Time savings account: principle, implementation and benefits for the company

The time savings account (CET) is an essential tool for companies and employees who want to optimize working time management and leave flexibility. Discover the principle of the CET, its implementation within the company, and its benefits for all parties.

What is a time savings account?

Definition and beneficiaries

A time savings account (CET) is a time bank made available to employees to accumulate unused days off (RTT, paid leave, etc.) for later use or conversion into deferred compensation. The CET applies to all companies where a collective bargaining agreement can be concluded at the industry, group, company, or establishment level. Therefore, all categories of employees are eligible.

Thanks to this time-saving scheme, employees can postpone vacation time for a personal project (training, sabbatical, etc.) or supplement their salary by converting vacation time into pay. For employers, this allows for more effective workforce planning and skills management, particularly by anticipating absences and optimizing workload.

What the Labour Code stipulates

The labor code, as well as the social security code, govern the implementation and use of the CET (Time Savings Account). Legal obligations generally require the drafting of an agreement defining:

• The conditions of membership and the scope of application of the digital labor code relating to the CET
• The procedures for carrying over, capitalizing days, and payroll valuation
• The applicable social security system, including social security contributions and taxation
• The duration of use of the CET and the portability of rights in the event of a change in circumstances

The provisions of collective agreements vary depending on the professional sector or company agreement. Furthermore, the legal working time (35 hours) remains unchanged: it is rather a tool for flexibility and organization.

Is the CET mandatory?

Time savings accounts are not mandatory in companies. Their implementation requires a collective or industry-wide agreement, which sets out the conditions. It should be noted that the time savings account is also not mandatory for the employee. They are free to use it and allocate their rights to it as they wish.

Implementation within the company

Under what conditions can the CET be established?

The time savings account is established through a collective agreement, a company agreement, or even a sectoral agreement, via the union representatives. In companies with fewer than 200 employees, where there is no union representative, this negotiation can be conducted with the works council or, failing that, the employee representative(s).

What should the agreement establishing the CET stipulate?

To secure the legal framework for the time savings account, the collective agreement must notably define:

• The conditions and limits of time or money compensation at the employee's initiative, or of hours worked beyond the collective working time at the company's initiative,
• The procedures for managing the CET
• Terms of use and liquidation/transfer
• In some cases, an insurance or guarantee scheme for the rights acquired by employees in the event of employer default.

The social partners have a relatively high degree of autonomy in collective bargaining. They can therefore include other provisions in the agreement, such as a minimum length of service to be eligible for the CET (Time Savings Account).

Benefits for both the employee and the employer

The CET offers many advantages:

• For employees : the ability to accumulate days off and plan for early retirement, the option to cash in their accrued time off (RTT), or to convert unused vacation days into employee savings. Employees can thus manage their time, plan for extended absences (training, sabbatical leave), or supplement their salary.
• For the employer : reduce certain costs related to absenteeism, improve the organization of working time to anticipate peak activity periods, strengthen its employer brand and retain talent through flexibility, optimize early retirements.

In summary, this time savings scheme offers a balance between advantages and disadvantages: it allows more freedom for the employee, but requires rigorous management to avoid an excessively high remaining leave balance or a heavy financial burden for the employer.

What are the employer's obligations after the implementation of the CET?

The Time Savings Account (CET) requires sound administrative management by the employer, through compliance with rules generally established by industry-wide collective bargaining agreements or professional agreements. In the absence of such agreements, the employer is obligated to inform employees, particularly new hires, of the applicable regulations. They must provide their teams with an up-to-date copy of these regulations both in the workplace and on the intranet.

Management and use of the time savings account

Employee contributions to the CET (Time Savings Account)

In time:

• Unused paid leave days, beyond the 4th week (often after 20 or 24 working days of leave)
• Unused RTT days
• Days of rest accrued under a fixed-day agreement
• Rest periods resulting from overtime (taking into account statutory increases)

It is not possible to allocate rest days granted for health or safety reasons (daily rest, weekly rest, mandatory compensation for night work, etc.) to this account. However, employees can transfer some of their days (up to 10 days per year) from their CET (Time Savings Account) to certain savings plans (PER or PERCO), if permitted by the collective agreement or the employer.

