What is time off in lieu? Or lieu days? Are the the same as lieu days? Our guide breaks it all down and explain everything you should know about these concepts. Also learn about their benefits, how to implement a time off in lieu policy and what are best practices amongst other UK employers.
What Is Time Off in Lieu?
Time off in lieu, also known as TOIL or Time in lieu, refers to the compensated hours that an employee earns for working extra time or on days when they would usually not work, such as bank holidays.In other words, time off in lieu allows employees to take time off rather than being paid overtime.
Time Off in Lieu, Days in Lieu & Lieu Day Meaning
It’s simple - all these terms relate to the same thing, which is to offer time-off to an employee instead of paying them overtime.
Time off in lieu may be calculated in days or hours, while a “day in lieu” or a “lieu day” will be calculated as a full day to take off by the employee.
Difference Between Time Off in Lieu and Overtime
Time off in lieu and overtime present two distinct methods of compensating extra work for employees.
While overtime typically offers additional pay, time in lieu provides equivalent time off.
Benefits of Time In Lieu - Worth It for Employers and Employees?
The main benefit of offering days in lieu to employees is to promote worklife balance within the company and save on cashflow too - you won’t have to pay overtime, and therefore additional pay, in payroll.
As burnout is a major issue in today’s workforce, offering more time off to employees who have worked more than planned is a great way to address one of its key root causes - overworking.
Giving time off in lieu to employees is also a great way to boost employee morale, through a positive company culture. Providing additional time off proves to employees the company respects boundaries when it comes to contracted hours and provides compensation when employees go over them.
Last benefit worth mentioning here, is that additional time-off is one of the most popular benefits amongst employees. It can only help with your employer brand in the long run.
How to Work Out Time Off in Lieu
The calculation for time in lieu or a day in lieu is typically straightforward:
• an hour worked overtime translates into an hour off,
• a day worked overtime translates into an additional day off.
Some employers may offer a higher rate, such as one and a half hours off for each overtime hour or a day and a half for a day’s worked. For example, this can be offered on days that are usually not worked, such asb bank holidays or weekend days.
However this is completely discretionary to the company’s policy on TOIL.
Implementing a Time in Lieu Policy: Best Practices
UK Legislation Regarding Time Off In Lieu
In the UK, legislation surrounding 'time off in lieu' is governed by contractual terms and the Working Time Regulations 1998, which stipulate employees and workers can work a maximum 48-hour in a work week.
Other than that, TOIL is not explicitly defined. This means that as an employer, you have a certain level of freedom with setting your company’s policy when it comes to offering days in lieu of work.
TOIL and Employment Contracts
If you do want to create a time off in lieu policy for your company, you’ll need to either add a clause in your employment contracts or your employee handbook.
Things to bear in mind when formulating a new policy:
- Write the policy with as much detail as possible to avoid any doubt for yourself or employees, and keep things fair (see below for details on this)
- If you’re adding a new policy to your Employee Handbook, you’ll need to communicate to your team
- Same for future modifications - any modification to an employee policy should be communicated to your team.
Things to keep in mind when adding a clause to an employment contract:
- Always get support from a lawyer/sollicitor when adding new clauses to your contract. It’ll save you time and money in the long run.
- If you’ve already issued employment contracts that don’t include this clause to employees, give your employment a quick check to see if there are any mentions of time in lieu not being allowed.
- For employees who don’t have this clause in their contract, you can either ask them to sign an amended version of their employment contract, or communicate to them your new employee policy.
Best Practices for Writing a TOIL policy and implementing it
Detail and clarity: Your policy should detail very clearly:
- in what scenario(s) TOIL can be offered to employees
- how much time in lieu can be accrued every month
- if employees have the right to choose between overtime pay, or TOIL or if one takes precedence over the other
- what the maximum amount of time when TOIL has to be taken: can it be carried over to the next year? Or does it need to be booked within the current calendar year/quarter/month etc?
- what happens when an employee leaves and has accrued TOIL they’ve not yet taken off?
Being clear and transparent on the rules surrounding time off in lieu will ensure the policy is applied fairly and consistently across your team.
Once your policy has been written, you can communicate it to your employees so they’re aware of the new rules.
Finally, we’d recommend keeping a log of the time in lieu booked by your employees. This can be through a manual log, or by creating a separate time-off policy. With Onfolk, you can create and customise your time-off policies, including for TOIL!
Onfolk Makes Managing Payroll and HR Simple and Stress-Free
The benefit of combined payroll and HR software is that you save a ton of time on administrative tasks related to running your business while saving money on expensive accountants and HR consultants.
Onfolk is a modern, cloud-based platform built for startup founders and business owners employing a diverse team. Our platform combines HR software with almost fully automated payroll, so all your employee and pay data is in one place, accessible at all times.
As your employee data syncs automatically with your payroll, it takes just 3 minutes every month to run. This also means you only need to keep one system updated, ensuring your employee data and payroll are always free of discrepancies.
On top of being simple and fast to use, Onfolk provides you with other tools key to building your team effortlessly: a time-off management tool, 2-click employee onboarding and offboarding, customisable task lists, integrations with Xero, Quickbooks and your pension provider, fully customisable people metric dashboards and reports, and so much more.
If you use Slack to communicate with your team, Onfolk integrates with Slack too - get reminders for employee birthdays and anniversaries, as well as who is joining soon or on holiday that week.
Running a business comes with many responsibilities - Onfolk takes care of payroll and people admin for you, so you can focus on growing your team and business instead.
