarified that the works council may regularly consult experts when AI is being used. The involvement of external expertise is legally required. This is intended to compensate for the employer's structural knowledge advantage.

Selection decisions and AI

AI systems are increasingly being used for personnel-related decisions, such as evaluations, talent analyses, or the preparation of dismissals. If AI is used in the development or application of selection guidelines, Section 95 Paragraph 2a of the German Works Constitution Act (BetrVG) applies. The works council's right of co-determination exists even if the selection criteria are developed wholly or partially automatically.

Impact of the European AI Regulation

The European AI Regulation (Regulation (EU) 2024/1689) has been in force since August 2024. While it does not contain direct co-determination rules, it tightens the requirements for transparency, documentation, and traceability of AI systems. These requirements have an indirect impact on works constitution law.

An AI system whose functionality is not clearly documented cannot be properly reviewed by the works council. Without this transparency, legally compliant implementation is virtually impossible. Therefore, employers must disclose how AI-supported surveys work, even for regulatory reasons alone.

Case law on the demarcation

Current case law demonstrates that not every use of AI automatically requires co-determination. The Hamburg Labor Court ruled on January 16, 2024 (Case No. 24 BVGa 1/24) that no co-determination rights apply when employees voluntarily use AI tools via private accounts and the employer has no access to the data. However, the legal assessment changes as soon as company systems are used or evaluations are carried out centrally.

Practical consequences for companies

Companies should not treat AI-supported surveys as a purely HR measure, but rather as a technical implementation subject to co-determination. Significant risks arise from the early involvement of the works council. These include not only conflicts under works constitution law, but also the invalidity of the entire measure.

A company agreement is regularly required, clearly regulating which data is collected, which analyses are permitted, and for what purposes the results may not be used. In particular, use for performance or behavior monitoring must be explicitly excluded.

Conclusion

The use of AI in employee surveys marks a legal turning point. Anonymity is no longer sufficient to exclude co-determination rights. The crucial factor is the system's technical capability for monitoring. Employers should only introduce AI surveys if transparency, documentation, and co-determination are guaranteed from the outset. Those who involve the works council too late, or not at all, risk not only conflicts but also a legally untenable system.

Frequently asked questions about the co-determination rights of the works council in AI surveys

Does the works council need to be involved in AI-supported employee surveys?
Is it sufficient if the employee survey is conducted anonymously?
When does an AI survey qualify as a surveillance tool?
What role does Section 87 Paragraph 1 No. 1 of the Works Constitution Act play in AI surveys?
What information obligations does the employer have towards the works council?
Is the works council allowed to consult experts on AI systems?
Does co-determination also apply to people analytics tools?
Can AI surveys be introduced without a company agreement?
What significance does the EU AI Regulation have for co-determination?
Is there already case law regarding AI surveys and co-determination?

When the machine takes over the job: Is AI a valid reason for dismissal?

Raphael Lugowski,
If you have any questions about this topic, please contact me by phone at 040 524 717 830 or by email to lugowski@smart-arbeitsrecht.de

Corporate restructuring through artificial intelligence and its limits under labor law

Artificial intelligence is fundamentally changing work processes. Tasks previously performed by employees can increasingly be automated or fully digitized. This inevitably raises the question for employers of whether the use of AI can justify dismissals. The short answer is: Yes, in principle, it is possible. The long answer is: only under clear legal conditions and with significant legal requirements for justification.


What awaits you:

  1. Corporate restructuring through artificial intelligence and its limits under labor law
  2. Legal starting point in dismissal protection law
  3. Employer's burden of proof
  4. AI rarely replaces entire jobs.
  5. Judicial review of corporate AI decisions
  6. Role of the European AI Regulation
  7. Conclusion: AI can justify dismissals, but not across the board.

Legal starting point in dismissal protection law

Within the scope of the German Protection Against Unfair Dismissal Act (KSchG), a dismissal is only valid if it is socially justified. Section 1, paragraph 2, sentence 1 of the KSchG is decisive. According to this provision, social justification exists if urgent operational requirements preclude the continued employment of the employee.

Such a business reason can also exist if the employer restructures its organization and has certain tasks performed by AI systems in the future. The use of new technologies generally falls under entrepreneurial freedom of decision. Labor courts do not examine whether this decision is economically sensible or technically optimal. Even misjudgments must be accepted as long as the decision is not obviously unreasonable, irrational, or arbitrary.

Employer's burden of proof

However, the crucial factor is not the abstract decision to adopt AI, but its concrete implementation. The employer must provide a comprehensible explanation of which tasks will be eliminated in the future and why the specific job in question will become permanently redundant. General references to digitalization, automation, or efficiency improvements are insufficient for this purpose.

What is needed, rather, is a concrete demonstration of how the use of AI affects work organization. Only if it is established that the need for employment has actually ceased and no other employment opportunity exists can a dismissal for operational reasons be legally valid.

AI rarely replaces entire jobs.

In practice, the use of AI leads to changes in job profiles far more often than to the complete elimination of jobs. This is precisely where a key legal issue lies. If only the content of the work changes, the question arises whether it is reasonable to expect the employer to provide further training or retraining for the employee.

Whether something is reasonable is always a case-by-case question. Key factors include qualifications, the duration of the retraining, costs, and prospects of success. It is generally unreasonable to expect an employee to undertake a completely new academic education to avoid dismissal. However, it can easily be considered reasonable to provide employees with further training in the use of AI-supported systems if they can continue to perform value-adding monitoring or evaluation tasks.

Only if continued employment is not possible even after retraining and the overall need for personnel decreases, can a dismissal for operational reasons be considered. In this case, social criteria for selection and the lack of vacant positions must also be taken into account.

Judicial review of corporate AI decisions

Labor courts have only limited powers to review business decisions. They do not replace the employer's decision with their own assessment. Nevertheless, dismissals are subject to a substantive plausibility review.

