The regular pattern most of us know and expect is that then you work overtime, you'll be paid for it, perhaps at a higher rate of pay. But there's times when throwing money at people isn't the right answer, what they need is time off, sometimes to recover from working those long hours.
That's where Time Off In Lieu of Overtime (TOIL) comes into play. Instead of getting paid for those extra hours worked, you give them a little more annual leave to take at a later date, so they can have a day off instead.
You'll see time in lieu in all kinds of businesses, particularly those that have flexible working arrangements, variable workloads, processes that require X number of people to be present at a time, or when people need to work extra hours.
So places that have sudden demands for staff, like restaurants, call centres or security contractors might use this when they really need extra cover.
This can be a bit of a headache to administer (although we'll show you the easy way later in this article) but it can be a useful compromise in certain cases.
Here’s a quick guide to how it works.
What is Time Off In Lieu?
Time Off In Lieu is when someone works overtime, but instead of getting paid overtime for their efforts, you give them a bit more annual leave allowance for another time ('in lieu' means ‘in place of’).
So if things are busy and the business needs all hands on deck, the boss might say, “If you work a half-day on Saturday I’ll give it back in TOIL”.
If they don't have anything on that Saturday, they might be happy to pitch in to help out, knowing they’ll bank a half-day of leave which they can use later in the year.
What are the rules around TOIL in the UK?
Firstly, there’s no defined rules we can tell you - it’s up to businesses and employees to define the terms of a TOIL agreement.
You'll see it used unofficially, with no set policy written down anywhere. Particularly in smaller companies, where the temptation to keep things casual and rely on verbal agreements is strong (until something goes wrong).
And you can imagine things going wrong if it’s not written down. What if someone works under a TOIL agreement, but their extra leave allowance is conveniently forgotten about?
TOIL is often called upon on short notice, but that doesn’t mean the formalities should be skipped.
How should you deal with TOIL?
It begins, as we always recommend, by having a proper staff absence policy.
This doesn’t have to be a major undertaking if you haven’t got one yet. In fact, we’ve made some customisable templates for you.
In bigger organisations, creating rules around TOIL can get complicated. Even so, if your business is the type that might require usage of Time Off In Lieu, it’s worth adding a section in to your policy about how it works, and how it’ll be recorded.
This should include:
- How many days maximum can be banked as TOIL
- When the TOIL days have to be used by (end of the year or sooner?)
- How much TOIL, across the business, is too much? (banking too much will increase holiday demand later in the year)
Remember, employees can't be forced to work paid overtime, and can't be forced to say yes to a TOIL agreement. And you must adhere to the Working Time Regulations 1998, which state that they can't work more than 48 hours a week (including overtime) without written agreement.
Examples where time in lieu works
Here's a couple of good examples where it can work well, from my own experience.
Occasionally in software development you'll see late night, even all night working to get software releases out while there's little or no use of the product.
Typically software developers won't have overtime in their contract, they'll be expected to work the hours necessary to get their job done. But when you ask someone to pull an all nighter, you'll want to give them some time off to recuperate, you can't expect them all bright and fresh for the rest of the week. So yeah, give them a day off in lieu of the additional time worked.
Working long hours is tiring, even with breaks, sugary tea and intravenous caffeine injections. Money isn't always the answer here, sure it can motivate, it can reward. But if you want employees to work long hours, maybe you have a big client deadline, a late production run to catch up on. At times like these you'll find more willing workers if you give them time off in lieu instead of pay, that way they can rest, recover, and come back fresh.
Earning extra time off
Imagine you're getting married this year and need a heap of time off for preparations, the big day, a honeymoon. Or perhaps you've got a big family celebration and you want more holidays this year than usual. Maybe you've got young kids and need more time off to cover school holidays.
These are all good examples of where rewarding the extra hours with TOIL is better than pay. A way to let your team build up extra days of leave by working overtime, it provides a lot of flexibility. Time off instead of the money.
The downsides of TOIL
TOIL is usually called upon when the workload is particularly busy for everyone in the business.
It can highlight staffing issues, though, if it’s being relied on frequently throughout the year. As a temporary measure it’s fine, but too much will really disrupt the holiday schedule. If person A is taking back TOIL time which causes person B to be denied their request on that day, that’s unfair.
If it's being relied upon a lot to cover staffing shortfalls, there are clearly underlying issues with staffing that need to be addressed long-term.
If TOIL isn't managed correctly, it could lead to chaos towards the end of the year when everyone wants to use up the extra leave they've accrued. There's also the possibility of a general imbalance across your company if people start getting stressed from all the overtime they're working, leading to more leave requests and possibly higher rates of sickness absence. Not good.
Employees need to be aware of exactly how their contributions are recorded, so they can understand what they're entitled to, and know that they’re being treated fairly compared to their colleagues.
Having clear absence & TOIL policies, and a proper system for recording leave is important to prevent any problems in future.
Keeping track of TOIL
We've built a relatively simple way to record and keep track of TOIL in our staff leave planner Timetastic. The system is very simple and effective, you really don't want anything complex.
One of the worst things we see with TOIL is when companies state it has to be taken within a certain timeframe. It's really not necessary, people will take it when it's convenient, in most cases straight away, probably the next day or two, to recover from the extra hours worked. What you don't want is an archaic rule that means if they don't take it they lose it. Even worse, if you do have that rule then you're just adding yet another layer of bureaucracy that you need to administer and track.
We try to keep everything we do as simple as it can be, we are not here to create hoops for people to jump through and admin headaches for people to administer. Last thing anyone needs is another spreadsheet to update!
What you do is hit the 'Time in Lieu' link on your employees calendar summary.
Then add the day in, we also suggest adding a short comment to say why you're adding time in lieu. In this case above you can see Edward worked late on a Friday night to do a software release.
In the summary you can see a day has been added to their annual allowance..
Well that's it really.
The TOIL has been added to the users annual holiday allowance, so they have 1 extra day to book off at some stage.
There's no attempt to reconcile that one day added to their allowance to a specific day they they took off work. Who cares what day it was? Why does it matter? They get an extra day off, and it's all recorded.
If you want to see how this works in Timetastic for yourself, there's a free trial which is fully functional, you're welcome to take a look, it only takes a minute or two to see how it makes tracking TOIL very simple.