What is the hours bank in a nutshell

Instead of paying overtime in the month it occurs, the employee accumulates those hours in a bank. Later they can leave earlier, arrive later, or take a day off — using those accumulated hours.

It is a flexibility trade-off: the company gains extra capacity during peak periods. The employee gains more flexibility in their personal schedule.

The two types of hours bank in Portugal

1. Hours bank through a collective bargaining instrument (IRCT — instrumento de regulamentação coletiva de trabalho): provided for in a collective labour agreement. No individual agreement is needed — it applies automatically to all covered employees.

2. Hours bank by individual agreement: agreed in writing with each employee.

Legal limits for individual agreements:

• Maximum of 150 hours of additional work per year
• Maximum of 2 hours of additional work per day
• Maximum of 60 total working hours per week

How to implement it step by step

1. Check the applicable CCT (collective bargaining agreement). The CCT for your industry may already include an hours bank provision.

2. Draft a simple individual agreement covering: the maximum limit of accumulated hours, how to check the balance, how and when the hours can be taken, and what happens to the balance at year end.

3. Obtain written agreement from each employee. It cannot be imposed.

4. Configure the time-tracking system to record the balance. Without a reliable time-tracking system, managing the hours bank is very difficult. To understand how to calculate this balance correctly, read how to calculate your employees' hours balance.

5. Communicate the balance regularly. The employee has the right to know their balance — monthly is the reasonable minimum.

What happens to unused hours at year end

If the employee has accumulated hours and has not used them by the agreed deadline, the company must pay those hours as supplementary work with the corresponding legal surcharges.

There is no hours bank that simply expires without consequences.

Hours bank and refusal of overtime

An employee may refuse to work overtime when they have reached the legal limit — but if an hours bank exists, the extra hours can be compensated with rest time instead of being paid. To find out when an employee can refuse, read employee refuses overtime: when they can refuse.