It’s 2021. Times have changed and working patterns have evolved. 

Those times when all of us had to work a 9 to 5 have now changed. Today, flexibility in the workplace is the new normal and many employers are quickly adapting to this. So how is it being done? There are numerous ways that employers are turning to, to increase productivity in their organization and make the work environment as stress-free as possible. 

One of these methods is time off in lieu or TOIL. Instead of paying your employees for spending extra hours on work, you can give them time off work instead. This is what time off in lieu is, with ‘in lieu’ literally meaning ‘in stead’.

In today’s topic, we will be going through the meaning of time off in lieu. You will learn its advantages and disadvantages. In addition, you will learn how to calculate time off in lieu and a little about compensatory time off.

What is Time Off In Lieu?

What is TOIL and how does time off in lieu work? Time off in lieu or TOIL is a way to reward employees for working extra hours. In this process, instead of paying for the extra hours worked, you give your employee time off work. To do that, you need to keep track of your employee’s working hours, their allocated allowance, if they’ve received paid time off previously, and of course, if they’ve taken time off in lieu before. Managing TOIL can be hard, but with a system like AttendanceBot, you can easily keep track of your employees’ time off in lieu.

What is Day in Lieu?

Day in lieu is simply an ‘alternative holiday’ that an employee takes for working on a public holiday. In other words, employees take another day off in case they worked for a day they were not expected to work.

Time Off In Lieu or Paid Overtime?

One question that arises when discussing TOIL is, whether employees should take time off in lieu or should they be paid for any extra hours worked. The answer is time off in lieu is better than a paid overtime due to several reasons:

Cost-Effective

Employers find TOIL better because paid overtime means an extra cost. 

Jobs With Stable Workflow

TOIL is better for jobs that don’t require a steady workflow and if an employee takes time off work, it wouldn’t disturb this flow.

Effect of Overtime

Working overtime but getting paid for it isn’t as flexible as TOIL. Paid overtime can take its toll on an employee’s health, increases fatigue, and disturbs their personal life. Moreover, working overtime is a great recipe to disrupt an employee’s work-life balance. In a study conducted in 2019, it was found that working long hours leads to sickness in people. 

Overtime can have drastic effects on employees’ health. In a study conducted by Harvard named ‘only the overworked die young’, it was found that overworking leads to serious health complications like heart attacks and strokes. Taking time off in lieu has its benefits for employees in terms of their health. We will get to this in detail in later sections.

Overworked employee

Legal Ramifications

Let’s see TOIL’s ruling in different countries:

USA

In the US, it is mandatory for certain sections of employees to work overtime. According to the Fair Labor Standard Act or FLSA, you can ask your employee to work overtime and can even fire them if they refuse. Although there is no limit to how many hours can you require your employee to work, the only condition here is to pay the employee time and a half the employee’s regular pay. This is in the case an employee has worked more than 40 hours a week. In some states like Alaska and California, employers pay employees overtime if they work more than 8 hours a day. 

UK

In the UK,  employees have to work overtime if their contract says so. Even if it does, according to the UK government, you cannot force your employees to work for more than 48 hours a week. Some employers can give employees time off in lieu for working overtime instead of paying for it.

Canada

According to Section 174 of the Code, you must pay your employees for working overtime in Canada. TOIL is allowed if the accumulated leave is calculated at a rate of 1.5 hours of leave for each hour spent as overtime. 

Australia

In Australia, according to Fair Work Commission, you can agree with your employee on taking TOIL for overtime. It also states that an employee has the right to elect for payment at any time. However, It is strictly important for this agreement to be in writing. Additionally, TOIL can be taken at a single time. 

How to Calculate Time In Lieu?

To meet deadlines, working extra hours is a common thing in organizations. However, employers should manage an employee’s days in lieu effectively and track their working hours. In case your employees have exhausted themselves by working overtime, giving them time in lieu is a good idea. 

But how can you calculate time off in lieu? One simple rule is to give the extra day of work as off on another day. For example, if an employee was supposed to work 3 days a week but worked 2 days extra, they can be given 2 off days in lieu. Similarly, if an employee had to work 25 hours a day but worked for 30 hours, they are entitled to getting that 5 hours in lieu on another day. 

Advantages of Time Off In Lieu

TOIL has several benefits. Let’s take a look at them:

Health Benefits

Taking some time off is always a good idea. Taking TOIL has various health benefits. It prevents employees from being overworked and exhaustive. During the pandemic, most of the work is on screens. Taking time off in lieu can be a healthy way to give your eyes some rest. 

Gives Extra Time

Some employees prefer having extra time on their hands instead of getting paid for extra work hours. Time off in lieu is a great way to give back time to employees. This is especially important in jobs where employees are earning high salaries. In this case, employees value time off work more than getting paid a little more for overtime.

Cost-Effective

Giving time off in lieu is beneficial for employers too. When you don’t have to pay your employees an amount for their extra hours worked, you save money. TOIL is a cost-effective way to prevent additional payments to your employees.

