TOIL is a workplace term for leave that employees can accrue by working overtime, without using up their annual leave allowance. In this article, we’ll explain what TOIL is and how it works for both employers and employees in more detail.
What Is Time Off In Lieu?
When employees work extra hours, employees can choose to pay them for their time, offer time off in lieu, or have no compensation at all.
If employers choose to reward employees working extra hours with time off in lieu (known as TOIL), this means that instead of being paid for their overtime, they are given an equivalent amount of free time back at a later date.
For example, if an employee works two extra hours, over and above their contracted hours, they would be given two hours of TOIL to take off at a convenient time. Each employer is free to set the conditions surrounding the implementation of TOIL policies and procedures in their organisation.
When Can TOIL Be Used?
TOIL can be used to cover a range of situations, including working overtime, working on public holidays, and taking leave without pay. How TOIL is used is at the discretion of employers, so some employers will have strict rules about how and when TOIL must be taken, while others give their employees more flexibility.
Either way, TOIL is a beneficial perk that allows employees to enjoy some extra free time away from work, and gives employers a boost of manpower during busy times without needing to make overtime payments.
How Does TOIL Work For Overtime Hours?
TOIL works by employees accruing extra hours which they can then take off at a later date, rather than being paid for them as an overtime payment. For example, if an employee works an extra hour each day Monday to Friday, they will have accrued 5 extra hours by the end of the week. These extra hours can then be taken off at a later date or converted into annual leave.
Employers should keep track of employees’ TOIL hours using a timesheet or similar system. Employees should also be aware of how many TOIL hours they have accrued so that they can take them when they need to.
If you’re an employer, you can offer TOIL to your employees as an entitlement in their contract of employment. Alternatively, you can offer it as an informal arrangement. If you do offer TOIL informally, make sure that you keep track of employees’ hours using a timesheet or similar system.
If you’re an employee, you can start accruing TOIL hours by working overtime. Make sure to keep track of your TOIL hours so that you can take them off at a later date. You should also check your contract of employment to see if your employer offers TOIL as an entitlement.
Why Is TOIL Needed?
Life is busy and the need for a healthy work-life balance has never been more prominent to prevent employee burnout that can arise from working long hours day after day. Overworked employees can make mistakes, need to take time off due to ill health or fatigue, and can contribute to high staff turnover rates – all of which employers want to avoid if possible.
An effective TOIL policy in the workplace can help to provide a good balance for employers and employees. It will allow employers to get more hands-on deck when work needs to get done during busy periods for example, but not at the detriment to employees’ health or home life commitments, as workers can reclaim the time worked back at a later date.
Is TOIL Regulated By Employment Law?
TOIL stands for Time Off in Lieu, also referred to as lieu time or compensatory time. There is no legal requirement for employers to offer TOIL, but many do so when staff are working additional hours or doing extra work beyond their standard working hours. Rather than receiving overtime pay, employees may receive paid time off or equivalent leave time for additional work hours in a later pay period, and this is distinct from annual leave entitlements.
Offering TOIL is lawful under UK rules on time in lieu legal compliance so long as arrangements do not undermine minimum wage or rest rights, and some employers use it to support business operations instead of paying double time. If an employer does offer TOIL, they must make sure that it is clearly stated in the employment contract or other employment agreements, with a clear company policy and clear communication so it is managed fairly and reasonably.
For example, an employer cannot force an employee to take TOIL instead of being paid for overtime when those hours were worked beyond a regular schedule or regular contracted hours, including on bank holidays. If you have any questions about TOIL or other aspects of employment law, you should speak to a solicitor experienced in employment law.
Including TOIL In Employment Contracts
There is no statutory right to time in lieu in the UK, so each employer must decide whether to offer it. It is subject to the UK Working Time Regulations, and employers must comply with those rules when managing extra work or additional hours.
