On 28 April 2019, the law introducing a legal framework for the possibility of a time savings account for employees in the private sector came into force.

Companies having introduced a time savings account in execution of an existing collective bargaining agreement may continue to apply the rules set out therein until the expiry of such collective bargaining agreement.

A time savings account may only be agreed in the context of a collective bargaining agreement or of an interprofessional agreement.

Employees who have more than two (2) years' seniority within the company have the possibility to collect rights to paid leave of up to 1800 hours on a special account. The employee shall be entitled to use such hours at a later stage to carry out personal plans, such as a sabbatical leave or child-rearing without having recourse to unpaid leave.

The time savings account which is held in hours can be supplied by additional paid leave days, overtime hours or compensatory rest. The account can be used by means of leave paid at the hourly rate applicable to fulltime work or halftime work with a minimum of ten (10) hours per week.

Such leave is considered effective working time for the determination of the annual leave of the employee and for other rights and obligations such as seniority or complementary pension schemes. As long as the employee is on leave, the employer is obliged to maintain the same or at least a similar employment and salary. Furthermore, the employer must foresee the financial counterpart of such a time savings account increased by the employer contributions and adapted, if applicable, to the costs of living, such financial counterpart having hence to be re-evaluated on a yearly basis.

In the event of a settlement of the time savings account, the employer pays to the employee a compensatory indemnity corresponding to the monetary conversion of all acquired rights multiplied by the hourly rate applicable on the day of payment. In the event of bankruptcy of the employer, the Employment Fund (Fonds pour l'emploi) guarantees the claims arising from a settlement of the time savings account up to twice the minimum social wage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.