Mental Health Benefits

Giving your employees time off in lieu can have positive effects on their mental health. Think of it in this way, an employee who has worked extra hard this week is in dire need of some rest. TOIL helps them reset, freshen their mind, and get prepared for the next week. 

Builds a Culture of Trust

A well-communicated TOIL policy is a great way to foster trust between employers and employees. Secondly, TOIL is a great way of letting your employees know you care for them and their health. In this way, they feel valued and a healthy ‘give and take’ relationship is built.

Disadvantages of Time Off In Lieu

As everything that has pros has some cons too. Cons of TOIL are:

Abuse of TOIL

Employees can potentially abuse taking time off in lieu. This is because having days off in a week can be an attractive idea to many employees. To get time off in lieu, employees sometimes intentionally work overtime. Sometimes, employees can claim to be overworked in hopes of using TOIL as a supplement to regular holiday pay.

Low-Earning Employees

Time off in lieu is a good idea for employees that are earning high salaries. In organizations where employees are earning low pay, prefer getting paid for overtime instead of a day off. 

Overtime Becomes Norm

When employees have time off in lieu in mind as an adjustment to their extra work hours, overtime becomes the norm. In this case, employees overwork themselves and become exhausted often. If this happens quite often you should try and understand the reason for this. It could either be that you have less staff or your employees need training in managing their work effectively. 

Tough To Implement

TOIL can sometimes be hard to administer in all organizations. It can be hard to implement time off in lieu for the entire workforce. For example, although TOIL can be universally implemented in most job positions. Therefore, it’s important to consider job positions, situations, and the needs of your employees and the organization in order to implement a successful TOIL policy.

How to Effectively Implement TOIL Policy?

It can be hard for managers to keep track of every time an employee takes TOIL or if they have accumulated their time off in lieu. However, a few techniques can help you successfully implement a TOIL policy.

Communicate the Terms Clearly

It is important to communicate what you expect from your employees. In the case of TOIL, make sure to clarify the details. It’s a good idea to first confirm if the employee wants time off in lieu or compensation for overtime.

It’s always nice to reward your employees for working overtime in some way. Even a simple thank you can sometimes mean a lot to your employees. So make sure, to clearly communicate the terms before implementing this policy. 

Consider a Written Policy

When implementing a TOIL policy, a written policy can be a good idea. This document will state everything you need to communicate to your employees and what they have to follow. This policy should be included in the employee handbook including the following subsections:

  • Eligibility for taking TOIL
  • Validity of TOIL 
  • The minimum amount of time that can be recorded as time off in lieu

In the policy, both parties should agree that TOIL will be offered if an employee works extra hours outside of their contracted work hours. 

Establish a Culture of Trust

Trust strengthens the relationship between employees and their employers. In the case of TOIL, trust plays an important role.  An employee should be comfortable asking for time in lieu and the employer should be able to grant them their time off in lieu. The employee should be honest in terms of not abusing the TOIL taken.

Time Off In Lieu Record Sheet

Previously companies used TOIL record sheets to manually record the time off in lieu data. This sheet recorded things like the reason for TOIL earned, the days and dates on which TOIL was earned, the balance days that remained to be taken as TOIL, and the signature of the employer who approved the TOIL holiday of an employee. Today, advanced systems are used to manage and record the TOIL with ease, which we discuss in the next heading.

Manage TOIL Easily With AttendanceBot

To carefully calculate how many hours or days an employee has worked, you can use systems that are built specifically for this purpose. AttendanceBot for example lets you keep a record of the time an employee takes off in lieu.  In this way, it helps you increase productivity and make the work environment more flexible.

To set up TOIL, simply go to settings > Time Tracking > General Time Settings and enable ‘Allow time-off-in-lieu’.

To avail TOIL hours, simply type “apply”, select “toil”, and enter the hours you wish to apply time-off for.

For a detailed step-by-step guide, see this article.

Compensatory Time Off

Another method to promote flexibility in the workplace is through giving some paid time off to your employees. Compensatory time off or comp time is a practice of giving your employees paid time off or PTO instead of paying for their overtime. This process is similar to that of TOIL. However, comp time shouldn’t be confused with flex time. Flextime is the practice of an employee scheduling their working hours in such a way that they make time for their personal matters and their family too. Comp time is simply a paid time off for employees who’ve worked extra hard.

Like TOIL, compensatory time off isn’t a legal right of an employee. Many private workplaces do not have a compensatory time off policy for salaried employees. On the other hand, non-exempt employees in public workplaces are entitled to it. You can ask your employee if they would rather prefer comp time in lieu of overtime pay. At the end of the day, this decision should be theirs. 

The Bottomline

Time off in lieu is a great way to give thanks to your hard-working employees. It is however a nice idea to ask them if they prefer getting paid for their overtime instead of taking some time off work. TOIL is a great way to prevent employees from burning out and helps promote a culture of flexibility.