A clear outline of the rules and procedures to follow relating to TOIL will ensure that both employer and employee know where they stand. That means the position should be set out in the employment contract and employment agreements, reflected in company policy and any lieu policy, and supported by clear communication on where employees can find it, usually within a staff handbook or policy library that is centrally accessed and designed to fit business operations.
If TOIL is an option in your workplace, you should check that the toil system explains how staff request time, how managers approve it, and how teams manage time across each pay period. TOIL arrangements also cannot reduce average earnings below the National Minimum Wage. An effective approach to hr operations should also cover record keeping and make it easy to track accrued time, including holiday accrual where relevant. For example, the policy should include the following information.
Whether employees are given time off instead of being paid for overtime
A detailed explanation of how the TOIL scheme works, including the minimum amount of time that can be worked to accrue TOIL, how much time can be built up, monthly allowances or limits, when it can be taken, or when it’s lost if not taken soon enough.
How TOIL records should be kept and where they can be accessed
What happens to TOIL that has been accrued when a contract is terminated or an employee resigns.
TOIL vs. Paid Overtime
There is always a debate on how employees should handle additional hours worked. On the one hand, paying employees for extra hours through overtime pay ensures that they are compensated fairly for the work that they have done, but on the other hand TOIL, also called compensatory time, gives employees paid time off instead of receiving overtime pay. A clear time off in lieu policy or TOIL system should also support business operations and help HR manage time consistently.
Additional payment can be important for workers who are on low wages and could do with the extra income. For higher earners, time away from work may be valued more than financial compensation. For those who prefer to take TOIL, this can lead to lower levels of stress and absenteeism, and it can also increase employee satisfaction and productivity.
Whilst both TOIL and paid overtime have their pros and cons for both employers and workers, ultimately, the decision of whether to pay employees for extra hours or give them TOIL should be based on the specific needs of the organisation. It is also worth distinguishing TOIL from flexi time, which usually means choosing start and finish times within agreed limits rather than banking extra hours for leave.
There is no one-size-fits-all solution; what works for one company may not work for another. Some employers may compare TOIL with enhanced rates such as double time when weighing up cost and practicality. The most important thing is to make sure that employees are happy and productive in their work environment and don’t feel under pressure to work more than their contracted hours.
What Are The Benefits Of TOIL For Work Life Balance?
There are a few key benefits of TOIL for both employers and employees, and unlike flexi time, which changes when someone works, TOIL offsets extra hours with time off later:
Employees can use TOIL to take extra time off, without using up their annual leave allowance. This means that they can save their annual leave for when they need it, such as for taking holidays, and some employers refer to these as lieu days.
TOIL can provide greater flexibility in terms of work-life balance. Employees can choose to take time off when it suits them, rather than being forced to work excessive hours. This can be especially beneficial for those with young children or other family commitments, and for handling personal matters, which supports overall well being.
TOIL can be used to cover unexpected absences, such as sick days or doctor’s appointments. This can help to reduce stress levels and improve productivity.
Employers can use TOIL to manage employee workloads, by giving employees extra time off when they are particularly busy.
TOIL hours can usually be carried over from one year to the next, giving employees a valuable buffer to use in case of emergencies but cut-off dates to use allowances are at the employers’ discretion. Some employers for example specify that TOIL must be taken the month directly after it was accumulated.
TOIL can be used to reward employees who regularly work overtime, although overtime pay or even double time may suit some roles better depending on business operations and whether employees would prefer financial compensation or time off.
What Are The Disadvantages Of TOIL?
There are a few potential disadvantages of TOIL to consider:
Employees may feel pressured to work overtime to accrue TOIL hours to get the time off that they want.
Employees may feel that they are not being paid fairly for their overtime work if they are not being paid extra, but are only receiving TOIL hours, particularly if they would prefer financial compensation.
If employees bank excessive TOIL hours, employers can find themselves short of cover if taken all at once.
If an employee leaves their job, they will usually lose any TOIL hours that they have accrued.
TOIL is not a guaranteed entitlement and employers can unilaterally change or cancel TOIL arrangements at any time. As such, employees should be cautious about relying on TOIL as a means of balancing their work, personal matters, family commitments, and overall well-being.
