A time account (banca ore) allows for the flexible allocation of working hours. Overtime worked does not necessarily have to be paid out in full immediately, but can be accumulated in a personal time account and later offset against paid time off.
Even when using an hour bank, the applicable statutory and collective bargaining agreement provisions regarding working hours and rest periods must be observed. The specific structure of the hours bank is primarily determined by the relevant national collective agreement.
How does a time account work?
The time account records the difference between the hours of work contractually due and those actually worked:
- Time credit: The employee works more hours than scheduled.
- Time off in lieu: The accumulated credit is later taken as shorter working days or days off.
- Time deficit: The employee works fewer hours under the agreed flexibility scheme. However, a negative balance is only permitted insofar as this is provided for by the applicable regulations.
For example, an employee with an agreed weekly working time of 40 hours works 46 hours in one week. Provided the collective agreement permits this, the six additional hours can be credited to the time bank and used later for time off in lieu.
Time account or overtime?
Work carried out beyond normal working hours is generally regarded as overtime. Overtime must be recorded separately and remunerated in accordance with the provisions of the collective agreement.
However, a collective agreement may provide that the additional hours worked are transferred, in whole or in part, to a time bank. Depending on the arrangement:
- the basic pay is replaced by paid time off;
- only the overtime premium is paid;
- the premium is also converted into additional time off;
- or part of the hours is paid out and part is accumulated.
A time account therefore does not automatically mean that no premium is payable for additional work. The provisions of the applicable collective agreement are always decisive. The Italian Working Time Act expressly permits collective agreements to provide for overtime to be offset by corresponding rest periods.
What rules does the collective agreement set out?
The provisions can vary significantly depending on the sector. In particular, the following should be checked:
- which hours may be transferred to the time bank;
- whether the hours are credited on a 1:1 basis or with a premium;
- what the maximum time credit may be;
- the time limit within which the hours must be used;
- who determines when time off in lieu is taken;
- what happens to unused hours or upon termination of the employment relationship.
Not all collective agreements provide for a time bank. If a company-specific arrangement is to be introduced or if there is to be a deviation from the provisions of the collective agreement, it must be regularly checked whether a works agreement with the relevant trade union representatives is required for this.
What are the working time limits?
The general statutory limits also apply when using a time account. The standard working week is generally 40 hours, although the collective agreement may provide for a shorter working week or a flexible calculation over a longer period.
The average weekly working time, including overtime, must not, as a general rule, exceed 48 hours. The calculation period is normally four months and may be extended by collective agreement under certain conditions. Similarly, the statutory daily and weekly rest periods must be observed.
What applies in the absence of a time account?
If there is no valid time bank scheme in place, any additional hours worked must, as a general rule, be recorded as overtime and paid at the rates provided for in the collective agreement.
Companies should document time credits and their use in a transparent manner and monitor them regularly. The time bank must not be used to circumvent statutory or collective agreement provisions on working hours, rest periods and overtime.