Problems can arise when dismissals are based on AI systems whose operation is opaque or prone to error. If the employer cannot explain how the AI arrived at its decision-making basis, or if personnel decisions are based on unreliable systems, this can call into question the social justification of the dismissal.

Role of the European AI Regulation

The European AI Regulation (Regulation (EU) 2024/1689) has been in effect since August 2024. While it does not directly regulate the right to terminate contracts, it sets binding requirements for the use of AI systems. Operators are obligated to use AI transparently, comprehensibly, and in compliance with regulations.

If an employer bases a dismissal for operational reasons on an AI system that violates these regulations, this can have indirect consequences under labor law. A dismissal based on unlawful or improperly documented use of AI is contestable. Employers should therefore carefully document the systems they use, their functions, and their integration into decision-making processes.

Conclusion: AI can justify dismissals, but not across the board.

The use of artificial intelligence can constitute grounds for dismissal due to operational requirements. However, it does not exempt employers from the strict requirements of dismissal protection law. The decisive factor is not the technology itself, but its specific impact on the workplace.

Employers must be able to demonstrate that jobs are indeed permanently eliminated, that continued employment or retraining is unreasonable, and that all other requirements for a dismissal due to operational reasons have been met. Employees should have dismissals justified by AI carefully reviewed, as not every automation justifies job loss.


Who is liable when artificial intelligence is used in a company?

Raphael Lugowski,
Wer haftet beim Einsatz von Künstlicher Intelligenz im Unternehmen
If you have any questions about this topic, please contact me by phone at 040 524 717 830 or by email to lugowski@smart-arbeitsrecht.de

The use of artificial intelligence is already a reality in the daily work of many companies. Whether it's text creation, data analysis, customer communication, or internal decision support: AI systems are intended to accelerate processes and reduce costs. At the same time, however, the legal risk is increasing. Errors, legal violations, or damages caused by AI raise a crucial question: Who is actually liable when something goes wrong?

The answer is complex. A separate AI liability regulation does not yet exist. Companies must therefore continue to adhere to the general principles of civil and labor law.


What awaits you:

  1. AI itself is not liable – why artificial intelligence is not a legal subject
  2. Primary liability lies with the employer when using AI
  3. Employee liability – internal compensation for damages and burden of proof
  4. Breaches of duty in the handling of AI in the employment relationship
  5. Manufacturer liability and new product liability for AI software
  6. Failed AI Liability Directive and current legal uncertainty
  7. Liability of management and board members in the use of AI
  8. Practical tip: Actively manage liability risks when using AI
  9. FAQs – Frequently Asked Questions about Liability in the Context of Artificial Intelligence in Employment Relationships

The AI itself is not liable.

Artificial intelligence is not a legal entity. It can be neither a bearer of rights nor of obligations. Liability of AI "as such" is therefore excluded. The party liable is always a natural or legal person who uses, provides, or controls the AI. In business practice, this is regularly the employer.

Primary liability lies with the employer

If the use of AI causes damage, for example through faulty content, data protection violations, or breaches of contract, the employer is initially held liable. This follows from the general organizational and entrepreneurial risk. Anyone integrating AI systems into their business must organize, manage, and monitor their use in a legally compliant manner.

Furthermore, employers must be held accountable for breaches of duty committed by their employees. According to Section 278 of the German Civil Code (BGB), a debtor is liable for the fault of their agents. When using AI, employees regularly act within the employer's sphere of responsibility, even if they violate internal guidelines. This liability only ceases when the connection to the employer's operational activities is completely absent.

This attribution of liability gains further significance through the AI Regulation. According to Article 4 of the AI Regulation, operators of AI systems have a training obligation. Employers must ensure that employees possess sufficient AI competence when working with AI systems. Failure to provide training, or inadequate training, can further weaken the company's liability position.

Employee liability is limited

Even though the employer is primarily liable, the question arises as to possible recourse against the employees. Here, the principles of internal compensation for damages, developed by case law, come into play.

Employees are not liable, or only liable to a limited extent, for work-related activities. In cases of slight negligence, liability is completely excluded. In cases of ordinary negligence, partial liability may apply. In cases of gross negligence or intent, the employee is generally fully liable. This limitation of liability is based on a discretionary application of Section 254 of the German Civil Code (BGB) and takes into account the fact that the employer structurally determines the working conditions and risks.

In addition, Section 619a of the German Civil Code (BGB) applies to employment relationships. Unlike in general contract law, the employee's fault is not presumed. The employer bears the burden of proof and must demonstrate that the employee is responsible for a breach of duty. In practice, therefore, claims for recourse are often difficult to enforce.

Breaches of duty in the handling of AI

Typical breaches of duty in connection with AI can lie in both the operation and the monitoring of the systems. While prompting is considered the actual act of use, employees regularly also have a duty to monitor and supervise the results. However, this duty is limited to obvious errors. A complete guarantee of the content of AI results cannot generally be demanded of the employee.

The decisive factor is the individual performance capacity of each employee. The Federal Labor Court has clarified that the employee must perform to the extent that they are personally capable. An objective ideal is not the determining factor.

Manufacturer liability and new product liability

The liability of AI providers is becoming increasingly important. For a long time, it was disputed whether software should even be considered a product under product liability law. This uncertainty is significantly reduced by the EU's new Product Liability Directive. In the future, software will explicitly fall under the definition of a product. Manufacturers will then be liable not only for initial defects but also for damages resulting from omitted or faulty updates.

This becomes particularly relevant for companies when they develop or operate their own AI systems, such as internal chatbots or automated decision-making systems. In such situations, they themselves can fall into the role of the liable manufacturer.

Failed AI Liability Directive and open legal situation

The originally planned AI Liability Directive, which was intended to regulate liability issues in cases of violations of the AI Regulation, was withdrawn by the EU Commission. Among other things, it envisaged easing the burden of proof for injured parties and a presumption of causation in certain cases of breach of duty. These regulations have not yet entered into force.

