Updated on 7/6/2023
Topics we will be covering
Time Off In Lieu / TOIL definition
What does toil mean for employers and employees and should you offer it in your business? Let’s start with the definition. TOIL – Time Off In Lieu – is a term used in the United Kingdom (UK) to describe a type of paid leave that employees can take instead of overtime.
The time off in lieu meaning comes from a French phrase ‘in lieu’ which means instead of.
While it can be a strange phrase to see at first glance, the toil definition simply refers to when an employer agrees to give employees compensation with time off work, rather than money – e.g. ‘time off in lieu of overtime’.
How does time off in lieu work?
TOIL can be used for holiday days, sick days or personal days. By offering this as an option, businesses give employees the option of having time off instead of being paid extra for working additional hours.
Employees are usually entitled to a certain number of hours (or days) of time off in lieu of overtime each year, depending on their employer’s policy. The difference between this and annual leave is that annual leave is paid.
As a result, some people see it as a benefit as it allows them to take time off work without using up any of their annual leave. Others see it as a way of getting extra paid days off each year.
What does time off in lieu mean for employees?
Simply, time off in lieu represents flexibility for employees and is often used to reward them for working overtime. Alongside additional benefits you might offer, it can also help keep morale high as employees know that their hard work is being recognised.
At the same time, employees are able to cover shifts or provide relief for employees who are struggling with workload, so there’s an incentive there. It can be attractive for employees, so if you provide it, it makes good sense to promote your policies and have an evident structure around what you offer, how to secure it and when to use it.
Creating a time off in lieu policy
Often employers look to create time off in lieu guidelines, and there are some key considerations if you want to create or change a time off in lieu policy. There is no legal requirement for businesses to offer time off in lieu, so it’s down to your own wishes to decide what you offer.
The first is deciding who is eligible to be compensated and this is a company-made decision rather than a legal one. Employees who work overtime are usually eligible, whether full-time, part-time or temporary. However, there may be distinctions in your time off in lieu guidelines between employee types and job roles. For example, managers in senior positions may not be eligible for TOIL, and some functions (such as receptionists) may not have access. Think broadly while you create your guidelines.
Recommended reading: How to calculate holiday entitlement for casual workers.
The leave earned can be given as one continuous block of time or it can be accrued, but if the employee chooses to take it, they must use it within a certain time frame. In your policy, it’s a good idea to set a date ‒ most businesses choose to have this run through to the end of the financial year or calendar year. You might also want to advise against taking leave during your peak periods!
Adding and tracking TOIL in your HR software
Keeping accurate records of who has worked overtime could become overwhelming without the right HR software. The first step to handling the process is to agree time in lieu with each employee, ensuring they have agreed to the conditions. Adding these to your HR software or employee file opens the opportunity for further requests without a new agreement each time. If you are using HR self service software, your team can then add their allocated hours themselves.
The right HR software also makes tracking easy. We have a set-up where TOIL is removed from the entitlement if not used by the expiry date. If no expiry date is added, it will remain within the entitlement until booked, which removes any concerns over tracking and manually keeping on top of time off in your business.
Final notes to consider before you offer time off in lieu
Now you have the time off in lieu meaning - should you offer it? We think it’s a great benefit for many employees, however, it’s not something to simply set and forget. If you want to ensure employee welfare and engagement, it’s important to note that a reliance on overtime might reflect the workload of your team or indicate a deeper problem that needs to be solved.
The UK’s policies and legal considerations are also something to be mindful of. Under the Working Time Regulations, a worker’s working time ‒ including overtime, in any reference period ‒ should not exceed an average of 48 hours for every 7 days, which means it should ideally be seen as an irregular method of rewarding work that is ‘above and beyond’.
A watchful eye on this area prevents time off from being open to abuse such as team members lagging on projects to clock up overtime, or from employees struggling to meet their daily tasks.
With the right HR software on hand to track and help your organisation avoid potential pitfalls, you can offer TOIL without concern. See if People HR is best for your business with a demo or try it for free today.
