Giving employees time off in lieu (TOIL), instead of overtime, when they work extra hours is an effective way to managing your company’s costs, as well as helping your employees to maintain a healthy work-life balance. Better yet, some employees actually prefer additional time-off to extra pay.

However, as useful and mutually beneficial as TOIL can be, managing it effectively can come with a variety of challenges. Let’s take a closer look, how to best manage it, and overcome its potential pitfalls.

Have a TOIL policy

One of the most common challenges that businesses face when it comes to TOIL is making sure everyone is on the same page. Your employees should know what they’re entitled to and what the limitations are.  This can be done by establishing a policy

Firstly, although many companies make good use of TOIL, there aren’t actually any statutory requirements for giving your employees time off in lieu – as there are with annual leave. Ultimately, it comes to down to an agreement between a business and its staff. Consequently, if you don’t have one already, you should create a written agreement related to TOIL in your employment contracts, as well as your absence policy. This way, management, HR, and every employee knows where they stand, and everyone has the same reference point in the event of a disagreement.

Your TOIL policy should include:

  • How you calculate TOIL: Is it simply one hour of overtime for an hour off? Or, do certain periods, such as weekends and public holidays, count for more?
  • If there’s a limit to how much TOIL employees can stack up. As well as what happens when they reach that limit (e.g., will they be paid overtime instead?)
  • If TOIL can only be taken at certain times of the year.
  • Who has to approve TOIL
  • If TOIL has an expiry date. I.e., if employees have to take their accumulated time off by a certain cut off point. This ties into how the recent changes to how many annual leave days employees are allowed to carry over.

Recording overtime and tracking annual leave allowances

The most important aspect of TOIL is accurately recording the overtime worked by your staff and converting them to TOIL. As well as having a system for recording them, you need to convert those accumulated hours into days off and then add them to each employees’ annual leave allowance.

However, this assumes that you’ve been accurately tracking and updating your staff’s annual leave allowances. If you don’t have a reliable system for tracking your employee’s existing holiday dates, then attempting to track TOIL on top of that is going to result in problems. For instance, employees might feel they didn’t get all of the time off they’re entitled to and feel short-changed, leading to a lack of trust in the company and a reluctance to work overtime in the future.

Overcoming other common issues:In addition to confusion over your company’s TOIL policy, which, as advised above, is largely solved by having it in writing, other common issues can crop up a result of TOIL:

Employees working too much overtime

All too often, working overtime can become the norm instead of when the business needs that extra productive push. When this happens, you need to examine why your staff are working so much overtime in the first place. Do you need additional staff? Are some employees not pulling their weight? Or, do staff purposely slack off at their convenience (if it suits them better to leave the office a little later, for instance) to purposely accumulate TOIL. Taking the time to look at the reasons staff are working overtime can uncover underlying issues within the business that need to be addressed.

A build-up of TOIL

The more overtime staff work, the more potential there is for them to accumulate a lot of annual leave. This can result in being understaffed if too many employees are off, leaving those that are left to work overtime and being awarded more time off in lieu – creating a vicious cycle.

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