For the time being, the existing principles of civil and labor law will remain in effect. For those who have suffered damages, this means high demands on the burden of proof and the establishment of causality. For companies, however, this does not mean peace of mind, but rather increased uncertainty, as future legislative amendments are always possible.

Liability of management and board of directors

Liability risks don't just affect the company itself. The governing bodies of legal entities can also be held personally liable. Managing directors of a GmbH (limited liability company) and board members of an AG (stock corporation) are obligated to ensure proper organization and compliance with the law. This obligation also includes the legally compliant use of AI systems, including training and compliance structures.

If organizational deficiencies lead to damages, the company risks internal liability. While the company's governing body may, under certain circumstances, invoke the business judgment rule, this rule does not apply to violations of law, but only to discretionary business decisions within legal limits.

Practical tip: Actively manage liability risks

The use of AI in business remains challenging from a liability perspective. A clear legal framework for liability is still lacking. Companies should therefore create their own structures to minimize risks. This includes, in particular, internal AI guidelines, clear responsibilities, employee training, and ongoing review of the systems used.

Anyone using AI should master it not only technically, but also legally. Because ultimately, it is not the AI that is liable, but the person who uses or is responsible for it.

FAQs – Frequently Asked Questions Liability in the context of artificial intelligence in the employment relationship

Who is liable if artificial intelligence causes damage in a company?
Can companies exempt themselves from AI liability through a disclaimer?
Is the employer also liable for errors made by employees when using AI?
When are employees liable for damages caused by AI?
Who bears the burden of proof in cases of employee breaches of duty?
What role does the AI regulation play in liability?
Are AI manufacturers liable for damages caused by faulty systems?
What happens if employees misuse AI or accept results without checking them?
Can managing directors or board members be held personally liable?
How can companies reduce liability risks when using AI?


Legally compliant for the 2026 works council elections – with legal support in labor law

Raphael Lugowski,
If you have any questions about this topic, please contact me by phone at 040 524 717 830 or by email to lugowski@smart-arbeitsrecht.de

Organizing a works council election requires careful preparation – ideally well in advance of the actual election date. The legal regulations of the Works Constitution Act (BetrVG) and the Election Regulations (WO) are extensive and often difficult to understand. For the election committee, this means that all requirements must be strictly adhered to. Even the smallest procedural errors can lead to the election being challenged or even declared invalid.

A clearly structured process and a solid legal foundation are therefore essential for conducting the election properly. Our specialized employment lawyers will support you from the very beginning – from planning and preparation to the legally compliant execution of the election. This way, you reduce liability risks and ensure that all formal requirements are met.

We have compiled a concise and easy-to-understand overview of the individual steps involved in the regular election process. Rely on our expertise in labor law – to ensure your 2026 works council election runs smoothly and legally.


What awaits you:

  1. Initiating a works council election – legally compliant with legal support in labor law
  2. Election notice for the works council election – this information is mandatory
  3. Submitting nominations – deadlines, requirements and legally compliant procedure
  4. Announcement of candidates – inform in a timely and legally compliant manner
  5. Conducting the works council election – legally compliant and well-organized
  6. Vote counting and announcement of the election result – transparent and comprehensible
  7. Inaugural meeting – handover of responsibility to the new works council

Initiating a works council election – legally compliant with legal support in labor law

The official start of a works council election is marked by the issuance of the election notice by the election committee. This document marks the beginning of the formal election process and must contain all legally required information. The workforce is then officially informed of the upcoming election through public posting within the company.

Before the election notice can be published, an important intermediate step is required: Together with the representatives of the senior management, it must be determined which employees actually belong to the group of senior management as defined in Section 18a of the Works Constitution Act (BetrVG). Only employees who not Those belonging to this group are eligible to participate in the election or to be elected themselves. The electoral register is then compiled based on this determination.

For this legal review and allocation, you should allow at least two weeks, as stipulated by law. Following this, the electoral roll, which includes all eligible and eligible employees, will be compiled. This roll, along with the election notice, must be posted in the workplace to ensure transparency and verifiability.

Our experienced employment lawyers support election committees in every phase of the works council election – from initiation to vote counting. This ensures that all steps are legally compliant. Request legally sound support for your works council election now!

Election notice for the works council election – this information is mandatory

The election notice is the core element of every works council election and establishes the legal framework for a proper election procedure. Section 3 of the election regulations precisely defines the minimum content. The election committee is obligated to record all required information completely and accurately; otherwise, the election can be challenged or even declared invalid.

The most important mandatory information in the election notice includes:

  • The number of works council members to be elected
  • The guidelines for election proposals and candidate lists
  • The specification of the gender quota (minority gender) and all relevant deadlines.
  • Election day, including the date of voting
  • Place, date and time of the public vote count
  • Information on the possibility of voting by mail

Only if all legally required information is correctly stated is the election notice valid – and the works council election legally secure.

Submitting nominations – deadlines, requirements and legally compliant procedure

The legally stipulated deadlines begin to run with the publication of the election notice. Within two weeks Employees can object to the electoral roll – and within the same period, the Election proposals must be submitted to the election committee.

No list submitted? Note the deadline!
If no valid nomination has been received after this two-week period, the election committee is obliged to... one-week grace period to grant. If no valid proposal is submitted even within this grace period, the works council election is considered to have failed – a special case that rarely occurs in practice.

Examination of nominations by the electoral board
After the submission deadline, the election committee carefully reviews all submitted nominations for formal and substantive validity. If any deficiencies are found, the respective list leader must be informed immediately. As long as the deadline is still open, incorrect nominations can be corrected or resubmitted to ensure validity.

Order on the ballot – the decision is made by drawing lots
After the submission deadline, the election committee invites the list leaders to determine the order of candidates on the ballot. If there are multiple valid lists, the order is determined by... by drawing lots determined. However, if there is only one valid nomination, this step is omitted – in this case, a Majority voting instead, where the votes are directly allocated to the candidates on that list.