In silver:

• Bonuses (13th month, profit-sharing, incentive bonuses, etc.)
• Overtime (paid at a higher rate)
• Portion of remuneration (raises, allowances) that the employee voluntarily wishes to allocate all or part of to the CET (Time Savings Account)

Employer-funded CET

In terms of time: Hours worked beyond the collective working time may, according to the collective agreement, be integrated into the CET with their possible overtime pay.

Through matching contributions: The employer can match the CET (in time or money) to encourage employees to deposit their days or sums into it, for example by doubling any hour deposited (100% matching contribution). This matching contribution must exclusively concern rights or sums that are not yet owed to the employee.

Paying for absences

The Time Savings Account (CET) allows for compensation for certain absences, as defined by the collective agreement. When an employee takes days off funded by the CET, they receive compensatory payments deducted from their accrued time off. Social security contributions are then applied to these amounts, in accordance with current regulations. This flexibility offers a tangible advantage: maintaining a stable salary even during extended absences, such as sabbaticals or training leave.

Supplement the salary

Other employees choose to monetize their vacation days to supplement their pay. The conversion of vacation days into pay can be done immediately or later. Monetization must be stipulated in the agreement. Otherwise, the employer can refuse it.

Note that while it is possible to deposit your fifth week of vacation into your CET (Time Savings Account), it is forbidden to request its cashing out. The only vacation days that can be released to supplement your pay are those exceeding the 30 legally mandated annual working days.

Build up savings

Finally, the CET can be used to build up employee savings, via a company savings plan (PEE) or a collective retirement savings plan (PERCO).

In the first case, the payments are treated as voluntary contributions and are therefore included in the 25% limit on annual contributions to the PEE. These amounts are subject to all social security contributions, as well as income tax.

In the second case, the payments are partially subject to Social Security contributions and benefit from tax exemption.

Specific cases

What happens in the event of receivership or liquidation of the company?

Rights accrued within a Time Savings Account (CET) are insured against the risk of non-payment (like wages) up to a limit of €94,200 per employee. Beyond this limit, the collective agreement or company agreement must provide for an insurance or financial guarantee scheme to cover the accrued rights. If no such scheme is in place, the employee receives compensation corresponding to the monetary value of these rights.

What happens if the employee's contract is terminated?

Upon termination of employment (resignation, dismissal, etc.), the employee can receive the remaining balance of their CET (Time Savings Account) in cash as compensation for accrued vacation time. They can also transfer the balance to another employer if a tacit agreement or collective bargaining agreement allows it. Alternatively, with their employer's agreement, they can request that the accrued rights, converted into monetary units, be deposited with the Caisse des Dépôts et Consignations (French Deposit and Consignment Office).

Taxation and social security contributions

The tax treatment of time savings accounts varies depending on the form of monetization. The amounts received are subject to social security contributions and income tax, except for certain exemptions provided for by collective agreements. It is crucial to carefully manage the financial structure to avoid increased taxation while benefiting from optimization (e.g., payment into an employee savings plan).

FAQ - Frequently Asked Questions

How to release the rights held at the Caisse des dépôts et consignations?

The release of deposited funds can be done in two ways:

• At the employee's request, by transferring all or part of the sums to another scheme, such as a company savings plan (PEE, PEI), a Perco or a retirement savings plan according to the conditions provided for by the collective agreement or the regulations of the savings plans.
• At the request of the employee or his beneficiaries, by direct payment, at any time, of all or part of the deposited sums.

What is the benefit of a time savings account?

The CET (Time Savings Account) allows employees to accumulate unused vacation days or overtime hours to finance personal projects, supplement their salary, or prepare for retirement. It's a flexible tool that offers employees greater freedom while enabling employers to optimize human resources management.

How often can I withdraw money from a savings account?

The frequency of withdrawals from a CET (Time Savings Account) depends on the provisions of the collective agreement. Some agreements allow occasional withdrawals for specific projects, while others impose more restrictive conditions. It is therefore essential to consult the framework defined by your company.

How do I close my CET?

To close a CET (Time Savings Account), you must request it from your employer or follow the procedures described in the collective agreement. The remaining balance can be cashed out, transferred to a new CET if you change employers, or placed in a retirement savings plan, depending on the available options.