Find out why TOIL, meaning time off in lieu, is such an attractive proposal – and how a TOIL policy makes all the difference.
Time off in lieu (TOIL) gives employees a way to swap overtime pay for paid leave. Modern working life doesn’t always follow a 40-hour weekday schedule, particularly when business travel is involved. And with flexibility increasingly valued as a workplace benefit, TOIL is an attractive prospect for employees.
Before implementing a TOIL policy in the office, it’s important to understand the time off in lieu meaning, intricacies, and challenges. In this blog, we’ll cover all the practicalities of crafting a TOIL policy that works for your business.
Time off in lieu refers to paid leave given to employees instead of (in lieu of) payment for time worked on top of their regular scheduled hours. It’s used as an alternative to the usual overtime rate of pay, with lieu days meaning days of paid leave.
As a simple example, imagine that a contracted weekday worker comes into the office to work a full 9-to-5 shift on a Sunday. To compensate for this time worked, the employee takes the following Monday off, with full pay.
Time off in lieu can also accrue, with extra hours built up over several weeks to equal a paid day off. Depending on your company’s TOIL policy, this could be added to the employee’s usual annual leave allowance or logged separately.
A time off in lieu policy comes in handy for managing teams with frequent travel. Business travellers often work unusual hours outside of their contract, which could potentially be cashed in for additional leave. While it’s still vital to draft a travel and expense policy to cover the usual per diem rates and travel expenses, using a TOIL policy offers additional flexibility.
Here are a few questions admin and HR teams should be prepared to answer with a finely tuned TOIL policy.
It depends. There are different types of employee travel:
Yes, particularly if your country’s labour laws require extra pay for overtime hours. Time in lieu is a fair method of compensation, provided these rules are clearly spelled out in a company-wide policy.
This should fall in line with existing employment contracts, so that time in lieu doesn’t contradict your usual travel expense and overtime rules. Set parameters and limits for time in lieu accumulation to prevent employees banking hours for unnecessary travel hours.
Yes, if this time is spent outside the parameters of contracted working hours. The normal commute time should also be excluded. It’s best practice to set up an automated tracking system where business travellers can record their transit time accurately.
There’s a wealth of benefits to offering time off in lieu, both for business travellers and employers.
TOIL is a win-win for employees and employers from a financial standpoint. Regular overtime pay rates can swiftly add up, particularly during time-sensitive projects with a high workload that require all hands all deck. TOIL offers a cost-saving alternative that, most importantly, both parties see as fair.
Working additional hours on an ongoing basis isn’t sustainable in the long term without the balance of paid leave. Indeed, research shows that working overtime without rest is the perfect recipe for anxiety, stress, and burn-out in the long run. Offering a time off in lieu policy gives employees the benefit of flexibility and control. With added leave, workers can take the time off they need to recharge their batteries, without losing those all-important holidays.
Increasingly, what employees want is time, not money. With this offered as an incentive, they’ll be more willing to step up productivity to meet important deadlines. They’ll also be more willing to put themselves forward for the demands of business travel, if the payoff involves some extra downtime at home with family.
Days in lieu should be recorded with a time tracking system using whichever method your payroll department prefers. Some might use traditional timesheets, while others will automatically log overtime hours with HR software.
It’s then easy to calculate overall days in lieu of each payroll period. For example, if your employee is normally contracted to work 35 hours per week but spends an additional 10 hours travelling to another city for a weekend conference, they’re entitled to take these 10 hours off in lieu.
It’s clear that accurate time tracking is the key component to calculating days in lieu. As you’re creating a TOIL policy, consider the most practical methods for time tracking. Your tracking systems should integrate easily with existing HR software for best management.
When it comes to business travel planning, turn to time tracking software to keep hours in transit stored with a verifiable paper trail. You can also use corporate travel management tools like Booking.com for Business, designed to track business travel expenses, hours, and itineraries from a central dashboard for better compliance. It’s also a good idea to create a time off in lieu template that your team can refer to for manual requests.
As overtime regulations vary from one country to the next, so do TOIL considerations.
Employers are not required to pay overtime, according to UK employment law. The only requirement is that the total average pay for hours worked meets the National Minimum Wage standard. However, it’s considered best practice to provide workers with some incentive, either financial or in the form of paid leave.