Adherence to deadlines and formal requirements is crucial for the validity of the works council election. Our experienced employment lawyers support election committees in ensuring legally sound review and execution. Have your election documents reviewed now – for a legally valid election!

Announcement of candidates – inform in a timely and legally compliant manner

The valid nominations or candidate lists must be publicly announced within the company no later than one week before election day. This obligation is enshrined in law and serves the purpose of transparency – all employees should be informed in a timely manner which candidates are standing for election.

Especially in larger companies – particularly if postal voting is planned – it is advisable to announce the election results early. This is because the postal voting documents may only be sent out once the official nominations have been properly published within the company.

If the announcement is made late, this can delay the dispatch of postal voting documents – and in the worst case, lead to a challenge of the works council election. Correct and timely publication is therefore essential to ensure the smooth running of the election.

Conducting the works council election – legally compliant and well-organized

To ensure that election day runs smoothly and legally, the election must be properly prepared and designed to prevent manipulation. The election committee is responsible for complying with all organizational and legal requirements.

Key points include:

  • Setting up a suitable polling station or several polling stations, if necessary
  • Provision of a sealed and tamper-proof ballot box
  • Verification of eligibility to vote based on the current voter list
  • Organization of election materials and providing resources for barrier-free voting

Careful planning and clear responsibilities help to make the election process transparent, legally sound and comprehensible for all employees.

Vote counting and announcement of the election result – transparent and comprehensible

Immediately after the polling stations close, the public vote count is carried out by the election committee. Transparency is paramount – all persons present must be able to understand the counting process.

The preliminary election results will then be announced and carefully documented. This includes the preparation of an election record, in which all relevant data and findings are recorded. This record will be signed by the entire election committee and will form the basis for the subsequent announcement of the final election results.

Proper documentation protects against ambiguities and is crucial to ensuring the legality of the works council election.

Inaugural meeting – handover of responsibility to the new works council

Once the final election result is determined, the final phase of the election process begins. It is now the responsibility of the election committee to properly prepare the handover to the newly elected body.

  • Notify the selected employees immediately after their election.
  • Publish the names of the elected members operational.
  • Download no later than one week after election day. to the inaugural meeting of the new works council.
  • Hand over all election documents to the new committee – with this handover, the work of the election committee officially ends.

A clearly structured closing ensures a smooth transition and guarantees compliance with all legal requirements.

Especially in the final stages, formal errors can easily occur. Our experienced employment lawyers ensure that your works council election is completed correctly and on time. Request legally sound support until the handover now!






Part-time job at a pizza delivery service: No entitlement to late payment if the permitted working hours are exceeded.

Raphael Lugowski,
If you have any questions about this topic, please contact me by phone at 040 524 717 830 or by email to lugowski@smart-arbeitsrecht.de

Many people with mini-jobs mistakenly assume that a 20-hour week automatically applies without an explicit agreement.

An employee who already held a full-time job with 38 hours per week demanded payment for hours not worked in his secondary job. The Berlin-Brandenburg Regional Labor Court (LAG) rejected this claim: The statutory maximum working time of 48 hours per week is the upper limit. Therefore, there is no entitlement to further back pay.


What awaits you:

  1. Late payment demanded: Dispute over unused working time in a mini-job
  2. Ruling on mini-jobs: No back payment for exceeding maximum working hours
  3. Important ruling: Risks for employers when working time regulations are lacking in mini-jobs
  4. Employers have a responsibility: Minijobs without clearly defined working hours pose legal risks.
  5. Lesson from the mini-job ruling: Why clear working time regulations are indispensable
  6. Proactive measures: Clear employment contracts protect against the risk of late payment penalties.

Late payment demanded: Dispute over unused working time in a mini-job

A part-time worker, who worked as a pizza delivery driver alongside his 38-hour main job, demanded back pay for hours not worked. His contract did not stipulate a fixed weekly working time, but rather employment on an as-needed basis. The plaintiff invoked Section 12 Paragraph 1 Sentence 3 of the Part-Time and Fixed-Term Employment Act (TzBfG), according to which, in the absence of an agreement, a regular weekly working time of 20 hours is deemed to be agreed upon. Since he was actually deployed less frequently, he claimed back pay for a total of 316.6 unused hours.

Ruling on mini-jobs: No back payment for exceeding maximum working hours

The Berlin-Brandenburg Regional Labour Court (LAG) ruled that the minijobber is not entitled to back pay, as he was already fully occupied by the legally stipulated maximum working time of 48 hours per week (§ 3 ArbZG).

At the same time, the ruling makes it clear: If there is no clear contractual agreement on working hours, a weekly working time of 20 hours can be considered tacitly agreed in the event of a dispute, according to Section 12 of the Part-Time and Fixed-Term Employment Act (TzBfG) – with potential consequences for employers.

Important ruling: Risks for employers when working time regulations are lacking in mini-jobs

The ruling by the Berlin-Brandenburg Regional Labor Court highlights the risks for employers who employ part-time workers without clearly defined contractual working hours. If no working hours are agreed upon, there is a risk – especially after the termination of the employment relationship – of claims for back pay for allegedly unused hours.

Especially in industries with a high demand for flexible workers, such as catering or retail, such additional demands can pose financial risks – in extreme cases even threatening the existence of the business.

Employers have a responsibility: Minijobs without clearly defined working hours pose legal risks.

Many part-time workers are on call – often without a written agreement on their weekly working hours. A recent ruling by the Berlin-Brandenburg Regional Labor Court (LAG) demonstrates how risky this can be for employers: Without a clear contractual agreement, part-time workers can retroactively claim back pay for unused hours after termination of employment – for the entire duration of the employment relationship.

Especially in companies with call-off contracts, this can lead to substantial back payments, which in the worst case can jeopardize their economic existence.

