Summer is event season – and suddenly it’s unclear what counts as working time
A Friday afternoon barbecue, a climbing park at the weekend, a group canoe trip followed by dinner: Summer is peak season for company outings and corporate celebrations. As soon as the invitations go out, the questions start coming in: Does this count as working time? Do I have to attend? What happens if someone gets injured?
In our legal practice, we regularly see well-intentioned company events lead to unnecessary surprises – from wage claims and back pay disputes to conflicts with Germany’s statutory accident insurance institutions. The good news is that most of these issues can be avoided by following a few clear rules.
How do I know whether it’s working time or personal time?
Under Germany’s Working Hours Act (ArbZG), working time is defined as the period from the beginning to the end of work, excluding breaks. For company events, a simple rule of thumb applies:
- If the event takes place during regular working hours (for example, a company summer party on a Friday afternoon), it will generally be considered working time and must be paid in the usual way.
- If it takes place outside regular working hours (such as in the evening or on the weekend) and attendance is voluntary, it is considered personal time. In that case, employees are generally not entitled to pay, overtime compensation, or time off in lieu.
This issue becomes particularly relevant whenever a company event is scheduled during regular working hours or when you effectively “expect” employees to attend or even make attendance mandatory.
Do employees have to attend a company event?
As a general rule, no. Employees are not required to attend company events. No one can be forced to give up their personal time to attend a company celebration. Doing so would constitute an unlawful interference with an employee’s personal rights. Likewise, employers cannot impose penalties such as deducting a vacation day from employees who choose not to attend.
However, if the event takes place during regular working hours, a different rule applies: Employees who decide not to participate in the celebration are generally expected to continue performing their regular work during that time. They may leave work early only if the employer expressly permits them to do so.
Common pitfalls for employers and organizations
- Failing to treat an event during working hours as paid working time: If a company event is scheduled during regular working hours, the time generally must be paid, even if employees are “just celebrating.” Employers who overlook this risk wage claims, back pay obligations, and discrepancies in timekeeping records.
- Pressuring employees or penalizing non-attendees: Deducting vacation days, disadvantaging employees who do not participate, or requiring attendance outside regular working hours is generally not permissible under German employment law and can also harm workplace morale.
- Failing to provide work for employees who do not attend: If the event takes place during working hours and you cannot provide work for employees who choose not to participate (for example, because the business is closed) you generally remain obligated to pay their wages even though no work is performed.
- Gaps in statutory accident insurance coverage: Germany’s statutory accident insurance generally covers only official employer-sponsored staff events. According to the German Federal Social Court (BSG), this requires that the event be organized or endorsed by the employer or the responsible management, serve to strengthen workplace cohesion, and be open to all employees within the relevant organizational unit. Since a 2016 court decision, the company’s top executive no longer has to attend personally. Participation by the responsible team or department manager is sufficient. Importantly, insurance coverage ends when the official event concludes. Any private socializing afterward is no longer covered.
- When a long-standing practice becomes a legal entitlement: If a company outing or similar staff event is organized regularly over a period of years without expressly stating that participation is voluntary and that no future entitlement is created, employees may, in individual cases, acquire an implied contractual entitlement based on the employer’s established practice.
What employers should do now
- Review the timing of the event: Determine whether the event takes place during or outside regular working hours. This will affect both employee compensation and timekeeping.
- Clearly communicate that attendance is voluntary: State explicitly in the invitation that participation is voluntary. This also helps reduce the risk of creating an implied contractual entitlement through a consistent company practice.
- Plan for employees who do not attend: Decide in advance who will continue working, who will cover any essential operations, and how employees who choose not to participate will be accommodated.
- Ensure statutory accident insurance coverage: Invite all employees within the relevant organizational unit, involve the responsible manager (or another person formally authorized to act on the employer’s behalf), and define and document both the official program and the event’s official end time.
- Keep works council co-determination rights in mind: If your organization has a works council, its co-determination rights may apply when determining the scheduling of working hours.
- Consider tax implications and your budget: Employer benefits of up to EUR 110 per participant per event remain tax-free (for up to two company events per calendar year). Nonprofit organizations should also ensure that spending remains appropriate in order to comply with the requirements governing the proper use of charitable funds.
When it makes sense to seek legal advice on working time
Legal issues become more complex when attendance at company events is intended to be mandatory, when questions arise about compensation or overtime, when works agreements come into play, or when Germany’s statutory accident insurance institution denies coverage following an accident. Additional issues may also arise if temporary agency workers or contractors participate, or if nonprofit educational institutions and other nonprofit organizations need to ensure that their charitable funds are used in compliance with applicable legal requirements.
We advise employers, nonprofit organizations, and educational institutions on all aspects of German employment law. As specialist employment lawyers with particular experience advising nonprofit organizations, we assess your individual situation and develop practical, legally compliant solutions.
If you would like to find out whether your policies and procedures for company celebrations and staff outings are legally compliant, we would be happy to advise you.
