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.

What does time off in lieu mean?

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.

How does time off in lieu work for business travel?

A time off in lieu policy comes in handy for managing teams with frequent travel. Business travelers 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.

Does travel time count as working time?

It depends. There are different types of employee travel:

  1. Home to work travel as part of an everyday commute is considered personal time. As such, it’s not a deductible business expense, so should not be compensated under a time off in lieu policy.
  2. Same-day travel to another city falls outside of the bounds of everyday commuting, which means the employee could be compensated for this travel time. However, it would only qualify for TOIL during overtime, such as business-related travel on a weekend.
  3. Overnight travel away from home qualifies as work-related business travel. Any time spent on necessary travelling outside of an employee’s usual contracted hours could qualify for overtime pay or TOIL.

Plan your next business trip the easy way

Try free-to-use Booking.com for Business for choice, control, savings, and 24/7 support.

Should I get time in lieu for travel?

Yes, particularly if your country’s labor 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.

Does TOIL include travel time?

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 travelers can record their transit time accurately.

What are the benefits of time off in lieu?

There’s a wealth of benefits to offering time off in lieu, both for business travelers and employers.

It saves money

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.

It promotes a better work-life balance

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.

It boosts employee productivity and satisfaction

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.

How to calculate time in lieu

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.

How do I track time off in lieu as an admin?

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.

The legalities of TOIL around the world

As overtime regulations vary from one country to the next, so do TOIL considerations.

TOIL in the USA

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.

TOIL in the UK

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.

TOIL in France

As in the UK, EU Working Regulations state that weekly hours shouldn’t exceed 48 without written exemption. Generally, French labor 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.

TOIL in Germany

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.

TOIL in India

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.

Potential challenges of implementing TOIL

While there are plentiful benefits to providing TOIL as a benefit, particularly for business travelers, there are some challenges to be aware of.

1. Misunderstanding or abuse

Business travelers 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.

2. Employee preferences

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.

3. Tracking and management time

Tracking extra hours and separating days in lieu from personal time can be complex without the right systems in place.

4. Legal compliance

As each country has its own employment regulations, it’s important to make sure that multinational companies are compliant with all region-dependent rules.

TOIL vs paid overtime: which is better?

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.

How to create a TOIL policy for your business

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:

  • An explanation of the time off in lieu meaning and how it works
  • The circumstances in which employees can request time off
  • How extra hours should be recorded and submitted
  • Any limits on how much TOIL an employee can claim
  • Cut-off dates for TOIL validity
  • Blocked periods when TOIL isn’t allowed

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.

Frequently asked questions about time off in lieu

What is the time off in lieu meaning?

The time in lieu meaning refers to a term used when employees receive extra time off for working extra hours, rather than overtime pay.

What is the lieu days meaning?

The lieu days meaning refers to the days taken off from work as compensation for overtime.

Can employees take overtime pay instead of lieu days?

This depends on the employer’s policy, but employees can usually take payment instead of lieu days.

What’s a TOIL policy?

A time off in lieu, or TOIL policy, outlines how and when TOIL applies.

What are the advantages of TOIL?

Time off in lieu saves money for the employer while encouraging productivity and a better work-life balance for employees.

Does TOIL apply to business travel?

Yes, business travelers can often accept days in lieu as compensation for overtime hours spent travelling for work.

Suggested articles

10/18/22
7 min read
The complete guide to bleisure travel

With this guide, you’ll learn what bleisure travel is, how it can benefit employees, and what to con...

Bleisure Bookers / Admins HR teams
10/30/24
13 min read
Guide to Incentive Travel: What Are the Benefits of Travel Incentives for Employees?

Find out about travel incentives for employees: how reward trips work, and why they can help boost p...

Work productivity Bleisure Small business owners HR teams
07/17/23
7 min read
12 tips for finding work-life balance as a business traveler

Check out these strategies to prioritize your health, protect your mental wellbeing, and find work-l...

Business travel tips Business travelers