Lesson from the mini-job ruling: Why clear working time regulations are indispensable

The ruling by the Berlin-Brandenburg Regional Labor Court makes it clear: Without clear contractual agreements regarding working hours, employers risk costly repayment claims – especially in the area of mini-jobs. Sectors such as the hospitality industry and retail, which rely on flexible working time models, are particularly affected.

A written agreement on weekly working hours effectively protects against subsequent claims and legal disputes.

The Federal Labour Court (BAG, 10.08.2022 – 5 AZR 154/22) had already clarified: If clear guidelines are lacking or instructions from the employer are unreasonable, this can lead to default of acceptance and claims for payment.

Companies should therefore urgently review their contract templates and adapt them if necessary to avoid legal pitfalls.

Proactive measures: Clear employment contracts protect against the risk of late payment penalties.

Employers should take action now: Clear and written working time regulations in mini-job contracts are essential to avoid legal pitfalls. Existing contracts should be reviewed and vague wording specifically revised.

The recent ruling by the Berlin-Brandenburg Regional Labor Court clearly demonstrates how quickly costly claims for late payment wages can arise from a lack of regulations.

Tip: Clearly define the weekly working hours in the contract – this creates legal certainty and protects against retroactive claims.

As an experienced law firm specializing in employment law, we support you in consistently minimizing legal risks associated with mini-jobs. We review your existing contracts, formulate legally sound working time regulations, and help you effectively prevent claims for back wages.

Trust in our expertise – for clear conditions and legally secure working relationships.
Would you like to design your stock option program professionally and legally? Our employment law firm will support you from planning to implementation – please contact us personally!






Stock option programs in employment law: Opportunities, obligations, and legal risks explained simply

Raphael Lugowski,
If you have any questions about this topic, please contact me by phone at 040 524 717 830 or by email to lugowski@smart-arbeitsrecht.de

Stock option programs are a proven way to retain employees long-term and increase their motivation – especially in growth-oriented and innovative companies. However, anyone offering or accepting stock options as part of an employment relationship should thoroughly understand the applicable labor and tax law requirements.

In a globally connected world of work, more and more employers are turning to flexible compensation models to attract and retain qualified specialists. Stock option programs, in particular, have established themselves as an effective tool. But how exactly do these programs work? What rights and obligations do they entail for employees and employers? And what legal pitfalls should be avoided?

This article examines the most important employment law aspects of stock options – in an understandable, practical manner, and with the perspective of legal experience.


What awaits you:

  1. What is a stock option program? – Meaning and its assessment under labor law
  2. The advantages of a stock option program – opportunities for companies and employees at a glance
  3. Legal basis for stock option programs in Germany
  4. Rights and obligations of employees under stock option programs
  5. The process of a stock option program – legally explained in five phases
  6. Practical example: How a stock option program works in a company
  7. Checklist: 5 steps to a legally compliant stock option program

What is a stock option program? – Meaning and its assessment under labor law

A stock option plan is a compensation-based participation model in which employees are contractually guaranteed the right to purchase company shares at a predetermined price at a later date. This model is particularly popular in startups and technology-driven companies because it binds qualified employees to the company for the long term without causing immediate liquidity strains.

However, such programs raise numerous employment law issues – for example, regarding the specific design of the option contracts, the tax treatment upon acquisition, or the legal situation in the event of termination.

Would you like to introduce a stock option program or have existing agreements legally reviewed? Our employment law firm provides competent and practical support – book your free initial consultation now!

The advantages of a stock option program – opportunities for companies and employees at a glance

A carefully designed stock option program can bring significant benefits to both employer and employee. Properly implemented, it serves not only as an effective tool for employee retention but also as a strategic tool for recruiting talent:

Motivation and long-term commitment
Stock options provide employees with a direct financial incentive to contribute to the company's success. Employees who benefit from a rising share price identify more strongly with the company and tend to remain loyal for a longer period of time.

Financial flexibility for the company
Since stock options don't require immediate salary payments, they ease the company's liquidity burden. Especially during growth phases, this model offers financial flexibility to invest capital specifically in expansion and innovation.

Competitive advantage in recruiting skilled workers
In highly competitive labor markets – such as the IT or startup industries – employee participation programs can be a decisive factor in the recruiting process. They signal appreciation and enable employees to share in the company's success.

Possible tax advantages
In many countries, stock option programs are tax-advantaged – for both employers and employees. However, proper contractual and legal structuring is crucial to maximize the tax benefits.

Would you like to structure a stock option program in a legally compliant and tax-efficient manner? Our employment law firm will support you from planning to implementation – schedule a consultation now!

Legal basis for stock option programs in Germany

The introduction of stock option programs in Germany is complex and requires compliance with numerous labor, tax, and commercial law regulations. It is therefore crucial for companies to be familiar with the legal framework early on and implement it correctly – especially with regard to compliance, employee rights, and tax obligations.

Stock Corporation Act (AktG)
The Stock Corporation Act contains binding regulations on the issue of stock options in stock corporations.
A key point is the necessary approval of the Annual General Meeting before stock options may be issued to employees. Furthermore, there are transparency and disclosure requirements to ensure comprehensive information for shareholders and the capital markets.

Tax regulations
The tax treatment of stock options can be challenging for both employers and employees.
Depending on the arrangement, income tax and social security contributions may be incurred upon granting or exercising the option – especially if the option is considered a non-cash benefit. The distinction between remuneration and additional benefits plays a key role in tax matters.

Accounting according to HGB and IFRS
Proper accounting of stock options is required both under the German Commercial Code (HGB) and, where applicable, under International Financial Reporting Standards (IFRS).
The correct valuation and presentation in the annual financial statements not only influences the tax situation, but can also have relevance under capital market law – close coordination with experts is therefore essential.

Would you like to design and implement a stock option program in a legally compliant manner? Our employment law firm provides comprehensive support with the implementation of employment law, tax, and accounting requirements – request a free initial consultation now!