How To Calculate Time Off In Lieu?
The process for accruing time off in lieu (TOIL), recording it, and taking it will vary between organisations but this simple step-by-step guide will give you an overview of how to calculate allowances.
Determine the eligible hours that an employee has worked. This will typically be any hours that are above and beyond their regular contracted hours and standard working hours that fall within your organisation’s TOIL thresholds. For example, if an employee is contracted to work 20 hours in a given week but has clocked up 30 hours, those extra worked hours would equal 10 hours of leave time.
Depending on your workplace’s policy, any eligible hours submitted as TOIL will probably need to be approved by a manager either written or verbally, and recorded within the relevant pay period as accrued time. It’s important to be clear on exactly what counts as additional work hours. Sometimes workers may decide to skip a lunch break or come in early without being asked to try and rack up as much additional time as possible. This is rarely healthy or suitable for most employers, so it is important therefore that employers control this process by clearly stating the parameters of overtime and what will and won’t be counted.
After the hours have been approved, the employee should agree with their line manager when they can take time off at a later date, or receive payment for their TOIL hours if they prefer financial compensation instead. If the employee chooses to take time off, they should request time through the usual process and work with their employer to determine an appropriate time frame that helps balance work with personal matters.
How To Record TOIL
The best way to record TOIL hours is by using a timesheet or tracking app. How your time off in lieu is recorded will largely depend on your employers’ preference, their company policy, and how tech-savvy they are.
Most modern, digitally centred organisations will have some kind of employee app, intranet or software that gives employees a login to record things such as expenses, annual leave or overtime worked, which can also support HR operations. Others will still prefer the good old-fashioned pen and paper timesheet or spreadsheet approach, and sometimes a clocking system is used to automatically record employees’ hours when arriving and leaving work.
Regardless of where your toil is logged, the important information to keep track of is:
The dates you worked beyond your regular contracted hours
The number of additional hours worked, including start and finish times, and any accrued time, which commonly builds on a 1:1 basis
An overview of time off owed categorised by type (annual leave, TOIL), with some workplaces tracking approval within a pay period
Keeping accurate record keeping around a TOIL system helps employers manage time fairly and supports clear communication about how hours are earned, approved and used. Employees will also usually request time off in lieu in the same way they request standard annual leave or other leave time. Keeping accurate records of TOIL hours and being able to process them efficiently is essential for ensuring that employees receive credit for their hard work and that employees are fairly compensated workers for their efforts.
When Should Employees Take Their Time Off In Lieu?
Accurate record keeping is the basis for managing time off in lieu, because if employees build up extra hours but cannot use them properly, the benefit loses its purpose.
There are a few different ways that employers can approach this. Some might choose to be more lenient and let employees request time when they like, provided it doesn’t interfere with work commitments. Others may prefer to be more strict and set specific dates or times when TOIL can be taken. Digital tools can also help HR operations manage time, track accrued time, and support a consistent TOIL system.
The best way to manage this will depend on the workplace and what works best for employees and employers. A good company policy should set out how records are updated and shared with staff through clear communication, including any pay-period tracking, as well as how much time can build up before it must be used. It should also explain whether extra hours are taken back as lieu days. The main thing to keep in mind is that TOIL is meant to be a tool for preventing burnout and promoting a healthy work-life balance, so employees must be allowed to take their TOIL hours in a way that doesn’t adversely affect their well-being.
Summary
TOIL is a system that allows employees to claim time off for extra hours worked, over and above their normal working week. TOIL hours banked will usually be approved by a manager and should be recorded in a timesheet or tracking app so employers and employees can keep track of time owing. There is no legal requirement to offer TOIL, so the way it is managed is up to an employer, but they must ensure it is a fair and reasonable system.
TOIL is a workplace term for leave that employees can accrue by working overtime, without using up their annual leave allowance. In this article, we’ll explain what TOIL is and how it works for both employers and employees in more detail.
