Blog Q&A Four-day work week

This article provides answers to the most frequently asked questions on the four-day work week (here: reducing working hours by 20% with the same pay).

A pilot study is being conducted in Germany from 1 February 2024 until 31 July 2024 to test introducing a four-day work week where the working hours are reduced by 20% while the salary remains the same. Implementing a four-day week also has an impact on employment law issues, the most common of which are highlighted below:

Is it possible to simply introduce a four-day work week at any time?

Introducing a four-day work week basically falls under the employer's discretion. However, it cannot be done unilaterally if a works agreement or an applicable collective agreement provides otherwise. Employment contracts can also stipulate that the working hours are distributed in a manner that deviates from a four-day week. In this case, an amending agreement must be mutually agreed or a notice of termination pending a change of contract is required, however the latter is only justified if there are operational reasons, which is unlikely to be the case.

What needs to be taken into consideration when introducing a four-day work week?

There are several points to consider:

• Employment contracts: the individual employment contracts have to be adapted to the new scope of work if specific hours and working days are stipulated in the employment contracts. 
• Collective bargaining agreements: if applicable, the provisions of relevant collective bargaining agreements must be observed.
• Works agreements: company regulations may also contain provisions that have to be observed when a four-day work week is introduced.
• Equal treatment: it is important that all employees are treated equally and fairly. Employees may therefore only be excluded from participating in the four-day work week in exceptional cases where it is possible to objectively justify such unequal treatment.

Do employees have to agree to introducing a four-day work week?

Since the working hours are usually distributed over five working days in employment contracts, switching to a four-day week would constitute a significant change in the working conditions which always requires the employee's consent.

Can employees demand that a four-day work week be introduced?

No, employees cannot unilaterally enforce that a four-day work week be introduced. Working hours are usually a matter of negotiation between the employer and employee, or they are regulated in collective agreements.

Do codetermination rights of the works council have to be observed?

Yes, the codetermination rights of the works council have to be observed when a four-day work week is introduced. In this respect, section 87 (1) no. 2 German Works Constitution Act (BetrVG) (start and end of daily working hours and their distribution over the days of the week) and section 87 (1) no. 3 German Works Constitution Act (BetrVG) are particularly relevant in the event of a temporary reduction in normal working hours.

Do the provisions of the German Working Hours Act (ArbZG) have to be observed?

The German Working Hours Act (ArbZG) still has to be observed. Among other things, the maximum number of working hours and the breaks must be observed. However, it should not present a problem with this four-day week model, since the working hours are not being redistributed, they are being reduced.

What about mandatory overtime or mandatory extra hours?

Overtime must continue to be handled in compliance with the provisions of the German Working Hours Act (ArbZG) and any collective agreements. The employer also has to obtain the employee's consent, unless otherwise stipulated in the employment contract or in collective bargaining agreements.

How does this affect the leave entitlement or public holidays?

The leave entitlement should be adjusted in proportion to the reduced working week (decreased) so that all employees are effectively granted the same amount of annual leave. The average number of weekly working days over the entire calendar year is used to calculate the leave entitlement, since the leave entitlement is calculated in relation to the calendar year. The individual adjustment will depend on the respective provision in the employment contract or the collective bargaining agreement.

As a rule, there is no entitlement to an extra day off for public holidays that fall on a non-working day, unless collective agreements or works agreements provide for this.

How does the four-day work week affect agreed performance targets?

It will generally be necessary to adjust performance targets and the volume of work if working hours are reduced by 20%. It has to be fair and transparent so that employees are not overworked. It may be necessary to reassess work tasks and targets. Any agreements that are in place should be reviewed.

Does the four-day work week affect social benefits or the company pension?

Reducing working hours has an effect on social security contributions if it entails a reduction in gross pay. However, since the salary remains the same with this four-day model, the social security contributions do not change as long as the salary is above the marginal earnings threshold.

The effects on the company pension depend on the specific conditions of the pension commitment. However, since the salary remains the same there should not be a negative impact on the amount of the company pension.

Once a four-day week has been introduced, is it possible to switch back?

If a four-day work week was introduced in agreement with the employee, then the employee's consent is required to terminate the arrangement. Another possibility is to issue notice of termination pending a change of contract (for operational reasons). In light of the above, it is advisable to initially limit the four-day work week to a specific test period, such as six months. At the end of this period, the previous (original) working time is resumed unless the relevant parties (the employer, the works council and the employee) agree otherwise. It may also be advisable to provide for other options to terminate the arrangement, in addition to initially limiting the duration.

Careful planning and implementation required

Introducing a four-day work week requires careful planning. This includes establishing a procedure which makes it possible to review and evaluate the working time arrangement on a regular basis. This is important to ensure that it is possible to reach the objectives that the four-day work week is supposed to achieve, and/or ascertain whether any adjustments have to be made.

In any case, employers have to take the specific legal framework applicable to their situation into account, including compliance with the German Working Hours Act (ArbZG), and any collective bargaining agreements and works agreements, while respecting the employees' rights.