The UK Working Time Regulations state that employees cannot work more than an average of 48 hours per week over a 17-week period without explicitly opting out of this agreement.
HR teams must ensure that any time off in lieu of overtime complies with these conditions, both in terms of working time regulations and minimum wage. Good record-keeping is essential to prove this compliance.
Unlike the UK, employers in the USA are legally required to pay overtime according to the Fair Labor Standards Act (FLSA). While there’s no limit on the number of hours an employee can work each week, each hour after the standard 40 should be paid at a rate of at least 1.5 times their regular hourly rate. One thing to note is that overtime pay isn’t legally required for weekend or holiday work, though employers may choose to pay more as incentive. Another factor is that salaried employees may be exempt from these laws, which typically only apply to those paid hourly.
Time off in lieu of overtime is also legally permitted in the United States, where it’s called comp time. However, this is usually only allowed if the employee is exempt from the FLSA rules – usually salaried employees at a private company.
As in the UK, EU Working Regulations state that weekly hours shouldn’t exceed 48 without written exemption. Generally, French labour law sets the standard working week at 35 hours, with a limit of 10 hours per day. When employees are asked to work between 35 and 48 hours per week, an overtime policy is common.
In France, time off in lieu of overtime is called réduction du temps de travail (reduction of working time), or RTT. Specific regulations will vary from one French workplace to another. Some calculate RTT week by week, while others will average out the overtime over a longer period.
Time off in lieu regulations are very similar in Germany and France, as both are bound to the EU Working Regulations. The Germany Working Hours Act limits overtime hours to a maximum of 48 hours per week, though exceptions allow a maximum of 60 hours provided the six-month average stays low.
There is no legal requirement for overtime pay, though Germany regulations require all overtime hours to be documented. This applies not only to hours worked over the weekly limit, but also to any hours worked on Sundays and public holidays. Many businesses will still offer compensation for overtime, either in days in lieu or a higher pay rate.
Time off in lieu of overtime may be common throughout Europe and the United States, but it’s not standard practice worldwide. For example, in India businesses cannot provide non-monetary compensation for overtime. While they may offer additional time off as an incentive for hard work, this must be kept separate to legally mandated overtime pay.
While there are plentiful benefits to providing TOIL as a benefit, particularly for business travellers, there are some challenges to be aware of.
Business travellers might plan for longer journey times or take on unnecessary additional hours to accrue more TOIL. There can also be confusion between what qualifies as TOIL and what is a regular business expense.
Some teams will have greater opportunity to travel and earn days in lieu, while others may prefer overtime pay to TOIL as a benefit. This can disrupt your company culture with a sense of unfairness.
Tracking extra hours and separating days in lieu from personal time can be complex without the right systems in place.
As each country has its own employment regulations, it’s important to make sure that multinational companies are compliant with all region-dependent rules.
While every employee will have their own preferences, TOIL is generally a better choice for employers, primarily as a money-saving option. It’s nearly always cheaper to offer additional time off in lieu of paying high overtime rates, provided that this fits with the employee’s own preferences.
Before offering TOIL as an option, you’ll need to clearly state all terms and conditions. A time off in lieu template should list T&C in written form, with space for both employer and employee to sign and date.
Your time off in lieu template should include the following details:
It’s up to your admin team to create a policy that makes sense for your company, considering who is most likely to use it and whether limits are needed. If your company requires a high level of business travel, for example, you want to make sure that employees don’t bank excess hours while in transit. It’s also a good idea to limit days in lieu during your company’s busiest periods, so that you don’t have too many employees taking time off at once. Finally, be sure it integrates into your existing SME travel management systems.
The time in lieu meaning refers to a term used when employees receive extra time off for working extra hours, rather than overtime pay.
The lieu days meaning refers to the days taken off from work as compensation for overtime.
This depends on the employer’s policy, but employees can usually take payment instead of lieu days.
A time off in lieu, or TOIL policy, outlines how and when TOIL applies.
Time off in lieu saves money for the employer while encouraging productivity and a better work-life balance for employees.
Yes, business travellers can often accept days in lieu as compensation for overtime hours spent travelling for work.
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