Rights and obligations of employees under stock option programs

Participation in a stock option program offers employees attractive financial prospects, but also involves clearly defined rights and obligations. A legally sound arrangement therefore always requires precise contractual provisions and transparent communication.

Right of acquisition (purchase option)
Participating employees receive the contractually guaranteed right to purchase company shares at a predetermined price at a specified time. This option is usually tied to specific conditions or performance targets, as well as a time limit.

Vesting periods and holding periods
Many programs have vesting periods: employees may only exercise their options after a certain length of service. This provision strengthens long-term commitment to the company and plays an important role under labor law, particularly in the event of termination or dismissal of an employment relationship.

Regulations in the event of termination or cancellation
In the event of termination, the question often arises as to what happens to any unexercised options. These often expire in the event of voluntary resignation or dismissal without notice. Therefore, a clear contractual agreement is crucial to avoid future conflicts.

Employees' information obligations
Employees are generally required to inform the company of the exercise of their option within certain deadlines. Failure to meet this deadline may result in the option being forfeited – a point often overlooked in practice. We have years of experience in works council elections. Have your candidates screened now – get a legally secure start to the 2026 works council elections.

Are you an employer looking to create legally compliant stock option programs, or are you an employee looking to have your rights reviewed? Our employment law firm offers personalized, expert advice—scheduling an initial consultation now!

The process of a stock option program – legally explained in five phases

Implementing a stock option program requires a structured approach and careful legal planning. Only if all phases are implemented smoothly and accompanied by legal advice can labor, tax, and commercial law risks be avoided. Below is an overview of the typical five steps:

Phase 1: Planning and approval
The legal and organizational conception of the program begins.
Among other things, the number of options, the exercise price and the conditions of participation are determined here.
For stock corporations, the approval of the general meeting is also mandatory according to Section 192 AktG.

Phase 2: Allocation of options
After approval, the options are awarded to selected employees.
The allocation can be either immediate or linked to certain conditions – such as the achievement of project goals or a certain length of service.

Phase 3: Vesting period
During this phase, it is determined how long an employee must work for the company before he or she can actually exercise the options.
Typically, this period is between two and four years. The vesting period is a key element for long-term employee retention.

Phase 4: Exercise of options
After the vesting period has expired, participants can exercise their options, i.e. purchase shares at the previously determined price.
Since this creates taxable monetary benefits, wage tax and social security law aspects must also be taken into account during this phase.

Phase 5: Selling the shares
After the purchase, employees are free to sell the shares at a time of their choosing.
The resulting profit is subject to capital gains tax in Germany; further tax consequences depend on the individual case.

Would you like to implement a stock option program in a legally compliant manner or have existing structures reviewed? Our employment law firm will support you through every phase – request a free initial consultation now!

Practical example: How a stock option program works in a company

To illustrate the significance and functioning of a stock option program under employment law, let us consider an example from corporate practice:

The company “GreenVision Solutions”
GreenVision Solutions GmbH, a growth-oriented company in the field of renewable energies, seeks to retain qualified project managers and developers for the long term.
For this purpose, the Management decides to introduce a stock option program for selected key employees.

Initial situation
Under the participation model, a total of 2,000 stock options will be issued at an exercise price of EUR 40 per share.
Eight employees from the technical and management departments will each receive 250 options.
The vesting period is three years before the options may be fully exercised.

Allocation and vesting structure
The allocation will be staggered over three years:

  • After the first year: 33 % (83 options per person)
  • After the second year: another 33 %
  • After the third year: the remaining 34 %

Employees may only exercise the vested portion provided they continue to be employed by the company on the respective reporting date.

Exercise and taxable profit
Three years later, GreenVision Solutions shares are trading at 90 euros.
A project manager decides to exercise all 250 options.
He purchases the shares at the exercise price of 40 euros and then sells them at the market price of 90 euros.

Result:
Earnings per share: 50 euros
Total profit: 12,500 euros (before taxes)

This amount is subject to capital gains tax; in addition, income tax may be payable on the monetary benefit at the time of exercise.

Are you planning a participation model or would you like to have an existing program legally reviewed? Our employment law firm offers personalized, practical advice—arrange a free, no-obligation initial consultation now!

Checklist: 5 steps to a legally compliant stock option program

A carefully planned stock option program can be a powerful tool for motivating and retaining employees long-term. To ensure its successful implementation in a legally compliant, tax-compliant, and organizationally efficient manner, companies should consider the following steps:

1. Define goals and target groups
First, consider what goals you want to achieve with the stock option program:
Is it primarily about employee retention, performance incentives or the recruitment of new skilled workers?
Also determine which employee groups should be included in the program.

2. Obtain legal and tax advice
Before implementation, a comprehensive legal review by experienced labor lawyers is recommended. This should focus in particular on:

  • legally secure contract drafting,
  • the tax classification (e.g. monetary benefit, income tax liability),
  • and employment law protection in the event of dismissals or departure of employees.

3. Obtain approval from the general meeting
For stock corporations, the approval of the general meeting is mandatory according to Section 192 of the German Stock Corporation Act (AktG).
The stock option plan must be formally approved, documented and properly announced.

4. Clear communication with employees
A successful stock option program thrives on transparency. Inform your employees about:

  • Vesting rules and terms,
  • Deadlines for exercising options,
  • as well as tax and labor law implications.

5. Implementation and ongoing management
Use digital solutions to manage the program, such as tracking allocations, deadlines, and exercises.
This ensures transparency and avoids errors during ongoing operations.

Would you like to design your stock option program professionally and legally? Our employment law firm will support you from planning to implementation – please contact us personally!






Active and passive voting rights in the 2026 works council elections – who should be on the electoral roll?

