Time Savings Account (CET): What Is It For, and How Can You Make the Most of It?

The time-savings account is a program that many companies have implemented, though sometimes without fully realizing its potential. When well-structured, it becomes a valuable HR tool, offering flexibility to employees, simplifying the management of time off and overtime, and can be effectively integrated with retirement or employee savings plans.

But you still need to know how to manage it. Because a poorly configured or poorly communicated CET generates social liabilities that quietly accumulate.

In this article, Gerep takes a closer look at what the CET really offers, how to implement it, and how to turn it into a full-fledged HR tool.

What is a time-savings account (CET)?

The time-savings account was established by the law of July 25, 1994. The original idea was to allow employees to save unused days off so they could use them later, either as time off or as pay. Thirty years later, the CET has become much more than that.

Against a backdrop marked by pension reform, growing concerns about quality of life at work, and the expansion ofemployee savings plans, the CET has gradually evolved into a versatile tool. Today, it allows employees to accumulate time off, optimize their tax situation, and plan for retirement, while enabling companies to better manage their social security liabilities.

Its legal definition, set forth in Article L.3151-2 of the Labor Code, is as follows: The CET allows an employee to accumulate paid leave entitlements or to receive compensation, either immediately or at a later date, in exchange for unused periods of leave or rest, or for the amounts the employee has allocated to the CET. In practice, it serves as both a time bank and a cash reserve.

Who is eligible, and under what conditions?

The CET is not mandatory: no company is required to establish one. However, once a company does so, it cannot act unilaterally. The establishment of the CET and the terms of its operation must be provided for in a collective agreement concluded at the company or facility level, or, failing that, in an industry-wide agreement.

The content of these agreements freely determines the rules applicable to the CET (funding, use, conditions for transfer or compensation), in accordance with the legal framework. Since the so-called “Labor” ordinances of 2017, the role of the company-level agreement has been strengthened: in many areas, it may establish rules that differ from those set forth in the industry-wide agreement, except when the latter expressly takes precedence in accordance with the hierarchy of norms provided for in the Labor Code.

It is this agreement that sets the ground rules: which rights can be assigned, within what limits, for what purposes, and how the rights are transferred in the event of termination. The law establishes a minimum framework of public policy (rules from which even the agreement cannot deviate) but leaves the social partners a wide margin for negotiation. It is precisely this flexibility that makes the CET so valuable—and so complex.

Once the CET is in place, all employees are, in principle, eligible to benefit from it, regardless of the type of contract they have: permanent contracts, fixed-term contracts, apprentices, remote workers, etc. There is no seniority requirement mandated by law, although some company agreements do include one. Apprentices may also be included, depending on the provisions set forth in the agreement.

How do you contribute to a CET?

The collective bargaining agreement determines what an employee can contribute to the CET. Broadly speaking, there are two types of entitlements that can be used to fund a CET:

Time-Based Rights

An employee may transfer a portion of their annual paid leave to their CET, provided that these days exceed the fourth statutory week. Specifically, vacation days exceeding 24 working days may be saved. Employees may also transfer RTT days, compensatory rest days, additional vacation days provided for in a collective bargaining agreement, or split vacation days to their CET.

Cash payments

Provided that the agreement so provides, the employee may also allocate certain components of compensation to their CET: annual or contractually mandated bonuses, a 13th-month payment, and overtime premiums. Profit-sharing or incentive bonuses may also be deposited into the account, but be aware: if these amounts are subsequently converted to cash, they lose their tax and social security exemptions. This is a point that is often overlooked, even by the employees concerned.

Employers, too, may contribute to the CET in the form of time (using hours worked beyond the collectively agreed hours) or money, if the agreement so provides. Some companies use these contributions as a tool to build employee loyalty, for example, by crediting a certain number of days during special events.

What are the accumulated rights on a CET used for?

This may be the most important question. The CET is only useful if the employee knows how to use it. In fact, there are three main categories of uses, which are not mutually exclusive.

Funding Absences

Using accumulated days off to take an extended leave is the most common practice.