What is time off in lieu? Or lieu days? Are the the same as lieu days? Our guide breaks it all down and explain everything you should know about these concepts. Also learn about their benefits, how to implement a time off in lieu policy and what are best practices amongst other UK employers.
What Is Time Off in Lieu?
Time off in lieu, also known as TOIL or Time in lieu, refers to the compensated hours that an employee earns for working extra time or on days when they would usually not work, such as bank holidays.In other words, time off in lieu allows employees to take time off rather than being paid overtime.
Time Off in Lieu, Days in Lieu & Lieu Day Meaning
It’s simple - all these terms relate to the same thing, which is to offer time-off to an employee instead of paying them overtime.
Time off in lieu may be calculated in days or hours, while a “day in lieu” or a “lieu day” will be calculated as a full day to take off by the employee.
Difference Between Time Off in Lieu and Overtime
Time off in lieu and overtime present two distinct methods of compensating extra work for employees.
While overtime typically offers additional pay, time in lieu provides equivalent time off.
Benefits of Time In Lieu - Worth It for Employers and Employees?
The main benefit of offering days in lieu to employees is to promote worklife balance within the company and save on cashflow too - you won’t have to pay overtime, and therefore additional pay, in payroll.
As burnout is a major issue in today’s workforce, offering more time off to employees who have worked more than planned is a great way to address one of its key root causes - overworking.
Giving time off in lieu to employees is also a great way to boost employee morale, through a positive company culture. Providing additional time off proves to employees the company respects boundaries when it comes to contracted hours and provides compensation when employees go over them.
Last benefit worth mentioning here, is that additional time-off is one of the most popular benefits amongst employees. It can only help with your employer brand in the long run.
How to Work Out Time Off in Lieu
The calculation for time in lieu or a day in lieu is typically straightforward:
• an hour worked overtime translates into an hour off,
• a day worked overtime translates into an additional day off.
Some employers may offer a higher rate, such as one and a half hours off for each overtime hour or a day and a half for a day’s worked. For example, this can be offered on days that are usually not worked, such asb bank holidays or weekend days.
However this is completely discretionary to the company’s policy on TOIL.
Implementing a Time in Lieu Policy: Best Practices
UK Legislation Regarding Time Off In Lieu
In the UK, legislation surrounding 'time off in lieu' is governed by contractual terms and the Working Time Regulations 1998, which stipulate employees and workers can work a maximum 48-hour in a work week.
Other than that, TOIL is not explicitly defined. This means that as an employer, you have a certain level of freedom with setting your company’s policy when it comes to offering days in lieu of work.
TOIL and Employment Contracts
If you do want to create a time off in lieu policy for your company, you’ll need to either add a clause in your employment contracts or your employee handbook.
Things to bear in mind when formulating a new policy:
- Write the policy with as much detail as possible to avoid any doubt for yourself or employees, and keep things fair (see below for details on this)
- If you’re adding a new policy to your Employee Handbook, you’ll need to communicate to your team
- Same for future modifications - any modification to an employee policy should be communicated to your team.
Things to keep in mind when adding a clause to an employment contract:
- Always get support from a lawyer/sollicitor when adding new clauses to your contract. It’ll save you time and money in the long run.
- If you’ve already issued employment contracts that don’t include this clause to employees, give your employment a quick check to see if there are any mentions of time in lieu not being allowed.
- For employees who don’t have this clause in their contract, you can either ask them to sign an amended version of their employment contract, or communicate to them your new employee policy.
Best Practices for Writing a TOIL policy and implementing it
Detail and clarity: Your policy should detail very clearly:
- in what scenario(s) TOIL can be offered to employees
- how much time in lieu can be accrued every month
- if employees have the right to choose between overtime pay, or TOIL or if one takes precedence over the other
- what the maximum amount of time when TOIL has to be taken: can it be carried over to the next year? Or does it need to be booked within the current calendar year/quarter/month etc?
- what happens when an employee leaves and has accrued TOIL they’ve not yet taken off?
Being clear and transparent on the rules surrounding time off in lieu will ensure the policy is applied fairly and consistently across your team.
Once your policy has been written, you can communicate it to your employees so they’re aware of the new rules.
Finally, we’d recommend keeping a log of the time in lieu booked by your employees. This can be through a manual log, or by creating a separate time-off policy. With Onfolk, you can create and customise your time-off policies, including for TOIL!
Onfolk Makes Managing Payroll and HR Simple and Stress-Free
The benefit of combined payroll and HR software is that you save a ton of time on administrative tasks related to running your business while saving money on expensive accountants and HR consultants.
Onfolk is a modern, cloud-based platform built for startup founders and business owners employing a diverse team. Our platform combines HR software with almost fully automated payroll, so all your employee and pay data is in one place, accessible at all times.
As your employee data syncs automatically with your payroll, it takes just 3 minutes every month to run. This also means you only need to keep one system updated, ensuring your employee data and payroll are always free of discrepancies.
On top of being simple and fast to use, Onfolk provides you with other tools key to building your team effortlessly: a time-off management tool, 2-click employee onboarding and offboarding, customisable task lists, integrations with Xero, Quickbooks and your pension provider, fully customisable people metric dashboards and reports, and so much more.
If you use Slack to communicate with your team, Onfolk integrates with Slack too - get reminders for employee birthdays and anniversaries, as well as who is joining soon or on holiday that week.
Running a business comes with many responsibilities - Onfolk takes care of payroll and people admin for you, so you can focus on growing your team and business instead.
