What Is Time Off in Lieu (TOIL)?

At a glance

Time off in lieu, or TOIL, is a unique workplace policy that offers employees the choice of extra time off instead of traditional overtime pay. 

Published on:
June 12, 2024

Understanding Time Off in Lieu

As flexibility in all formats continues to be a trend across modern workplaces, models such as time off in lieu have emerged. Time off in lieu (TOIL for short) is a term used for when an employee has worked hours outside of their customarily allotted schedule and opts to accept extra time off for it in lieu of, or instead of, overtime pay. This system, which is not required by law but is considered a best practice, ensures that employees are fairly compensated for their extra efforts, fostering a sense of value and fairness in the workplace. 

Time off in lieu (TOIL) allows employees who work extra hours to choose additional time off instead of overtime pay, providing flexibility in modern workplaces. 

The Advantages of Time Off in Lieu

Companies can significantly lower costs when they don't have to shell out overtime pay. TOIL offers a powerful alternative for employers looking to cut costs, while still providing employees with the flexibility and paid time off they desire. Additionally, many TOIL programs are set up at a 1:1 ratio of time worked to time off earned, meaning that any hours worked beyond a contract can be banked time that they can use to claim as time off, further enhancing the cost-saving potential of TOIL.

TOIL helps employers save on overtime pay and offers employees more flexibility and vacation time, often at a 1:1 ratio of extra hours worked to time off earned.

Challenges and Considerations

Accurate record-keeping is crucial when implementing TOIL. It ensures that all employees' hours are properly accounted for, especially when TOIL is involved. This practice is essential for maintaining fairness and transparency in the workplace, as it clearly shows who has worked overtime within a pay period and who has earned or opted for time off in lieu of overtime compensation.

Also, because additional vacation time is appealing to many job seekers and candidates, employees may be tempted to abuse the policy. This could mean that some workers intentionally rack up unnecessary overtime hours to earn time off. Be mindful of TOIL maximums in your workplace, as well as the workers earning the most and whether or not their earnings match up with the work they produce. 

Businesses must accurately track employees' hours to ensure proper overtime records and avoid abuse of TOIL policies. 

Best Practices for Small Businesses

For small businesses, implementing TOIL effectively requires a well-thought-out approach. Start by establishing organization-wide policy standards. This includes setting maximums for how much time off employees can accumulate, defining a cut-off date for when time off must be taken, and considering restrictions on TOIL during busy seasons. By following these steps, small businesses can ensure a fair and balanced implementation of TOIL. 

To optimize TOIL, small businesses should set clear policy standards for managing time off requests and ensuring smooth operations.

Main takeaway

Time off in lieu (TOIL) is a workplace compensation policy that allows employees to take extra time off instead of overtime pay for hours worked beyond their regular schedule. TOIL offers cost savings for employers, more vacation opportunities for employees, and increased flexibility for everyone involved. To effectively provide TOIL policies, small businesses should establish clear guiding regulations, including time off limits, cut-off dates, and possibly restrictions during busy seasons or holidays to ensure smooth operations and prevent over-use.

About the author

Casey Pontrelli

Casey Pontrelli is a multi-talented professional with a background in content creation, branding, and social media marketing. Whether writing for a newspaper, eCommerce website, B2B startup, or a marketing agency, she has taken her strong background in journalism and turned her focus to SEO and content marketing. She’s written about everything from boutiques to cars to small businesses, and enjoys most when she knows her writing has had an impact. When she’s not writing up a storm or creating attention-grabbing social media posts, Casey enjoys hanging out with her partner and three cats, Eddy, Larry, and Marcus, going on long walks in the Green Belt, and, predictably, reading.

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