Raphael Lugowski,
If you have any questions about this topic, please contact me by phone at 040 524 717 830 or by email to lugowski@smart-arbeitsrecht.de

The next works council elections will take place nationwide in spring 2026. However, before employees can cast their votes, the electoral board must compile the correct electoral roll. This raises the key question: Who is eligible to vote (active voting right) – and who is allowed to stand for election (passive voting right)?

A legally compliant election can only be guaranteed if the electoral roll is compiled in accordance with the law. Errors in the roll can lead to challenges and subsequently invalidate the election. As an electoral board, you bear a special responsibility in this regard.

In this article, we explain who is eligible to vote and stand for election, which legal criteria must be met, and what you as an election committee should pay attention to when compiling the electoral roll for the 2026 works council election.


What awaits you:

  1. Online Works Council Election 2026: The current status – what has happened so far
  2. New federal government – new opportunities for online works council elections?
  3. Conclusion: No law yet – but digital co-determination is gaining momentum
  4. The passive right to vote – who is eligible to stand for election to the works council?
  5. Special case in the works council election: Who counts as a senior employee?
  6. Conclusion: Clarifying the status before the works council election – for greater legal certainty
  7. FAQs – Frequently Asked Questions

Of central importance: The electoral roll for the works council election

The voters' list is a crucial document in every works council election. It informs who is eligible to vote (active voting right) and who is eligible to stand as a candidate (passive voting right). As the election committee, you are obligated to publish a complete and accurate voters' list in the company along with the election announcement.

The electoral roll contains all eligible employees in the company. Only those on this roll may participate in the election. At the same time, all employees have the right to check whether their registration has been correct. Therefore, the electoral roll must be displayed for inspection in an accessible location in the company until voting is complete.

According to Section 2, Paragraph 2 of the Election Regulations (WO), the employer is legally obligated to provide the election committee with all necessary information and documents to correctly compile the electoral roll. As the election committee, you should specifically request the employer to provide you with the necessary information – ideally in writing and with specific details.

Errors in the electoral roll are one of the most common causes of challenges to works council elections. Our labor law experts will review your documents and guide you through every step – ensuring a legally compliant and contestable election. Request a free consultation now – so your electoral roll is legally sound!

Mistakes on the voter list? You can appeal!

The electoral roll forms the basis for the works council election, so its accuracy and timeliness are crucial. But what happens if an error is discovered?

Every employee has the right to lodge an objection to the electoral roll with the electoral board within two weeks of the election announcement being issued. If the objection is deemed justified, the roll must be corrected or supplemented accordingly.

After the two-week deadline has expired, no further changes are possible on the basis of objections – the electoral board must reject late objections.

Between the time the voter list is drawn up and election day, personnel changes may occur within the company—for example, through hiring, terminations, or transfers. Therefore, the electoral board is obligated to continuously update the list to ensure that all eligible voters are correctly recorded—and no one is unfairly excluded.

An incorrect or outdated voter list can jeopardize the entire works council election. Have your voter list legally reviewed by our employment law firm – and protect yourself against legal challenges. Request legal support now – we will reliably guide you through the entire election process.

The active right to vote in works council elections – who is allowed to vote?

A key question arises in the context of the 2026 works council elections: Who is eligible to vote? The so-called active right to vote regulates who is entitled to cast their vote in the election. The legal basis for this can be found in Section 7, Sentence 1 of the Works Constitution Act (BetrVG). Accordingly, only persons who meet all three requirements are entitled to vote:

  • Employee status
    All persons who are considered employees within the meaning of the law are entitled to vote – regardless of whether they are employed full-time, part-time, on a temporary basis, on a marginal basis or at home. 
    • Employees eligible to vote include:
      • Apprentices, provided they are at least 16 years old
      • Mini-jobbers
      • Part-time and temporary workers
      • Employees on parental leave, sick leave or vacation
      • Employees in active partial retirement
      • Working students and volunteers
      • Field service and teleworkers
      • Temporary workers, provided they are employed in the company for more than three months
      • ABM workers (since BAG decision 2004, 7 ABR 6/04)
      • Public service employees assigned to the company
    • However, the following are not eligible to vote:
      • Executive employees (Section 5 (3) BetrVG)
      • Employers, managing directors, board members
      • Self-employed and freelancers
      • 1-euro jobbers
      • Employees under 16 years of age
      • Employees in the passive phase of partial retirement
  • Length of service
    • Only those who belong to the specific company are entitled to vote – not all employees of the company or group.
    • Dependent business units participate in the election of the main business.
    • Independent company divisions can elect their own works council under certain conditions.
    • The distinction is often complex – we would be happy to advise you on this as part of our employment law election support.
  • Minimum age
    • Any employee who is at least 16 years old on election day may vote. 
    • The decisive factor is the day of voting, not the start of the election process. In elections lasting several days, the last day of voting counts.

Eligible voters must be carefully verified and documented. An inaccurate voter list can lead to a challenge to the election. Our employment law firm supports election boards in compiling legally compliant voter lists – nationwide and with decades of experience in employment law. Have your voter list reviewed now – for a legally compliant and uncontestable 2026 works council election!

The passive right to vote – who is eligible to stand for election to the works council?

Not everyone eligible to vote can also run for the works council. The so-called passive right to vote is regulated in Section 8 of the Works Constitution Act (BetrVG) and determines who is considered an eligible employee in the 2026 works council election.

  • Eligible to vote are those who:
    • is eligible to vote (see Section 7 of the Works Constitution Act),
    • has reached the age of 18 and
    • has been part of the company for at least six months without interruption.
  • Crucial moment: election day
    • The six-month period is determined by the day of voting. For elections lasting several days, the last day of voting applies. 
    • If an employee was previously employed in another company within the same company or group, these periods will be taken into account.
    • Note: Periods of service before the age of 18 also count. For example, anyone who turns 18 on election day and has already been working for the company for a year is eligible to run.
  • Who is eligible to vote?
    In addition to traditional employees, these include:
    • Trainees, provided they work in a “real” company
    • Part-time workers
    • Homeworkers if they work predominantly for the company
    • Employees on maternity or parental leave
  • Who is excluded from the right to vote?
    • Temporary workers are generally not eligible to vote – neither so-called real nor fake ones. 
    • The Federal Labor Court (BAG, 13.10.2004 – 7 ABR 6/04) made this clear. 
    • Even if temporary agency workers are allowed to vote, they cannot be elected to the works council of the hiring company.

