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

The Time Savings Account (TSA) is an essential tool for companies and employees wishing to optimize management of working hours and flexibility of leave. Find out more about the principle of the CET, how it can be set up within the company, and its benefits for all parties.

What is the time savings account?

Definition and beneficiaries

The time savings account is a capital of time made available to employees to accumulate unused rest days (RTT, paid leave, etc.) for later use or conversion into deferred compensation. The CET applies to all companies for which a collective agreement has been signed at branch, group, company or establishment level. As a result, all categories of employees are eligible.

Thanks to this time-saving scheme, employees can carry over their leave for a personal project (training, sabbatical leave, etc.) or supplement their salary by converting leave into remuneration. On the employer's side, this enables more effective forward-looking management of jobs and skills, notably by anticipating absences and optimizing workloads.

What the Labour Code provides for

The French Labor Code and Social Security Code provide a framework for setting up and using the CET. Legal obligations generally require the drafting of an agreement defining :

• Membership conditions and scope of application of the digital labor code relating to the CET
• Terms and conditions for deferring, capitalizing and valuing days in payroll
• The applicable social security system, including social security contributions and taxation
• The duration of the CET and the portability of rights in the event of a change of situation

Contractual provisions vary according to the professional branch or company agreement. What's more, the legal 35-hour working week remains unchanged: it's more a tool for flexibility and organization.

Is the CET compulsory?

The time savings account is not compulsory for companies. Its introduction requires a collective or branch agreement, in which the conditions are laid down. Nor is it compulsory for employees. They are free to use it and allocate the rights they wish.

Setting up in the workplace

Under what conditions can the CET be set up?

The time savings account is set up by a collective agreement or a company agreement, or even a branch agreement, through the intermediary of union delegates. In the absence of a union delegate in companies with fewer than 200 employees, negotiations are possible with the works council or, failing that, the employee delegate(s).

What must the agreement establishing the CET include?

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

• Conditions and limits for employee-initiated contributions of time or money, or company-initiated contributions of hours worked in excess of the collective time limit,
• CET management procedures
• Conditions of use and liquidation/transfer
• In some cases, an insurance or guarantee scheme for rights acquired by employees in the event of employer default.

Social partners are relatively autonomous in collective bargaining. They can therefore include other provisions in the agreement, such as a minimum length of service to qualify for the CET.

Benefits for employee and employer

The CET offers many advantages:

• For the employee: capitalization of days and early retirement, the possibility of monetizing RTT or transforming unused rest days into employee savings. In this way, employees can organize their time, plan a long absence (training, sabbatical leave) or supplement their salary.
• For the employer: reduce certain costs linked to absenteeism, improve the organization of working hours to anticipate peaks in activity, strengthen the employer brand and retain talent through flexibility, optimize early retirement.

All in all, this time-saving scheme offers a balance between advantages and disadvantages: it gives the employee greater freedom, but requires rigorous management to avoid too high a remaining leave balance or a heavy financial burden for the employer.

What are the employer's obligations once the CET has been set up?

The CET requires good administrative management on the part of the employer, through compliance with rules generally laid down by industry or professional agreements. In the absence of such agreements, the employer is obliged to inform employees, particularly new ones, of the text in force. He must make available to his teams an up-to-date duplicate of this regulatory framework in the workplace and on the intranet.

Managing and using the time savings account

Employee contributions to the CET

Time :

• Days of paid leave not taken, beyond the 4th week (often after 20 or 24 working days of leave)
• Unused RTT days
• Rest days acquired as part of a daily package
• Hours of rest from overtime (including statutory increases)

It is not possible to place days of rest granted for health or safety reasons (daily rest, weekly rest, mandatory compensation for night work, etc.). In addition, employees can transfer part of their days (up to 10 days/year) from their CET to certain savings plans (PER or PERCO), if the collective agreement or the employer so permits.

In silver :

• Bonuses (13th month, profit-sharing, etc.)
• Overtime (with extra pay)
• Portion of remuneration (increases, allowances) of which the employee wishes to voluntarily allocate all or part to the CET

Employer contributions to the CET

In time: Hours worked in excess of the collective working week may, depending on the collective agreement, be credited to the CET, with any applicable supplements.

Via a matching contribution: The employer can top up the CET (in time or money) to encourage employees to invest their days or sums, for example by doubling any hours invested (100% top-up). This contribution must relate exclusively to rights or sums not yet due to the employee.

Paying for absences

The CET authorizes the payment of certain absences, defined by the collective agreement. When employees take rest days financed by the CET, they receive compensation deducted from their time capital. Social security contributions apply to these amounts, in accordance with current regulations. This flexibility brings a concrete advantage: maintaining a stable salary even during prolonged absences, such as sabbatical leave or training leave.

Top up your salary

Other employees choose to monetize their days to supplement their pay slip. The conversion of leave into remuneration can be carried out directly or on a deferred basis. Monetization must be provided for in the agreement. Failing this, the employer may refuse.

It should be noted that while it is possible to deposit your 5th week of leave in your CET, it is forbidden to ask for it to be monetized. The only CP days that can be released to top up remuneration are those in excess of the 30 statutory annual working days.

Building up savings

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

In the first case, the payments are treated as voluntary contributions and therefore count towards the 25% ceiling on annual contributions to the PEE. These sums are subject to all social security charges, as well as income tax.

In the second case, payments are partially subject to Social Security contributions and are tax-exempt.

Specific cases

What happens if the company goes into receivership or liquidation?

Rights acquired under a CET are insured against the risk of non-payment (like salaries) up to a limit of €94,200 per employee. Above this limit, the agreement must provide for insurance or a financial guarantee to cover the rights acquired. If this is not yet the case, the employee receives compensation corresponding to the monetary conversion of these rights.

What happens if the employee's contract is terminated?

When an employee's contract is terminated (resignation, redundancy, etc.), he or she can recover the balance of his or her CET in cash, in the form of a compensatory vacation allowance. They can also transfer the balance to another employer if a tacit agreement or convention so permits. Another possibility is to request, with the employer's agreement, that the rights acquired and converted into monetary units be deposited with the Caisse des Dépôts et Consignations.

Tax and social charges

The tax treatment of time savings accounts varies according to the form taken by the monetization. Amounts received are subject to social security contributions and income tax, with the exception of certain exemptions provided for in collective bargaining agreements. It is crucial to have a good grasp of the financial arrangements to avoid a tax burden, while taking advantage of tax optimization (e.g.: payment into an employee savings plan).

FAQ - Frequently asked questions

How do I unlock rights deposited with the Caisse des dépôts et consignations?

There are two ways of releasing consigned rights:

• 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, in accordance with the conditions laid down in the collective agreement or savings plan regulations.
• At the request of the employee or his/her beneficiaries, by direct payment, at any time, of all or part of the sums deposited.

What's the point of a time savings account?

The CET allows you to capitalize on unused vacation days or overtime to finance personal projects, top up your salary or anticipate retirement. It's a flexible tool that gives employees greater freedom, while enabling employers to optimize human resources management.

How often can I withdraw money from a savings account?

The frequency of CET withdrawals depends on the provisions of the collective agreement. Some agreements allow one-off 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, you need to submit a request to your employer, or follow the procedures described in the collective agreement. The remaining balance can be monetized, transferred to a new CET if you change employer, or placed in a retirement savings plan, depending on the options available.