The CET can fund parental leave, a sabbatical, leave to start a business, leave to care for a family member or for family support, training taken outside of working hours, or enable an employee to gradually transition toward retirement as part of a phased retirement plan. The types of leave eligible for funding must be specified in the company agreement.

Supplementing One's Income

An employee may also request to convert their CET entitlements into cash, provided that the collective agreement allows it. This is known as monetization. The value of the days is calculated as of the payment date, unless the agreement specifies particular valuation methods.

Monetization is subject to income tax and payroll taxes. It does not qualify for any tax benefits. It is often the least tax-efficient option, but the most flexible for employees who need short-term liquidity.

Contributing to Your Retirement Savings

This is the most tax-advantageous option and likely the most underutilized. Employees can transfer a portion of their CET entitlements to a Group Retirement Savings Plan (PERECO) or their PEE, in accordance with the terms set forth in the company agreement. These transfers may be subject to limits and specific conditions, particularly regarding the types of eligible days.

The CET-PERECO bridge program offers two key benefits: the amounts transferred are exempt from income tax and social security contributions (excluding CSG/CRDS). In practical terms, employees convert unused time into tax-exempt retirement savings. This is a powerful tool, particularly for executives nearing the end of their careers who have accumulated a significant number of days.

What happens to the CET when an employee leaves the company?

The issue of resignation is often the one that raises the most uncertainty. Here is what the law provides for in the absence of specific provisions in a collective bargaining agreement.

If the collective bargaining agreement sets forth the conditions for transfer, the employee may transfer his or her CET to the new employer, provided that the new employer has also established a CET through a collective bargaining agreement. The rules do not need to be identical, but the system must exist.

If no agreement is reached regarding the transfer, the employee has two options.

1. Receive a severance payment, corresponding to the monetary conversion of all accrued benefits. This payment is subject to income tax and social security contributions under general law—without any preferential tax treatment.
2. Request that your rights be deposited with the Caisse des dépôts et consignations (CDC). This option allows you to defer the use of your rights without losing them. The deposited amounts earn interest and can be released at any time upon request by the employee or their beneficiaries.

A point of caution for HR managers: the transfer of records is not automatic; it must be expressly requested by the employee. It is the employer’s responsibility to inform the employee of this option at the time of departure—an obligation that is often overlooked and can expose the company to litigation.

CET and Employee Savings Plans: A Relationship That Requires a Holistic Approach

The CET is not a standalone program. It reaches its full potential when it is part of a coherent employee savings policy, alongside profit-sharing, incentive plans, the PEE, and the PERECO.

For the employer, the challenge is to manage the social liabilities generated by accrued entitlements. A balance of unused CET days represents a debt owed to employees, for which provisions are set aside in the company’s financial statements.

A well-managed CET, with clear rules on limits and usage, helps prevent this liability from growing out of control. But management isn’t limited to setting a cap: it also involves encouraging the use of these rights and providing tax-efficient exit strategies, particularly through the bridge to the PERECO, which reduces the company’s liability while offering employees tangible tax savings.

Why does working with a broker make a difference?

Setting up a CET is, first and foremost, an agreement that must be negotiated. And a poorly drafted agreement can have long-lasting consequences, such as overly restrictive terms that discourage employees, the absence of a cap, or unanticipated links to retirement savings plans that deprive employees of tax optimization opportunities that are otherwise available to them.

At Gerep, we operate on several levels. First, we work upstream to help companies design their overall employee savings plans. Next, we assist with negotiations with employee representatives and draft balanced clauses that protect both employees and employers. Finally, we provide long-term management: assessing liabilities, auditing accrued benefits, and advising employees on how to use their benefits through financial education.

The goal is not to make things more complicated. It is precisely the opposite: to make a system that may seem opaque easier to understand, so that the company and its employees can truly benefit from it.

Would you like to establish or revise your CET agreement?

Gerep works with you to design a program tailored to your company and your employees, in conjunction with your existing employee savings plans.