Correctly verifying the right to stand for election is crucial for a non-contestable election. Our employment law firm reliably reviews your candidate lists nationwide and with years of experience in works council elections. Have your candidates reviewed now – get a legally secure start to the 2026 works council elections.

Special case in the works council election: Who counts as a senior employee?

When compiling the electoral roll for the 2026 works council elections, the correct classification of executive employees presents a particular challenge. While Section 5, Paragraphs 3 and 4 of the Works Constitution Act (BetrVG) provides legal criteria, there is no clear definition. In practice, the electoral board must carefully examine whether a person qualifies as a executive employee—because this group of employees is neither eligible to vote nor to be elected.

  • What distinguishes senior managers?
    Senior managers assume entrepreneurial-like tasks within the company with their own decision-making power – for example, by:
    • Hiring and firing of employees
    • Granting or use of power of attorney
    • Responsibility for key personnel or budget decisions
    • Due to their special status, they are closer to the employer than to the rest of the workforce. Therefore, they are excluded from works council elections.
  • Impact on the electoral roll and eligibility to vote
    Senior managers will:
    • not registered on the electoral roll,
    • not taken into account when calculating the size of the works council (Section 9 of the Works Constitution Act) and
    • not counted in the number of works council members to be released (Section 38 of the Works Constitution Act).
    • Please note: The election is not automatically invalidated if a senior employee votes by mistake – a challenge can only be successful if there is evidence of influence on the election result.
  • Alternative representation of interests: the Speakers’ Committee
    • Senior employees are not without rights – they elect their own representative body, the Speakers’ Committee. 
    • This is usually elected at the same time as the works council election. 
    • To avoid overlaps, close coordination between the electoral boards of both bodies is necessary. 
    • In case of doubt, who belongs to the group of senior employees must be clarified jointly – on the basis of Section 18a of the Works Constitution Act.

The incorrect assignment of senior employees can make the election contestable. Our employment law firm supports you in legally compliant demarcation – with clear review criteria, legal classification, and practical experience. Have your voter list reviewed now – and legally clarify any uncertainties regarding senior employees!

Conclusion: Clarifying the status before the works council election – for greater legal certainty

In cases of doubt, it may be extremely sensible for reasons of legal certainty to have the status of individual employees determined by the labor court before the works council election – especially if the allocation procedure pursuant to Section 18a of the Works Constitution Act (BetrVG) is not effective or does not lead to a clear result.

A judicial determination of status, for example on the question of whether an employee is to be classified as a managerial employee within the meaning of works constitution law, provides binding clarity – and prevents later challenges or costly disputes that can burden not only the election but also other operational processes.

Clarify any doubts early on – we'll assist you with legally compliant status checks and, if necessary, represent you in labor court proceedings. Contact us now – for legally compliant works council elections without any surprises.

FAQs – Frequently asked questions about active and passive voting rights in company elections

Why is the electoral list so legally significant for the works council election?
Who is eligible to vote in the 2026 works council election?
What conditions must be met for passive voting rights?
What role does the election committee play in the election process?
What role do data protection and information obligations play in the electoral register?
Can errors in the voter list be corrected?
What significance does employee status have for the right to vote?
What rules apply to public sector employees?
Why is a continuous update of the voter list necessary?
When is external support useful in works council elections?


Online works council elections from 2026? – What is currently legally possible

Raphael Lugowski,
If you have any questions about this topic, please contact me by phone at 040 524 717 830 or by email to lugowski@smart-arbeitsrecht.de

Digital elections offer greater convenience, lower costs, and higher participation—a concept that is attracting considerable interest in an increasingly digitalized workplace. This raises the question: Will employees be allowed to elect their works council online in the future?

While electronic voting has long been a reality in many other areas, works council elections remain subject to strict legal requirements. Currently, digital voting is not yet legally permitted – unless the legislature creates the necessary legal framework by 2026.


What awaits you:

  1. Online Works Council Election 2026: The current status – what has happened so far
  2. New federal government – new opportunities for online works council elections?
  3. Conclusion: No law yet – but digital co-determination is gaining momentum

Online Works Council Election 2026: The current status – what has happened so far

The draft bill presented by the traffic light coalition in November 2024 to introduce online works council elections as part of a pilot project was not pursued further after the early end of the legislative period. This is due to the so-called discontinuity principle: All legislative initiatives that are not adopted by the end of the legislative period automatically lose their validity and must be reintroduced by a new federal government.

New federal government – new opportunities for online works council elections?

The coalition agreement between the CDU/CSU and SPD contains a clear commitment to the digitalization of employee participation in company processes—including the possibility of electing works councils online. It states:
"We will further develop co-determination. We will also enable online works council meetings and online staff assemblies as equivalent alternatives to in-person formats. In addition, the option to vote online will be enshrined in the Works Constitution Act."

This confirms that the political will is there. However, when and in what specific form online voting will be introduced in works council elections remains to be seen.

Conclusion: No law yet – but digital co-determination is gaining momentum

  • The introduction of online voting is set out as a goal in the coalition agreement, but has not yet been implemented by law.
  • An amendment to the Works Constitution Act would be necessary – a corresponding legislative procedure is still pending.
  • It remains to be seen whether the 2026 works council elections can be held digitally or whether implementation will be postponed to a later election period.

Companies and election boards should continue to plan for in-person and postal voting, but at the same time, closely monitor legal developments. We will inform you about new legal steps. Get legal advice now – and stay well prepared for the digital future of works council elections!